<PAGE> 1
As Filed Pursuant to Rule 424(b)(2)
Registration No. 333-40311
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 21, 1997)
$100,000,000
NORTH FORK CAPITAL TRUST II
8.00% CAPITAL TRUST PASS-THROUGH
SECURITIES(R) (TRUPS(R))
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
NORTH FORK BANCORPORATION, INC.
------------------------
The Capital Trust Pass-through Securities(R) (the "Capital Securities")
offered hereby represent beneficial
ownership interests in North Fork Capital Trust II, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"). North Fork
Bancorporation, Inc., a Delaware corporation ("North Fork" or the
"Corporation"), will be the direct or indirect owner of all of the beneficial
ownership interests represented by common securities of the Trust (the "Common
Securities" and, collectively with the Capital Securities, the "Trust
Securities"). Bankers Trust Company is the Property Trustee of the Trust. The
Trust exists for the exclusive purposes of issuing the Trust Securities,
investing the proceeds thereof in 8.00% Junior Subordinated Debt Securities (the
"Junior Subordinated Debt Securities") to be issued by the Corporation and
certain other limited activities described herein. The Junior Subordinated Debt
Securities will mature on December 15, 2027 (the "Stated Maturity"). The Capital
Securities will have a preference under certain circumstances with respect to
cash distributions and amounts payable on liquidation, redemption or otherwise
over the Common Securities. See "Description of Capital
Securities -- Subordination of Common Securities."
(continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE S-10 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE CAPITAL SECURITIES, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE CAPITAL SECURITIES MAY BE
DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH
DEFERRAL.
------------------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
UNDERWRITING
DISCOUNTS PROCEEDS TO
PRICE TO AND THE
PUBLIC(1) COMMISSIONS(2) TRUST(3)(4)
- ------------------------------------------------------------------------------------------------
Per Capital Security 99.614% (3) 99.614%
- ------------------------------------------------------------------------------------------------
Total $99,614,000 (3) $99,614,000
================================================================================================
</TABLE>
(1) Plus accrued distributions, if any, from December 10, 1997.
(2) For information regarding indemnification of the Underwriters, see
"Underwriting."
(3) In view of the fact that the proceeds of the sale of the Capital
Securities will be invested in the Junior Subordinated Debt Securities,
the Corporation has agreed to pay to the Underwriters as compensation
for their arranging the investment therein of such proceeds $10.00 per
Capital Security (or $1,000,000 in the aggregate). See "Underwriting."
(4) Before deducting expenses payable by the Corporation estimated at
$280,000.
------------------------
The Capital Securities offered hereby are offered subject to receipt and
acceptance by the Underwriters, to prior sale and to the Underwriters' right to
reject any order in whole or in part and to withdraw, cancel or modify the offer
without notice. It is expected that delivery of the Capital Securities will be
made in book-entry form through the facilities of The Depository Trust Company
("DTC" or the "Depositary") on or about December 10, 1997, against payment
therefor in immediately available funds.
"Capital Trust Pass-through Securities" and "TRUPS" are registered service marks
of Salomon Brothers Inc.
------------------------
SALOMON SMITH BARNEY
KEEFE, BRUYETTE & WOODS, INC.
SANDLER O'NEILL & PARTNERS, L.P.
December 5, 1997
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CAPITAL
SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
(cover page continued)
Holders of the Capital Securities and the holder of the Common Securities
will be entitled to receive cumulative cash distributions, in each case arising
from the payment of interest on the Junior Subordinated Debt Securities accruing
from the date of original issuance and payable semi-annually in arrears on the
15th day of June and December of each year, commencing June 15, 1998, at the
annual rate of 8.00% of the Liquidation Amount of $1,000 per Capital Security
and at the annual rate of 8.00% of the Liquidation Amount of $1,000 per Common
Security ("Distributions"). Subject to certain exceptions, the Corporation has
the right to defer payments of interest on the Junior Subordinated Debt
Securities at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each deferral period (each, an
"Extension Period"); provided, however, that no Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated Debt Securities. Upon the
termination of any Extension Period and the payment of all interest then accrued
and unpaid (together with interest thereon at the rate of 8.00%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period, subject to the requirements set forth
herein. If interest payments on the Junior Subordinated Debt Securities are so
deferred, during any Extension Period, Distributions on the Capital Securities
and on the Common Securities will also be deferred and the Corporation will not
be permitted, subject to certain exceptions described herein, to declare or pay
any cash distributions with respect to the Corporation's capital stock (which
includes common and preferred stock) or to make any payment with respect to debt
securities of the Corporation that rank pari passu in all respects with or
junior to the Junior Subordinated Debt Securities. During an Extension Period,
interest on the Junior Subordinated Debt Securities will continue to accrue (and
the amount of Distributions to which holders of the Capital Securities are
entitled will accumulate) at the rate of 8.00% per annum, compounded
semi-annually, and holders of Capital Securities will be required to accrue
interest income for United States federal income tax purposes. See "Risk
Factors -- Option to Extend Interest Payment Date; Tax Consequences; Market
Price Consequences", "Description of Junior Subordinated Debt
Securities -- Option to Extend Interest Payment Date" and "Certain United States
Federal Income Tax Consequences -- Interest Income and Original Issue Discount."
The Corporation has, through the Guarantee Agreement, the Declaration, the
Junior Subordinated Debt Securities and the Indenture (each as defined herein),
taken together, fully, irrevocably and unconditionally guaranteed, as described
herein, all of the Trust's obligations under the Capital Securities. See
"Relationship Among the Capital Securities, the Junior Subordinated Debt
Securities and the Guarantee -- Full and Unconditional Guarantee." The
Corporation has agreed to guarantee the payment of Distributions and payments on
liquidation or redemption of the Capital Securities, but only in each case to
the extent of funds held by the Trust, as described herein (the "Guarantee").
See "Description of Guarantee." If the Corporation does not make interest
payments on the Junior Subordinated Debt Securities held by the Trust, the Trust
will have insufficient funds to pay Distributions on the Capital Securities. The
Guarantee does not cover the payment of Distributions when the Trust does not
have sufficient funds to pay such Distributions. In such event, a holder of
Capital Securities may institute a legal proceeding directly against the
Corporation for enforcement of payment to such holder of the principal of or
interest on Junior Subordinated Debt Securities having a principal amount equal
to the aggregate Liquidation Amount of the Capital Securities held by such
holder (a "Direct Action"). See "Description of Junior Subordinated Debt
Securities -- Enforcement of Certain Rights by Holders of Capital Securities."
The obligations of the Corporation under the Guarantee and the Junior
Subordinated Debt Securities are subordinate and junior in right of payment to
all Senior Debt (as defined in "Description of Junior Subordinated Debt
Securities -- Subordination") of the Corporation. In addition, because the
Corporation is a holding company, the Junior Subordinated Debt Securities and
the
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<PAGE> 3
Guarantee are effectively subordinated to all existing and future liabilities of
the Corporation's subsidiaries, including deposits.
The Trust Securities are subject to mandatory redemption (i) in whole, but
not in part, at the Stated Maturity of the Junior Subordinated Debt Securities
upon the redemption thereof at a redemption price equal to the principal amount
of, plus accrued interest on, the Junior Subordinated Debt Securities (the
"Maturity Redemption Price"), (ii) in whole, but not in part, at any time prior
to December 15, 2007, contemporaneously with the optional redemption of the
Junior Subordinated Debt Securities, upon the occurrence and continuation of a
Special Event (as defined herein) at a redemption price equal to the Special
Event Prepayment Price (as defined herein) (the "Special Event Redemption
Price"), and (iii) in whole or in part on or after December 15, 2007
contemporaneously with any optional redemption by the Corporation of Junior
Subordinated Debt Securities at a redemption price (the "Optional Redemption
Price") equal to the Optional Prepayment Price (as defined below). Any of the
Maturity Redemption Price, the Special Event Redemption Price or the Optional
Redemption Price may be referred to herein as the "Redemption Price." See
"Description of Capital Securities -- Mandatory Redemption." Subject to the
Corporation having received prior approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve") to do so if then required under
applicable capital guidelines or policies of the Federal Reserve, the Junior
Subordinated Debt Securities are redeemable prior to the Stated Maturity (i) at
the option of the Corporation on or after December 15, 2007, in whole or in part
at any time at a redemption price (the "Optional Prepayment Price") equal to
103.807% of the principal amount thereof on December 15, 2007 declining ratably
on each December 15 thereafter to 100% on or after December 15, 2017, plus
accrued and unpaid interest thereon to the date of redemption or (ii) at any
time prior to December 15, 2007, in whole but not in part, upon the occurrence
and continuation of a Special Event, at a redemption price (the "Special Event
Prepayment Price" equal to the greater of (a) 100% of the principal amount
thereof or (b) the sum, as determined by a Quotation Agent (as defined herein),
of the present values of the principal amount and premium payable as part of the
prepayment price with respect to an optional redemption of such Junior
Subordinated Debt Securities on December 15, 2007, together with scheduled
payments of interest accruing from the redemption date to December 15, 2007, in
each case, discounted to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
(as defined herein), plus, in each case, accrued but unpaid interest thereon to
the date of redemption. See "Description of Junior Subordinated Debt
Securities -- Optional Redemption" and "-- Special Event Prepayment."
The Corporation, as the holder of the outstanding Common Securities, has
the right at any time (including, without limitation, upon the occurrence of a
Tax Event (as defined herein)) to terminate the Trust and cause a Like Amount
(as defined herein) of the Junior Subordinated Debt Securities to be distributed
to the holders of the Trust Securities upon liquidation of the Trust, subject to
prior approval of the Federal Reserve to do so if then required under applicable
capital guidelines or policies of the Federal Reserve. In the event of such
termination of the Trust, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, the holders of the Capital Securities
generally will be entitled to receive a Liquidation Amount of $1,000 per Capital
Security plus accumulated and unpaid Distributions thereon to the date of
payment, which shall be in the form of a distribution of a Like Amount of Junior
Subordinated Debt Securities, subject to certain exceptions. See "Risk
Factors -- Liquidation Distribution of Junior Subordinated Debt Securities",
"Description of Capital Securities -- Liquidation of the Trust and Distribution
of Junior Subordinated Debt Securities."
As used herein, (i) the "Indenture" means the Junior Subordinated
Indenture, as amended and supplemented from time to time, between the
Corporation and Bankers Trust Company, as trustee (the "Debenture Trustee"), and
(ii) the "Declaration" means the Amended and Restated Declaration of Trust
relating to the Trust among the Corporation, as Depositor, Bankers Trust
Company, as Property Trustee (the "Property Trustee"), Bankers Trust (Delaware),
as Delaware Trustee (the "Delaware Trustee"), and the Administrative Trustees
named therein (collectively with the Property Trustee and the Delaware Trustee,
the "Issuer Trustees").
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NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"), NO ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN
THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY
PLAN, MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST THEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23,
95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT EITHER
(A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES
ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH
RESPECT TO SUCH PURCHASE OR HOLDING.
THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND CERTAIN OF THE
DOCUMENTS INCORPORATED BY REFERENCE HEREIN AND THEREIN CONTAIN CERTAIN FORWARD
LOOKING STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF
OPERATIONS AND BUSINESS OF NORTH FORK, INCLUDING STATEMENTS RELATING TO THE COST
SAVINGS AND REVENUE ENHANCEMENTS THAT ARE EXPECTED TO BE REALIZED FROM THE
BRANFORD MERGER AND THE NEW YORK BANCORP MERGER (EACH AS DEFINED HEREIN, AND
TOGETHER, THE "MERGERS"). FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE,
AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) EXPECTED COST SAVINGS OR REVENUE
ENHANCEMENTS FROM THE MERGERS CANNOT BE FULLY REALIZED; (2) DEPOSIT ATTRITION,
CUSTOMER LOSS OR REVENUE LOSS FOLLOWING THE MERGERS IS GREATER THAN EXPECTED;
(3) COMPETITIVE PRESSURE IN THE BANKING AND FINANCIAL SERVICES INDUSTRY
INCREASES SIGNIFICANTLY; (4) CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE
MARGINS; AND (5) GENERAL ECONOMIC CONDITIONS, EITHER NATIONALLY OR IN THE STATE
OF NEW YORK, ARE LESS FAVORABLE THAN EXPECTED.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
(a "Plan") subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Capital Securities. Accordingly, among other factors, the fiduciary
should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the documents
and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") prohibit Plans, as well as individual retirement
accounts and Keogh plans subject to Section 4975 of the Code (also "Plans"),
from engaging in certain transactions involving "plan assets" with persons who
are "parties in interest" under ERISA or "disqualified persons" under the Code
("Parties in Interest") with respect to such Plan. A violation of these
"prohibited transaction" rules may result in an excise tax or other liabilities
under ERISA and/or Section 4975 of the Code for such persons, unless exemptive
relief is available under an applicable statutory or administrative exemption.
Employee benefit plans that are governmental plans (as defined in Section 3(32)
of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and
foreign plans (as described in Section 4(b)(5) of ERISA) are not subject to the
requirements of ERISA or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Trust would be deemed to be
"plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code if
"plan assets" of the Plan were used to acquire an equity interest in the Trust
and no exception were applicable under the Plan Assets Regulation. An "equity
interest" is defined
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under the Plan Assets Regulation as any interest in an entity other than an
instrument which is treated as indebtedness under applicable local law and which
has no substantial equity features and specifically includes a beneficial
interest in a trust.
Pursuant to exceptions contained in the Plan Assets Regulation, the assets
of the Trust would not be deemed to be "plan assets" of investing Plans if
either (i) the Capital Securities were owned by 100 or more investors at the
time of the initial offering or (ii) immediately after the most recent
acquisition of any Capital Security, less than 25% of the value of the Capital
Securities were held by Plans, other employee benefit plans not subject to ERISA
or Section 4975 of the Code (such as governmental, church and foreign plans) and
entities holding assets deemed to be "plan assets" of any Plan (collectively
"Benefit Plan Investors"). The Underwriters do not believe that 100 or more
investors will own the Capital Securities at the time of the initial offering
and no assurance can be given by the Underwriters that at all times the value of
the Capital Securities held by Benefit Plan Investors will be less than 25% of
the total value of such Capital Securities, and no monitoring or other measures
will be taken with respect to the satisfaction of the conditions to this latter
exception.
Certain transactions involving the Trust could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a Plan if the Capital Securities were acquired with "plan
assets" of such Plan and assets of the Trust were deemed to be "plan assets" of
Plans investing in the Trust. For example, if the Corporation is a Party in
Interest with respect to an investing Plan (either directly or by reason of its
ownership of the Trust or of any of the Corporation's other subsidiaries),
extensions of credit between the Corporation and the Trust (as represented by
the Junior Subordinated Debt Securities and the Guarantee) would likely be
prohibited by Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the
Code, unless exemptive relief were available under an applicable administrative
exemption (see below).
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the Capital Securities, assuming that
assets of the Trust were deemed to be "plan assets" of Plans investing in the
Trust (see above). Those class exemptions are PTCE 96-23 (for certain
transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for
certain transactions involving bank collective investment funds), PTCE 90-1 (for
certain transactions involving insurance company pooled separate accounts) and
PTCE 84-14 (for certain transactions determined by independent qualified
professional asset managers).
Because the Capital Securities may be deemed to be equity interests in the
Trust for purposes of applying ERISA and Section 4975 of the Code, the Capital
Securities may not be purchased or held by any Plan, any entity whose underlying
assets include "plan assets" by reason of any Plan's investment in the entity (a
"Plan Asset Entity") or any person investing "plan assets" of any Plan, unless
such purchaser or holder is eligible for the exemptive relief available under
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Any purchaser or holder of the Capital
Securities or any interest therein will be deemed to have represented by its
purchase and holding thereof that it either (a) is not a Plan or a Plan Asset
Entity and is not purchasing such securities on behalf of or with "plan assets"
of any Plan or (b) is eligible for the exemptive relief available under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14 with respect to such purchase or holding.
Furthermore, because certain other prohibited transactions under ERISA and the
Code could result under certain circumstances if the Capital Securities are
deemed to be such equity interests, each investing Plan, by purchasing the
Capital Securities, will be deemed to have directed the Trust to invest in the
Junior Subordinated Debt Securities, to have appointed the Property Trustee and
to have approved all transactions that are authorized under the Declaration, the
Indenture and all other documents entered into in connection with the offering
of the Capital Securities.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing the Capital
Securities on behalf of or with "plan assets" of any Plan consult with their
counsel regarding the potential consequences if the assets of the Trust were
deemed to be "plan assets" and the availability of exemptive relief under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14.
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
NORTH FORK CAPITAL TRUST II
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on November 14, 1997. The Trust's business and
affairs are conducted by the Issuer Trustees: Bankers Trust Company, as Property
Trustee, Bankers Trust (Delaware), as Delaware Trustee, and two individual
Administrative Trustees who are employees or officers of or affiliated with the
Corporation. The Trust exists for the exclusive purposes of (i) issuing and
selling the Trust Securities, (ii) using the proceeds from the sale of the Trust
Securities to acquire the Junior Subordinated Debt Securities issued by the
Corporation and (iii) engaging in only those other activities necessary,
advisable or incidental thereto. The Junior Subordinated Debt Securities will be
the sole assets of the Trust, and payments under the Junior Subordinated Debt
Securities will be the sole revenues of the Trust. All of the Common Securities
will be owned directly or indirectly by the Corporation.
NORTH FORK
North Fork, with its executive headquarters located in Melville, New York,
is a bank holding company organized under the laws of the State of Delaware in
1980 and registered under the Bank Holding Company Act of 1956, as amended.
North Fork's primary subsidiary, North Fork Bank, operates 80 retail banking
facilities throughout Suffolk and Nassau Counties on Long Island, New York, as
well as in the New York City boroughs of Manhattan, Queens and the Bronx and in
Westchester and Rockland Counties north of New York City. North Fork's proposed
acquisition of Branford Savings Bank (see below) represents North Fork's initial
acquisition outside the State of New York.
At September 30, 1997, North Fork had assets of $6.6 billion, deposits of
$4.5 billion and stockholders' equity of $538 million. The principal executive
offices of North Fork are located at 275 Broad Hollow Road, Melville, New York
11747 and its telephone number is (516) 844-1004.
On October 7, 1997, North Fork entered into an agreement and plan of merger
with New York Bancorp Inc. ("New York Bancorp") pursuant to which New York
Bancorp will be merged (the "New York Bancorp Merger") with and into North Fork.
As of September 30, 1997, New York Bancorp had assets of approximately $3.2
billion, deposits of approximately $1.7 billion and stockholders' equity of
approximately $169 million. New York Bancorp serves customers from its primary
subsidiary, Home Federal, which operates 31 full service branch offices
throughout Kings, Queens, Nassau, Westchester and Suffolk Counties of New York.
Immediately after the New York Bancorp Merger, Home Federal will be merged with
and into North Fork Bank (the "Subsidiary Bank Merger"). In connection with the
New York Bancorp Merger, North Fork will issue 1.19 shares of North Fork common
stock for each share of New York Bancorp common stock. The New York Bancorp
Merger is expected to be consummated in the first quarter of 1998 and will be
accounted for under the pooling of interests accounting method.
On July 24, 1997, North Fork entered into an agreement and plan of merger
with Branford Savings Bank ("Branford"), a Connecticut-chartered savings bank,
pursuant to which Branford will be merged (the "Branford Merger") with and into
a newly formed wholly-owned subsidiary of North Fork. As of September 30, 1997,
Branford had $183 million in total assets, $162 million in deposits and $18
million in stockholders' equity. Branford serves customers from five branches in
the Connecticut towns of Branford, North Branford and East Haven and surrounding
communities in New Haven County, Connecticut. The Branford Merger represents
North Fork's initial acquisition outside the State of New York. In connection
with this transaction, North Fork will issue approximately 1,283,674 shares of
North Fork Common Stock. The Branford Merger is expected to be consummated prior
to December 31, 1997 and will be accounted for under the purchase method of
accounting.
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On December 31, 1996, North Fork completed a business combination with
North Side Savings Bank ("North Side") by merging North Side with and into North
Fork Bank. At closing, North Side had $1.6 billion in total assets, $1.2 billion
in deposits, $124.4 million in capital and operated 17 full service banking
locations in the New York City boroughs of the Bronx and Queens and Nassau and
Suffolk Counties.
In March, 1996, North Fork Bank completed its purchase of the domestic
commercial banking business of Extebank, which at closing had approximately $387
million in assets and $348 million in deposits, for $47 million in cash.
Additionally, during March 1996, North Fork Bank completed its acquisition of 10
Long Island branches of First Nationwide Bank, and assumed $572 million in
customer deposit liabilities, for which it paid a deposit premium of 6.35%.
In July, 1995, North Fork completed its purchase acquisition of Great Neck
Bancorp, the parent company of Bank of Great Neck, a Long Island based
commercial bank ("Great Neck"). Great Neck, with assets of $91 million,
including $49.4 million in net loans, and $90.3 million in deposits, was merged
into North Fork Bank.
In November, 1994, North Fork completed a business combination with Metro
Bancshares, Inc. ("Metro"), the parent company of Bayside Federal Savings Bank
("Bayside"), by merging Metro with and into North Fork. Simultaneously, Bayside
(with approximately $1.0 billion in assets, $.9 billion in deposits and $83.5
million in stockholders' equity, operating through 13 full-service banking
locations in the New York City borough of Queens and Nassau and Suffolk
Counties) was merged with and into North Fork Bank. The merger was accounted for
as a pooling of interests.
North Fork is a legal entity separate and distinct from its subsidiaries.
The ability of holders of debt and equity securities of North Fork to benefit
from the distribution of assets of any subsidiary upon the liquidation or
reorganization of such subsidiary is subordinate to prior claims of creditors of
the subsidiary (including depositors in the case of banking subsidiaries) except
to the extent that a claim of North Fork as a creditor may be recognized.
There are various statutory and regulatory limitations on the extent to
which present and future banking subsidiaries of North Fork can finance or
otherwise transfer funds to North Fork or its nonbanking subsidiaries, whether
in the form of loans, extensions of credit, investments or asset purchases.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to North Fork from its existing banking subsidiary. Under
applicable banking statutes, at September 30, 1997, North Fork's banking
subsidiary could have declared additional dividends of approximately $126.6
million. However, Federal and state regulatory agencies also have the authority
to limit further North Fork's banking subsidiary's payment of dividends based on
other factors, such as the maintenance of adequate capital for such subsidiary
bank, which could reduce the amount of dividends otherwise payable.
Under the policy of the Federal Reserve, North Fork is expected to act as a
source of financial strength to each subsidiary bank and to commit resources to
support such subsidiary bank in circumstances where North Fork might not do so
absent such policy. In addition, any subordinated loans by North Fork to any
subsidiary bank would also be subordinate in right of payment to deposits and
obligations to general creditors of such subsidiary bank.
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THE OFFERING
SECURITIES OFFERED............ $100,000,000 aggregate Liquidation Amount of
8.00% Capital Trust Pass-through Securities
(Liquidation Amount $1,000 per Capital
Security).
OFFERING PRICE................ $996.14 per Capital Security (Liquidation
Amount $1,000), plus accrued Distributions, if
any.
DISTRIBUTION DATES............ June 15 and December 15 of each year,
commencing June 15, 1998.
EXTENSION PERIODS............. Distributions on Capital Securities will be
deferred for the duration of any Extension
Period elected by the Corporation with respect
to the payment of interest on the Junior
Subordinated Debt Securities. No Extension
Period will exceed 10 consecutive semi-annual
periods or extend beyond the Stated Maturity of
the Junior Subordinated Debt Securities. See
"Risk Factors -- Option to Extend Interest
Payment Date; Tax Consequences; Market Price
Consequences", "Description of Junior
Subordinated Debt Securities --Option to Extend
Interest Payment Date" and "Certain United
States Federal Income Tax
Consequences -- Interest Income and Original
Issue Discount."
RANKING....................... The Capital Securities will rank pari passu,
and payments thereon will be made pro rata,
with the Common Securities except as described
under "Description of Capital
Securities -- Subordination of Common
Securities." The Junior Subordinated Debt
Securities will rank pari passu with all other
junior subordinated debt securities previously
issued and to be issued by the Corporation
pursuant to the Indenture with substantially
similar subordination terms ("Other
Debentures"), and which have been or will be
issued and sold to other trusts established by
the Corporation, in each case similar to the
Trust ("Other Trusts"), and will be unsecured
and subordinate and junior in right of payment
to the extent and in the manner set forth in
the Indenture to all Senior Debt. See
"Description of Junior Subordinated Debt
Securities." The Guarantee will rank pari passu
with all other guarantees previously issued and
to be issued by the Corporation with respect to
capital securities previously issued and to be
issued by Other Trusts ("Other Guarantees") and
will constitute an unsecured obligation of the
Corporation and will rank subordinate and
junior in right of payment to the extent and in
the manner set forth in the Guarantee to all
Senior Debt. See "Description of Guarantee." In
addition, because the Corporation is a holding
company, the Junior Subordinated Debt
Securities and the Guarantee are effectively
subordinated to all existing and future
liabilities of the Corporation's subsidiaries,
including deposits.
REDEMPTION.................... The Trust Securities are subject to mandatory
redemption (i) in whole, but not in part, at
the Stated Maturity of the Junior Subordinated
Debt Securities upon the redemption thereof,
(ii) in whole, but not in part, at any time
prior to December 15, 2007, contemporaneously
with the optional redemption of the Junior
Subordinated Debt Securities upon the
occurrence and
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continuation of a Special Event (as defined
herein) and (iii) in whole or in part at any
time on or after December 15, 2007
contemporaneously with any optional redemption
by the Corporation of Junior Subordinated Debt
Securities, in each case at the applicable
Redemption Price. See "Description of Capital
Securities -- Mandatory Redemption."
RATING........................ The Capital Securities are expected to be rated
"BB+" by Standard & Poor's Ratings Services and
"baa3" by Moody's Investors Service, Inc. A
security rating is not a recommendation to buy,
sell or hold securities and may be subject to
revision or withdrawal at any time by the
assigning rating organization.
ERISA CONSIDERATIONS.......... Prospective purchasers must carefully consider
the restrictions on purchase set forth under
"Certain ERISA Considerations."
ABSENCE OF MARKET FOR THE
CAPITAL SECURITIES............ The Capital Securities will be a new issue of
securities for which there is currently no
market. Although the Underwriters have informed
the Trust and the Corporation that they
currently intend to make a market in the
Capital Securities, the Underwriters are not
obligated to do so, and any such market making
may be discontinued at any time without notice.
Accordingly, there can be no assurance as to
the development or liquidity of any market for
the Capital Securities. The Trust and the
Corporation do not intend to apply for listing
of the Capital Securities on a securities
exchange or for quotation through the National
Association of Securities Dealers Automated
Quotation ("NASDAQ") System. See
"Underwriting."
USE OF PROCEEDS............... All of the proceeds from the sale of the Trust
Securities will be invested by the Trust in the
Junior Subordinated Debt Securities. The
Corporation intends to apply the net proceeds
from the sale of the Junior Subordinated Debt
Securities to its general funds to be used for
general corporate purposes.
For additional information regarding the
Capital Securities, see "Description of Capital
Securities," "Description of Junior
Subordinated Debt Securities," "Description of
Guarantee" and "Certain United States Federal
Income Tax Consequences."
RISK FACTORS
Prospective investors should carefully consider the matters set forth under
"Risk Factors."
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RISK FACTORS
Prospective purchasers of the Capital Securities should carefully review
the information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR SUBORDINATED DEBT
SECURITIES
The obligations of the Corporation under the Guarantee issued by the
Corporation for the benefit of the holders of Capital Securities and under the
Junior Subordinated Debt Securities are unsecured and rank subordinate and
junior in right of payment to all Senior Debt (which, as defined, includes all
outstanding subordinated debt of the Corporation). At September 30, 1997, the
aggregate outstanding Senior Debt was approximately $25 million. Upon the
issuance of the Junior Subordinated Debt Securities, the Corporation will not
have any indebtedness that ranks junior to its obligations under the Guarantee
and the Junior Subordinated Debt Securities. The Corporation has outstanding
$103.1 million of junior subordinated debt securities due 2026 with terms
similar to the Junior Subordinated Debt Securities, which are pari passu in
right of payment to the Junior Subordinated Debt Securities. Such debentures
were issued to North Fork Capital Trust I in connection with its issuance of
capital securities in December 1996. Because the Corporation is a bank holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary, including North Fork Bank, upon such subsidiary's
liquidation or reorganization or otherwise (and thus the ability of holders of
the Capital Securities to benefit indirectly from such distribution), is subject
to the prior claims of creditors of such subsidiary, except to the extent that
the Corporation may itself be recognized as a creditor of such subsidiary.
Accordingly, the Junior Subordinated Debt Securities will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Junior Subordinated Debt Securities should look
only to the assets of the Corporation for payments on the Junior Subordinated
Debt Securities. Because the Corporation is a holding company with limited
assets and liabilities, a substantial portion of the consolidated liabilities of
the Corporation are liabilities of its subsidiaries. See "North Fork." The
Guarantee will constitute an unsecured obligation of the Corporation and will
rank subordinate and junior in right of payment to all Senior Debt in the same
manner as the Junior Subordinated Debt Securities. None of the Indenture, the
Guarantee or the Declaration places any limitation on the amount of secured or
unsecured debt, including Senior Debt, that may be incurred by the Corporation
or any subsidiary. See "Description of Junior Subordinated Debt
Securities -- Subordination" and "Description of Guarantee -- Status of the
Guarantee."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior Subordinated
Debt Securities as and when required.
OPTION TO EXTEND INTEREST PAYMENT DATE; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES
So long as no Debenture Event of Default (as defined herein) has occurred
and is continuing, the Corporation has the right under the Indenture to defer
the payment of interest on the Junior Subordinated Debt Securities at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period; provided, however, that no
Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. As a consequence of any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will also be deferred (and
the amount of Distributions to which holders of the Capital Securities are
entitled will accumulate additional Distributions thereon at the rate of 8.00%
per annum, compounded semi-annually) from the relevant payment date for such
Distributions during any such Extension Period. During any Extension Period, the
Corporation may not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Corporation's capital stock (which includes common and preferred stock),
(ii) make any payment of principal, interest or premium, if any, on, or repay,
repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu with or junior in interest to, the Junior
Subordinated Debt Securities or (iii) make any guarantee payments with respect
to any guarantee by the Corporation of the debt securities of any
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<PAGE> 11
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu with or junior in interest to the Junior Subordinated Debt
Securities (other than (a) dividends or distributions in common stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of the Corporation's common stock in connection with the
satisfaction by the Corporation of its obligations under any employee benefit
plan or any other contractual obligation of the Corporation (other than a
contractual obligation ranking pari passu with or junior to the Junior
Subordinated Debt Securities), (e) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or series
of the Corporation's capital stock for another class or series of the
Corporation's capital stock or (f) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
Prior to the termination of any Extension Period, the Corporation may further
extend such Extension Period; provided, however, that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity. Upon the termination of any Extension Period
and the payment of all interest then accrued and unpaid on the Junior
Subordinated Debt Securities (together with interest thereon at the annual rate
of 8.00%, compounded semi-annually, to the extent permitted by applicable law),
the Corporation may elect to begin a new Extension Period, subject to the above
requirements. There is no limitation on the number of times that the Corporation
may elect to begin an Extension Period. See "Description of Capital
Securities -- Distributions" and "Description of Junior Subordinated Debt
Securities -- Option to Extend Interest Payment Date."
Because the Corporation believes that the likelihood of its exercising its
option to defer payments of interest is remote, the Junior Subordinated Debt
Securities will be treated under Treasury regulations as issued without
"original issue discount" ("OID") for United States federal income tax purposes.
As a result, holders of Capital Securities generally will include their
allocable share of the interest on the Junior Subordinated Debt Securities in
taxable income under their own methods of tax accounting (i.e., cash or
accrual). Under the Treasury regulations, however, if the Corporation exercises
its right to defer payments of interest, the Junior Subordinated Debt Securities
will become OID instruments. Consequently, holders of Capital Securities will be
required to include their pro rata share of OID in gross income as it accrues
for United States federal income tax purposes in advance of the receipt of cash
attributable to such interest income and such holders will not receive the cash
related to such income if they dispose of the Capital Securities prior to the
record date for payment of distributions thereafter. See "Certain United States
Federal Income Tax Consequences -- Interest Income and Original Issue Discount"
and "-- Sales of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debt Securities in the future, the market
price of the Capital Securities is likely to be affected. A holder that disposes
of its Capital Securities during an Extension Period, therefore, might not
receive the same return on its investment as a holder that continues to hold its
Capital Securities. In addition, as a result of the existence of the
Corporation's right to defer interest payments on the Junior Subordinated Debt
Securities, the market price of the Capital Securities (which represent
beneficial ownership interests in the Trust holding the Junior Subordinated Debt
Securities as its sole assets) may be more volatile than the market prices of
other securities that are not subject to such deferrals.
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event, the Corporation
may, at its option and subject to receipt of prior approval of the Federal
Reserve if such approval is then required under applicable law, rules,
guidelines or policies, redeem the Junior Subordinated Debt Securities in whole,
but not in part, at the Special Event Prepayment Price (as defined herein). In
such event, the Trust will redeem the Trust Securities on a pro rata basis to
the same extent as the Junior Subordinated Debt Securities are redeemed by the
Corporation. See "Description of Junior Subordinated Debt Securities --
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<PAGE> 12
Special Event Prepayment", "Description of Capital Securities -- Mandatory
Redemption" and "Description of Capital Securities -- Liquidation of the Trust
and Distribution of Junior Subordinated Debt Securities."
A "Special Event" means a Tax Event or a Regulatory Capital Event, as the
case may be.
A "Tax Event" means the receipt by the Corporation of an opinion of
independent counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced proposed change) in, the
laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
Issue Date, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debt Securities, (ii) interest payable by the Corporation on the
Junior Subordinated Debt Securities is not, or within 90 days of the date of
such opinion, will not be, deductible by the Corporation, in whole or in part,
for United States federal income tax purposes, or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation shall have received
an opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any rules, guidelines or policies of the Federal Reserve or (b)
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of original
issuance of the Capital Securities, the Capital Securities do not constitute, or
within 90 days of the date thereof, will not constitute, Tier 1 capital (as
defined herein) (or its then equivalent); provided, however, that the
distribution of the Junior Subordinated Debt Securities in connection with the
liquidation of the Trust by the Corporation and the treatment thereafter of the
Junior Subordinated Debt Securities as other than Tier 1 capital shall not in
and of itself constitute a Regulatory Capital Event unless such liquidation
shall have occurred in connection with a Tax Event.
LIQUIDATION DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Corporation has the right at any time to distribute the Junior
Subordinated Debt Securities to holders of the Trust Securities. Under current
United States federal income tax law, a distribution of Junior Subordinated Debt
Securities upon the dissolution of the Trust would not be a taxable event to
holders of the Capital Securities. If, however, the Trust is characterized for
United States federal income tax purposes as an association taxable as a
corporation at the time of dissolution of the Trust, the distribution of the
Junior Subordinated Debt Securities may constitute a taxable event to holders of
Capital Securities. Moreover, upon occurrence of a Special Event, a dissolution
of the Trust in which holders of the Capital Securities receive cash would be a
taxable event to such holders. See "Certain United States Federal Income Tax
Consequences -- Receipt of Junior Subordinated Debt Securities or Cash Upon
Liquidation of the Trust."
There can be no assurance as to the market prices for Capital Securities or
Junior Subordinated Debt Securities that may be distributed in exchange for
Capital Securities if a liquidation of the Trust occurs. Accordingly, the
Capital Securities or the Junior Subordinated Debt Securities may trade at a
discount to the price that the investor paid to purchase the Capital Securities
offered hereby. Because holders of Capital Securities may receive Junior
Subordinated Debt Securities on termination of the Trust, prospective purchasers
of Capital Securities are also making an investment decision with regard to the
Junior Subordinated Debt Securities and should carefully review all the
information regarding the Junior Subordinated Debt Securities contained herein.
See "Description of Capital Securities -- Liquidation of
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the Trust and Distribution of Junior Subordinated Debt Securities" and
"Description of Junior Subordinated Debt Securities -- General."
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE CAPITAL SECURITIES
If an Event of Default (as defined herein) occurs and is continuing, then
the holders of Capital Securities would rely on the enforcement by the Property
Trustee of its rights as a holder of the Junior Subordinated Debt Securities
against the Corporation. In addition, the holders of a majority in liquidation
amount of the Capital Securities will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Property
Trustee or to direct the exercise of any trust or power conferred upon the
Property Trustee under the Declaration, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of the
Junior Subordinated Debt Securities. If the Property Trustee fails to enforce
its rights with respect to the Junior Subordinated Debt Securities held by the
Trust, any record holder of Capital Securities may institute legal proceedings
directly against the Corporation to enforce the Property Trustee's rights under
such Junior Subordinated Debt Securities without first instituting any legal
proceedings against such Property Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Corporation to
pay interest or principal on the Junior Subordinated Debt Securities issued to
the Trust on the date such interest or principal is otherwise payable, then a
record holder of Capital Securities may institute a proceeding directly against
the Corporation for enforcement of payment to the record holder of the Capital
Securities of the principal of or interest on the Junior Subordinated Debt
Securities on or after the respective due dates specified in the Junior
Subordinated Debt Securities, and the amount of the payment will be based on the
holder's pro rata share of the amount due and owing on all of the Capital
Securities. The record holder in the case of the issuance of one or more global
Capital Securities certificates will be DTC acting at the direction of the
beneficial owners of the Capital Securities. The holders of the Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Junior Subordinated Debt Securities unless the Property
Trustee fails to do so. The Corporation's election to exercise its right to
extend the interest payment period on the Junior Subordinated Debt Securities
shall not constitute an Event of Default. See "Description of Capital
Securities -- Events of Default; Notice" and "Description of Junior Subordinated
Debt Securities -- Debenture Events of Default".
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by the Trust: (i) any accumulated and
unpaid Distributions required to be paid on the Capital Securities, to the
extent that the Trust has funds on hand available therefor at such time, (ii)
the applicable Redemption Price with respect to any Capital Securities called
for redemption, to the extent that the Trust has funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary dissolution,
winding-up or liquidation of the Trust (unless the Junior Subordinated Debt
Securities are distributed to holders of the Capital Securities), the lesser of
(a) the aggregate of the Liquidation Amount and all accumulated and unpaid
Distributions to the date of payment, to the extent that the Trust has funds on
hand available therefor at such time, and (b) the amount of assets of the Trust
remaining available for distribution to holders of the Capital Securities after
the satisfaction of liabilities to creditors of the Trust as provided by
applicable law.
The holders of not less than a majority in aggregate Liquidation Amount of
the Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee (as
defined herein) in respect of the Guarantee or to direct the exercise of any
trust power conferred upon the Guarantee Trustee under the Guarantee. Any holder
of the Capital Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Guarantee without first instituting
a legal proceeding against the Trust, the Guarantee Trustee or any other person
or entity. If the Corporation were to default on its obligation to pay amounts
payable under the Junior Subordinated Debt Securities, the Trust would lack
funds for the payment of
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Distributions or amounts payable on redemption of the Capital Securities or
otherwise, and, in such event, holders of the Capital Securities would not be
able to rely upon the Guarantee for payment of such amounts. Instead, in the
event a Debenture Event of Default shall have occurred and be continuing and
such event is attributable to the failure of the Corporation to pay principal of
or interest on the Junior Subordinated Debt Securities on the applicable payment
date, then a holder of Capital Securities may institute a Direct Action.
Notwithstanding any payments made to a holder of Capital Securities by the
Corporation in connection with a Direct Action, the Corporation shall remain
obligated to pay the principal of and interest on the Junior Subordinated Debt
Securities, and the Corporation shall be subrogated to the rights of the holder
of such Capital Securities with respect to payments on the Capital Securities to
the extent of any payments made by the Corporation to such holder in any Direct
Action. Except as described herein, holders of Capital Securities will not be
able to exercise directly any other remedy available to the holders of the
Junior Subordinated Debt Securities or assert directly any other rights in
respect of the Junior Subordinated Debt Securities. See "Description of Junior
Subordinated Debt Securities -- Enforcement of Certain Rights by Holders of
Capital Securities," "Description of Junior Subordinated Debt
Securities -- Debenture Events of Default" and "Description of Guarantee." The
Declaration provides that each holder of Capital Securities by acceptance
thereof agrees to the provisions of the Guarantee and the Indenture. Bankers
Trust Company will act as Guarantee Trustee under the Guarantee Agreement and
will hold the Guarantee for the benefit of the holders of the Capital
Securities. Bankers Trust Company will also act as Property Trustee under the
Declaration and as Debenture Trustee under the Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities will generally have limited voting rights
relating only to the modification of the Capital Securities, the dissolution,
winding-up or liquidation of the Trust, and the exercise of the Trust's rights
as holder of Junior Subordinated Debt Securities. The right to vote to appoint,
remove or replace the Property Trustee or the Delaware Trustee is vested
exclusively in the holder of the Common Securities except upon the occurrence of
certain events described herein. The Property Trustee, the Administrative
Trustees and the Corporation may amend the Declaration without the consent of
holders of Capital Securities to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust, even if such
action adversely affects the interests of such holders. See "Description of
Capital Securities -- Removal of Issuer Trustees" and " -- Voting Rights;
Amendment of the Declaration."
ABSENCE OF PUBLIC MARKET
The Capital Securities will not be listed on any national securities
exchange. There is no existing market for the Capital Securities and there can
be no assurance as to the liquidity of any markets that may develop for the
Capital Securities, the ability of the holders to sell their Capital Securities
or, at what price holders of the Capital Securities will be able to sell their
Capital Securities. Future trading prices of the Capital Securities will depend
on many factors including, among other things, prevailing interest rates, the
Corporation's operating results and the market for similar securities. The
Underwriters have informed the Trust and the Corporation that they intend to
make a market in the Capital Securities offered hereby; however, the
Underwriters are not obligated to do so and any such market making activity may
be terminated at any time without notice to the holders of the Capital
Securities.
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USE OF PROCEEDS
All of the proceeds from the sale of the Trust Securities will be invested
by the Trust in the Junior Subordinated Debt Securities. The Corporation intends
to apply the net proceeds from the sale of the Junior Subordinated Debt
Securities to its general funds to be used by its management for general
corporate purposes, including, from time to time, the redemption or the
purchase, in the open market or in privately negotiated transactions, of
outstanding indebtedness of the Corporation, and the making of advances to its
subsidiaries, principally North Fork Bank. A portion of such proceeds could be
used in connection with one or more future acquisitions. From time to time, the
Corporation investigates and holds discussions and negotiations in connection
with possible transactions with other banks. As of the date of this Prospectus
Supplement, North Fork has not entered into any agreements or understandings
with respect to any significant transactions of the type referred to above
except for the transactions described herein and in documents incorporated
herein by reference. Pending such application by the Corporation, such net
proceeds may be invested in short-term interest-bearing securities, invested in
equity securities, or used to reduce short-term borrowings.
NORTH FORK CAPITAL TRUST II
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the original declaration of trust executed by the Corporation, as
Depositor, Bankers Trust (Delaware), as Delaware Trustee, and the Administrative
Trustees named therein, which original declaration of trust will be amended and
restated and executed by the Corporation, as Depositor, Bankers Trust Company,
as Property Trustee, Bankers Trust (Delaware), as Delaware Trustee, and the
Administrative Trustees named therein, and (ii) the filing of a certificate of
trust with the Delaware Secretary of State on November 14, 1997. The Trust
exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debt Securities and (iii) engaging in only those
other activities necessary, advisable or incidental thereto. Accordingly, the
Junior Subordinated Debt Securities will be the sole assets of the Trust, and
payments under the Junior Subordinated Debt Securities will be the sole revenues
of the Trust. All of the Common Securities will be owned directly or indirectly
by the Corporation. The Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Capital Securities, except that upon the
occurrence and continuance of an Event of Default under the Declaration
resulting from a Debenture Event of Default, the rights of the Corporation as
holder of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption or otherwise will be subordinated to the
rights of the holders of the Capital Securities. See "Description of Capital
Securities -- Subordination of Common Securities." The Corporation will acquire
Common Securities in an aggregate Liquidation Amount equal to 3% of the total
capital of the Trust. The Trust has a term of 40 years, but may terminate
earlier as provided in the Declaration. The Trust's business and affairs are
conducted by its trustees, each appointed by the Corporation as holder of the
Common Securities. The trustees for the Trust will be Bankers Trust Company, as
the Property Trustee, Bankers Trust (Delaware), as the Delaware Trustee, and two
individual trustees as Administrative Trustees who are employees or officers of
or affiliated with the Corporation. Bankers Trust Company, as Property Trustee,
will act as sole indenture trustee under the Declaration. Bankers Trust Company
will also act as trustee under the Guarantee Agreement and the Indenture. See
"Description of Junior Subordinated Debt Securities" and "Description of
Guarantee." The holder of the Common Securities of the Trust, or the holders of
a majority in Liquidation Amount of the Capital Securities if an Event of
Default under the Declaration resulting from a Debenture Event of Default has
occurred and is continuing, will be entitled to appoint, remove or replace the
Property Trustee and/or Delaware Trustee. In no event will the holders of the
Capital Securities have the right to vote to appoint, remove or replace the
Administrative Trustees; such voting rights are vested exclusively in the holder
of the Common Securities. The duties and obligations of each Issuer Trustee are
governed by the Declaration. Pursuant to the expense provisions under the
Indenture, the Corporation, as obligor on the Junior Subordinated Debt
Securities, will pay all fees and expenses related to the Trust and the offering
of the Capital Securities and will pay, directly or indirectly,
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all ongoing costs, expenses and liabilities of the Trust. See "Description of
Capital Securities -- Expenses and Taxes." The principal executive office of the
Trust is c/o
North Fork Bancorporation, Inc.
275 Broad Hollow Road
Melville, New York 11747
Telephone: (516) 844-1004
Attention: Anthony Abate, Secretary
NORTH FORK
North Fork, with its executive headquarters located in Melville, New York,
is a bank holding company organized under the laws of the State of Delaware in
1980 and registered under the Bank Holding Company Act of 1956, as amended.
North Fork's primary subsidiary, North Fork Bank, operates 80 retail banking
facilities throughout Suffolk and Nassau Counties on Long Island, New York, as
well as in the New York City boroughs of Manhattan, Queens and the Bronx and in
Westchester and Rockland Counties north of New York City. North Fork's proposed
acquisition of Branford Savings Bank (see below) represents North Fork's initial
acquisition outside the State of New York.
At September 30, 1997, North Fork had assets of $6.6 billion, deposits of
$4.5 billion and stockholders' equity of $538 million. The principal executive
offices of North Fork are located at 275 Broad Hollow Road, Melville, New York
11747 and its telephone number is (516) 844-1004.
On October 7, 1997, North Fork entered into an agreement and plan of merger
with New York Bancorp Inc. pursuant to which New York Bancorp will be merged
with and into North Fork. As of September 30, 1997, New York Bancorp had assets
of approximately $3.2 billion, deposits of approximately $1.7 billion and
stockholders' equity of approximately $169 million. New York Bancorp serves
customers from its primary subsidiary, Home Federal, which operates 31 full
service branch offices throughout Kings, Queens, Nassau, Westchester and Suffolk
Counties of New York. Immediately after the New York Bancorp Merger, Home
Federal will be merged with and into North Fork Bank. In connection with the New
York Bancorp Merger, North Fork will issue 1.19 shares of North Fork common
stock for each share of New York Bancorp common stock. The New York Bancorp
Merger is expected to be consummated in the first quarter of 1998 and will be
accounted for under the pooling of interests accounting method.
On July 24, 1997, North Fork entered into an agreement and plan of merger
with Branford Savings Bank, a Connecticut-chartered savings bank, pursuant to
which Branford will be merged with and into a newly formed wholly-owned
subsidiary of North Fork. As of September 30, 1997, Branford had $183 million in
total assets, $162 million in deposits and $18 million in stockholders' equity.
Branford serves customers from five branches in the Connecticut towns of
Branford, North Branford and East Haven and surrounding communities in New Haven
County, Connecticut. The Branford Merger represents North Fork's initial
acquisition outside the State of New York. In connection with this transaction,
North Fork will issue approximately 1,283,674 shares of North Fork Common Stock.
The Branford Merger is expected to be consummated prior to December 31, 1997 and
will be accounted for under the purchase method of accounting.
On December 31, 1996, North Fork completed a business combination with
North Side by merging North Side with and into North Fork Bank. At closing,
North Side had $1.6 billion in total assets, $1.2 billion in deposits, $124.4
million in capital and operated 17 full service banking locations in the New
York City boroughs of the Bronx and Queens and Nassau and Suffolk Counties.
In March, 1996, North Fork Bank completed its purchase of the domestic
commercial banking business of Extebank, which at closing had approximately $387
million in assets and $348 million in deposits, for $47 million in cash.
Additionally, during March 1996, North Fork Bank completed its acquisition of 10
Long Island branches of First Nationwide Bank, and assumed $572 million in
customer deposit liabilities, for which it paid a deposit premium of 6.35%.
S-16
<PAGE> 17
In July, 1995, North Fork completed its purchase acquisition of Great Neck.
Great Neck, with assets of $91 million, including $49.4 million in net loans,
and $90.3 million in deposits, was merged into North Fork Bank.
In November, 1994, North Fork completed a business combination with Metro
by merging Metro with and into North Fork. Simultaneously, Bayside, a subsidiary
of Metro, (with approximately $1.0 billion in assets, $.9 billion in deposits
and $83.5 million in stockholders' equity, operating through 13 full-service
banking locations in the New York City borough of Queens and Nassau and Suffolk
Counties) was merged with and into North Fork Bank. The merger was accounted for
as a pooling of interests.
North Fork, through North Fork Bank, provides a variety of banking and
financial services to middle market and small business organizations, local
governmental units, and retail customers in the metropolitan New York area.
From time to time, North Fork investigates and holds discussions and
negotiations in connection with possible transactions with other banks. As of
the date of this Prospectus Supplement, North Fork has not entered into any
agreements or understandings with respect to any significant transactions of the
type referred to above except for the transactions described herein and in
documents incorporated herein by reference. See "AVAILABLE INFORMATION" and
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" in the accompanying
Prospectus. Any such transaction would be subject to stockholder approval only
if required under applicable law or the rules of the NYSE.
For more information about North Fork, reference is made to the 1996 North
Fork Form 10-K which is incorporated herein by reference. See "AVAILABLE
INFORMATION" and "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" in the
accompanying Prospectus.
S-17
<PAGE> 18
SELECTED HISTORICAL FINANCIAL INFORMATION
The following tables set forth selected historical consolidated financial
information (unaudited) for North Fork for the five years ended December 31,
1996 and the nine month periods ended September 30, 1997 and 1996, and for New
York Bancorp for the five years ended September 30, 1996 and the nine month
periods ended September 30, 1997 and 1996. The financial information for New
York Bancorp for the nine month periods ended September 30, 1997 and 1996 has
been presented to coincide with the reporting period for North Fork. Following
the New York Bancorp Merger, the combined company's fiscal year, like that of
North Fork, will end on December 31. The tables have been derived from, and
should be read in conjunction with, the historical financial statements of North
Fork and New York Bancorp, including the related notes thereto incorporated by
reference in the accompanying Prospectus. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" in the accompanying Prospectus. Certain New York Bancorp
financial information has been reclassified to conform with North Fork. The
financial information for the nine month periods ended September 30, 1997 and
1996 for North Fork and New York Bancorp reflect, in the opinions of the
management of North Fork and New York Bancorp, all adjustments necessary for a
fair presentation of such information. Results for these interim periods are not
necessarily indicative of the results which may be expected for the full year or
any other interim period.
NORTH FORK BANCORPORATION, INC.
SELECTED HISTORICAL FINANCIAL INFORMATION(1)(2)
(UNAUDITED)
(in thousands, except ratios and per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY STATEMENTS OF INCOME:
Interest Income...................... $ 359,458 $ 300,093 $ 405,307 $ 332,492 $ 295,062 $ 289,045 $ 329,654
Interest expense..................... 151,977 130,677 174,361 140,399 112,576 117,153 175,937
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income.................. 207,481 169,416 230,946 192,093 182,486 171,892 153,717
---------- ---------- ---------- ---------- ---------- ---------- ----------
Provision for loan losses............ 4,500 5,100 6,800 11,825 6,825 26,608 34,612
Non-interest income.................. 26,032 21,877 29,245 23,010 21,674 21,868 20,161
Net securities gains/ (losses)....... 2,273 2,968 1,878 6,734 (9,189) 1,321 10,111
Other real estate expense............ 163 876 753 1,255 4,929 25,246 17,696
Merger related restructure charges... -- -- 21,613 -- 14,338 -- 1,200
SAIF recapitalization charge......... -- 8,350 8,350 -- -- -- --
Other non-interest expense........... 91,174 81,965 112,281 91,565 99,338 117,316 101,605
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes........... 139,949 97,970 112,272 117,192 69,541 25,911 28,876
Provision for income taxes........... 54,670 39,617 49,830 49,850 26,502 13,015 14,378
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income........................... $ 85,279 $ 58,353 $ 62,442 $ 67,342 $ 43,039 $ 12,896 $ 14,498
---------- ---------- ---------- ---------- ---------- ---------- ----------
Weighted average common shares
outstanding(3)..................... 66,215 64,757 64,278 64,432 62,312 61,126 53,976
Common shares outstanding at period
end(3)............................. 65,987 62,642 64,892 64,617 60,932 59,584 54,947
CONSOLIDATED PER SHARE DATA:(3)
Net Income(4)........................ $ 1.29 $ .90 $ .97 $ 1.05 $ 0.69 $ .21 $ .27
Cash dividends declared(5)........... .43 .30 .43 .28 .18 -- --
Stated book value at period-end...... 8.16 6.88 7.05 6.59 5.84 5.27 5.15
Tangible book value at period-end.... 7.00 5.53 5.79 6.16 5.48 4.83 4.46
Dividend payout ratio(5)............. 33% 33% 36% 26% 25% -- --
</TABLE>
S-18
<PAGE> 19
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA AT PERIOD END:
Securities:
Available-for-sale(6).............. $1,633,737 $1,396,685 $ 857,391 $1,150,510 $ 141,805 $ 200,219 $ 338,841
Held-to-maturity(6)................ 1,166,329 1,028,647 1,300,115 1,084,829 1,624,430 1,582,052 1,115,394
Loans, net of unearned income &
fees............................... 3,509,722 2,970,408 3,171,525 2,400,282 2,303,920 2,128,808 2,419,107
Allowance for loan losses............ 54,611 54,698 53,894 56,627 61,247 67,670 84,595
Intangible assets.................... 76,692 84,537 82,073 27,893 22,208 26,239 38,026
Total assets......................... 6,615,620 5,709,877 5,750,527 4,890,866 4,258,827 4,268,034 4,178,229
Deposits............................. 4,458,649 4,450,769 4,469,510 3,739,720 3,538,768 3,633,619 3,736,054
Federal funds purchased & securities
sold under agreements to
repurchase......................... 1,331,024 734,167 621,789 642,369 246,875 255,643 50,476
Other borrowings..................... 85,000 35,000 35,000 35,000 75,000 33,000 53,000
Company-obligated mandatorily
redeemable capital securities of
subsidiary trust................... 99,646 -- 99,637 -- -- -- --
Stockholders' equity................. 538,281 430,910 457,531 426,129 355,921 314,263 282,886
CONSOLIDATED AVERAGE BALANCE SHEET DATA:
Securities(6)........................ $2,648,635 $2,430,065 $2,386,493 $1,874,624 $1,832,327 $1,675,583 $1,242,146
Loans, net of unearned income &
fees............................... 3,353,105 2,683,148 2,778,663 2,358,636 2,313,419 2,288,712 2,581,547
Total assets......................... 6,346,543 5,482,488 5,518,016 4,470,920 4,417,627 4,315,839 4,360,516
Deposits............................. 4,476,393 4,330,108 4,373,570 3,634,149 3,600,686 3,671,336 3,897,054
Federal funds purchased & securities
sold under agreements to
repurchase......................... 1,125,692 617,346 610,960 350,393 378,198 220,120 82,791
Other borrowings..................... 47,637 40,255 38,934 36,397 49,044 36,559 55,190
Stockholders' equity................. 489,008 426,286 431,376 389,095 338,826 304,108 267,239
</TABLE>
- ---------------
(1) On December 31, 1996, North Fork completed a business combination with North
Side by merging North Side with and into North Fork Bank. On November 30,
1994, North Fork completed a business combination with Metro by a direct
merger of Metro with and into North Fork. These mergers have been accounted
for as pooling-of-interests transactions and, accordingly, the consolidated
financial results of North Fork for all reported periods preceding such
mergers have been retroactively restated to include the financial results of
North Side and Metro for such periods. Certain financial information of
North Side and Metro has been reclassified to conform with that of North
Fork.
(2) In March, 1996, North Fork Bank completed the purchase of the domestic
commercial banking business of Extebank and 10 Long Island branches of First
Nationwide Bank. These transactions were accounted for under the purchase
method of accounting and, accordingly, North Fork's consolidated results of
operations reflect activity of the acquired operations subsequent to the
acquisition dates. As a result of these acquisitions, North Fork added
approximately $200 million in net loans and $920 million in deposit
liabilities. The intangible assets created in the aforementioned
transactions aggregated approximately $62 million.
(3) Outstanding share figures and all applicable per share amounts have been
restated to reflect the two-for-one common stock split effective May 15,
1997.
(4) North Fork's historical earnings per share for the nine months ended
September 30, 1997 and 1996 and for the five years ended December 31, 1996,
were based on weighted average common shares outstanding plus common stock
equivalents.
(5) Cash dividends declared and the dividend payout ratios have not been
restated for the mergers with North Side and Metro.
(6) Effective January 1, 1994, North Fork adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" (the "Statement"). The Statement requires that
securities available-for-sale be reported at fair value, with unrealized
gains and losses net of tax effects reflected as a separate component of
stockholders' equity. Prior to 1994, these securities were included in the
held-for-sale category and carried at the lower of cost or market with
unrealized losses or gains included in net income.
(7) See accompanying "Selected Financial Ratios" on page S-26 for additional
information.
S-19
<PAGE> 20
NEW YORK BANCORP INC.
SELECTED HISTORICAL FINANCIAL INFORMATION(1)
(UNAUDITED)
(in thousands, except ratios and per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,(2) YEARS ENDED SEPTEMBER 30,
----------------------- --------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY STATEMENTS OF INCOME:
Interest income............. $ 183,432 $ 156,832 $ 207,491 $ 196,972 $ 175,530 $ 160,752 $ 152,417
Interest expense............ 93,095 79,755 106,746 101,730 79,948 71,385 84,415
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income....... 90,337 77,077 100,745 95,242 95,582 89,367 68,002
---------- ---------- ---------- ---------- ---------- ---------- ----------
Provision for loan losses... 1,800 900 1,200 1,700 2,650 4,700 8,404
Non-interest income......... 13,646 7,853 10,321 7,460 7,398 8,745 7,198
Net securities gains/
(losses).................. 2,259 4,112 4,346 (848) 602 2,439 11,787
Other real estate expense... 655 330 463 883 880 1,296 3,413
Merger related restructure
charge.................... -- -- -- 19,024 -- -- --
SAIF recapitalization
charge.................... -- 9,432 9,432 -- -- -- --
Other non-interest
expense................... 37,890 35,625 47,535 48,968 50,845 48,455 42,374
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income
taxes..................... 65,897 42,755 56,782 31,279 49,207 46,100 32,796
Provision for income
taxes..................... 24,950 18,577 24,776 19,717 21,740 20,912 15,346
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative
effect of change in
accounting principle and
extraordinary item........ 40,947 24,178 32,006 11,562 27,467 25,188 17,450
Cumulative effect of change
in accounting for income
taxes(3).................. -- -- -- -- 5,685 -- --
Extraordinary item, early
extinguishment of debt.... -- -- -- -- -- -- (570)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income.................. $ 40,947 $ 24,178 $ 32,006 $ 11,562 $ 33,152 $ 25,188 $ 16,880
========== ========== ========== ========== ========== ========== ==========
Weighted average
common shares
outstanding(4)(5)......... 22,795 23,468 23,889 26,656 27,220 N/M N/M
Common shares outstanding at
period end(4)(5).......... 21,319 22,198 22,198 24,278 26,447 26,176 N/M
CONSOLIDATED PER SHARE DATA:(4)(5)
Net income before cumulative
effect of change in
accounting principle and
extraordinary item(6)..... $ 1.80 $ 1.03 $ 1.34 $ 0.43 $ 1.01 N/M N/M
Net income(6)............... 1.80 1.03 1.34 0.43 1.22 N/M N/M
Cash dividends
declared(7)............... 0.41 0.30 0.40 0.40 0.39 0.32 0.225
Stated book value at period-
end....................... 7.93 6.84 6.84 6.44 6.48 5.87 N/M
Tangible book value at
period-end................ 7.93 6.84 6.84 6.44 6.48 5.87 N/M
Dividend payout ratio(7).... 23% 29% 30% 77% 25% 29% 26%
CONSOLIDATED BALANCE SHEET DATA AT PERIOD END:
Securities:(8)
Available-for-sale........ $ 495,910 $ 444,500 $ 444,500 $ 273,355 $ 189,572 $ 255,970 $ 97,650
Held-to-maturity.......... 644,840 551,460 551,460 685,905 838,577 444,267 474,916
Trading account........... -- -- -- 2,003 12,939 12,487 12,242
Loans, net of unearned
income & fees............. 2,039,111 1,872,548 1,872,548 1,686,215 1,458,059 1,415,245 1,319,218
Allowance for loan losses... 18,695 19,386 19,386 21,272 25,705 26,828 19,455
Total assets................ 3,244,200 2,940,907 2,940,907 2,731,592 2,583,982 2,250,605 2,153,861
Deposits.................... 1,700,748 1,730,350 1,730,350 1,764,755 1,806,532 1,773,919 1,800,928
Federal funds purchased &
Securities sold under
agreements to
repurchase................ 840,331 453,698 453,698 344,860 244,891 156,369 72,350
Other borrowings............ 413,600 555,088 555,088 422,278 334,006 137,324 150,500
Stockholders' equity(9)..... 169,063 151,903 151,903 156,386 171,291 153,769 99,933
</TABLE>
S-20
<PAGE> 21
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,(2) YEARS ENDED SEPTEMBER 30,
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED AVERAGE BALANCE SHEET DATA:
Securities.................. $1,149,588 $ 964,695 $ 960,070 $1,005,239 $ 949,503 $ 618,426 $ 717,837
Loans, net of unearned
income & fees............. 1,982,924 1,778,036 1,752,878 1,560,706 1,411,067 1,425,134 1,074,982
Total assets................ 3,192,755 2,794,216 2,765,402 2,628,232 2,463,204 2,166,011 1,898,980
Deposits.................... 1,705,101 1,751,947 1,754,038 1,768,457 1,803,241 1,776,297 1,365,608
Federal funds purchased &
securities sold under
agreements to
repurchase................ 861,698 328,791 328,405 307,657 232,916 84,968 139,517
Other borrowings............ 406,226 523,804 494,582 361,433 240,038 129,862 266,186
Stockholders' equity(9)..... 164,847 158,534 157,976 169,721 164,665 134,399 94,794
</TABLE>
- ---------------
(1) In January, 1995, New York Bancorp completed a business combination with
Hamilton Bancorp, Inc. ("Hamilton"). The merger was accounted for as a
pooling-of-interest transaction and, accordingly, the consolidated financial
results of New York Bancorp for all reported periods preceding the merger
include the financial results of Hamilton for such periods. Certain
financial information of Hamilton has been reclassified to conform with that
of New York Bancorp.
(2) New York Bancorp's operating results for the nine months ended September 30,
1997 and 1996 are presented to conform with the reporting periods of North
Fork. New York Bancorp's operating results for the three-month periods ended
December 31, 1996 and 1995 have not been included in the foregoing and are
presented in the following table:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-------------------
1996 1995
------- -------
(UNAUDITED)
(IN THOUSANDS,
EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C>
Interest Income........................................ $55,417 $50,659
Interest Expense....................................... 27,538 26,991
Net Interest Income.................................... 27,879 23,668
Net Income............................................. 10,264 7,828
Earnings per share..................................... $ 0.45 $ 0.32
</TABLE>
(3) Reflects the cumulative effect from the adoption of the Statement of
Financial Accounting Standards Number 109 "Accounting for Income Taxes" on
October 1, 1993.
(4) Hamilton converted to stock ownership on April 1, 1993. Accordingly,
restated outstanding share figures and per share data for periods beginning
prior to such time are not meaningful.
(5) Outstanding share figures and all applicable per share amounts have been
restated to reflect the following: (a) the 3-for-2 common stock splits
effective October 22, 1992 and July 29, 1993; (b) the ten percent common
stock dividend effective February 14, 1994; (c) the 3-for-2 common stock
split effective January 23, 1997; and (d) the 4-for-3 stock split effective
July 24, 1997.
(6) New York Bancorp's historical earnings per share for the nine months ended
September 30, 1997 and 1996 and for the five years ended September 30, 1996
were based on weighted average common shares outstanding plus common stock
equivalents.
(7) Cash dividends declared and the dividend payout ratios have not been
restated for the merger with Hamilton.
(8) Effective October 1, 1993, New York Bancorp adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." The statement requires that securities
available-for-sale be reported at fair value, with unrealized gains and
losses net of tax effects reflected as a separate component of stockholders'
equity. Prior to 1993, these securities were included in the held-for-sale
category and carried at the lower of cost or market with unrealized losses
or gains included in net income.
(9) Stockholders' equity at September 30, 1992 includes only the retained
earnings of Hamilton, which converted to stock ownership on April 1, 1993.
(10) See accompanying "Selected Financial Ratios" on page S-26 for additional
information.
S-21
<PAGE> 22
THE MERGERS
GENERAL
On October 7, 1997, North Fork entered into an agreement and plan of merger
with New York Bancorp pursuant to which New York Bancorp will be merged with and
into North Fork. As of September 30, 1997, New York Bancorp had assets of
approximately $3.2 billion, deposits of approximately $1.7 billion and
stockholders' equity of approximately $169 million. New York Bancorp serves
customers from its primary subsidiary, Home Federal, which operates 31 full
service branch offices throughout Kings, Queens, Nassau, Westchester and Suffolk
Counties of New York. Immediately after the New York Bancorp Merger, Home
Federal will be merged with and into North Fork Bank. In connection with the New
York Bancorp Merger, North Fork will issue 1.19 shares of North Fork common
stock for each share of New York Bancorp common stock. The New York Bancorp
Merger is expected to be consummated in the first quarter of 1998 and will be
accounted for under the pooling of interests accounting method. See
"-- Conditions to the Mergers" below.
On July 24, 1997, North Fork entered into an agreement and plan of merger
with Branford pursuant to which Branford will be merged with and into a newly
formed wholly-owned subsidiary of North Fork. As of September 30, 1997, Branford
had $183 million in total assets, $162 million in deposits and $18 million in
stockholders' equity. Branford serves customers from five branches in the
Connecticut towns of Branford, North Branford and East Haven and surrounding
communities in New Haven County, Connecticut. The Branford Merger represents
North Fork's initial acquisition outside the State of New York. In connection
with this transaction, North Fork will issue 1,283,674 shares of North Fork
Common Stock. The Branford Merger is expected to be consummated prior to
December 31, 1997 and will be accounted for under the purchase method of
accounting. See "-- Conditions to the Mergers" below.
OPERATIONS FOLLOWING THE MERGERS
North Fork expects to achieve significant cost savings subsequent to the
New York Bancorp Merger. The cost savings are expected to be derived from
reductions in personnel, elimination of selected branch facilities located in
communities in which both North Fork and New York Bancorp branches are located,
the integration of New York Bancorp's data processing operations with those of
North Fork, and the integration of other facilities and back office operations.
Further, the separate corporate existence of New York Bancorp and Home Federal
will cease with the consummation of the New York Bancorp Merger and the
Subsidiary Bank Merger. Consequently, costs associated with operating as a
publicly held entity will also be eliminated. The aggregate annual pre-tax cost
savings are estimated by North Fork to be approximately $25 million. Management
of North Fork believes that realization of these cost savings will be
substantially phased in before the end of the first full quarter following
consummation of the New York Bancorp Merger. There can be no assurance that all
of the potential cost savings will be realized or that they will be realized in
the time frame currently estimated or thereafter. Such realization will depend,
among other things, upon the existing regulatory and economic environment,
business changes implemented by North Fork management and other factors, certain
of which are beyond the control of North Fork.
Following the Subsidiary Bank Merger, North Fork will convert the former
operations of Home Federal to a full service commercial bank. As such, North
Fork believes, based on its previous experience in acquiring savings banks and
branches of savings banks, that revenue enhancement opportunities exist with the
offering of commercial bank products to Home Federal's customers and the
communities Home Federal serves. These products include but are not limited to a
variety of demand deposit accounts, discount brokerage, investment management
and trust services, cash management, annuity and mutual fund products and
commercial and installment loans to small and midsize businesses. The amounts
and realization of any additional revenues will depend upon a number of factors
including, but not limited to, competition, the economic environment and
regulatory requirements, which are all beyond the control of North Fork.
S-22
<PAGE> 23
Based on the synergies anticipated, North Fork believes that the New York
Bancorp Merger will result in earnings accretion of approximately $.14 per share
in 1998 and approximately $.19 per share in 1999.
For additional factors that could cause actual results to differ materially
from the estimates described above, see "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" in the accompanying Prospectus.
A non-recurring merger and restructuring charge of approximately $34.4
million, net of income tax, will be incurred upon consummation of the New York
Bancorp Merger. The restructuring charge includes merger related compensation,
severance and employee related expenses, facility and system costs and state and
local tax bad debt recapture. For additional information concerning such charge,
see the notes to the "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)."
CONDITIONS TO THE MERGERS
Consummation of each Merger is subject to various mutual conditions,
including, among others, receipt of stockholder approvals, receipt of necessary
regulatory approvals, receipt of opinions of counsel regarding certain federal
income tax consequences of the Mergers, the satisfaction of other customary
closing conditions and, in the case of the New York Bancorp Merger, receipt of a
letter from an independent auditor that the New York Bancorp Merger qualifies
for pooling of interests accounting treatment.
Consummation of the New York Bancorp Merger and the transactions
contemplated thereby (including the Subsidiary Bank Merger) is subject to the
prior approval or notification requirements of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), the Federal Deposit
Insurance Corporation (the "FDIC"), the Office of Thrift Supervision and the New
York State Banking Department. Consummation of the Branford Merger and the
transactions contemplated thereby is subject to the prior approval or
notification requirements of the Federal Reserve Board, the FDIC and the
Connecticut Banking Commissioner. No assurance can be provided, however, as to
whether all conditions precedent to the Mergers will be satisfied or waived by
the party permitted to do so. The sale of the Capital Securities offered hereby
may occur prior to the closing of the Mergers and it is not a condition of such
sale that all of the conditions to the Mergers shall have been satisfied or
waived prior to such sale. In the event that all of the conditions to either of
the Mergers are not satisfied or waived, such Merger will not be completed.
S-23
<PAGE> 24
PRO FORMA COMBINED SELECTED
FINANCIAL STATEMENTS
(UNAUDITED)
The following tables set forth certain selected condensed financial
information for North Fork, Branford and New York Bancorp on an unaudited pro
forma combined basis giving effect to (i) the New York Bancorp Merger, with
respect to all periods indicated, as if the New York Bancorp Merger had become
effective as of the end of the periods indicated, in the case of the balance
sheet information presented, and at the beginning of the periods indicated, in
the case of the income statement information presented, and (ii) the Branford
Merger, with respect to information as of and for the nine months ended
September 30, 1997 and 1996 and as of and for the year ended December 31, 1996,
as if such transaction had become effective as of the end of such periods, in
the case of balance sheet information presented, and as of the beginning of such
periods, in the case of income statement information presented. The pro forma
information in the tables assumes that the New York Bancorp Merger is accounted
for using the pooling-of-interests method of accounting and the Branford Merger
is accounted for using the purchase method of accounting.
The unaudited pro forma combined selected year-end balance sheet and income
statement information reflects information for North Fork and Branford as of and
for their annual reporting periods ended December 31 for each of the periods
indicated and information for New York Bancorp as of and for its annual
reporting period ended September 30 for each of the periods indicated. Financial
information for the nine months ended September 30, 1997 and September 30, 1996
combine North Fork, Branford and New York Bancorp with interim results of New
York Bancorp presented to coincide with the reporting period for North Fork.
Following the New York Bancorp Merger, the combined company's fiscal year, like
that of North Fork, will end on December 31. These tables should be read in
conjunction with, and are qualified in their entirety by, the historical
financial statements, including the notes thereto, of North Fork and New York
Bancorp incorporated by reference herein and the more detailed pro forma
financial information, including the notes thereto, which include certain pro
forma assumptions not included herein, appearing elsewhere in this Prospectus
Supplement. Certain New York Bancorp financial information has been reclassified
to conform with North Fork. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" in the accompanying Prospectus and "PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (UNAUDITED)".
The pro forma financial information set forth in the following tables does
not reflect merger expenses and restructuring charge anticipated to be incurred
in connection with the Mergers, as the case may be, the expected cost savings
and revenue enhancement opportunities that could result from the Mergers or any
other items of income or expense which may result from the Mergers. The
unaudited pro forma combined selected financial information is presented for
informational purposes only and is not necessarily indicative of the combined
financial position or results of operations that would have occurred if the
Mergers had been consummated on September 30, 1997, or at the beginning of the
periods indicated or which may be obtained in the future.
S-24
<PAGE> 25
NORTH FORK BANCORPORATION, INC.
PRO FORMA COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION FOR ALL
TRANSACTIONS
(UNAUDITED)
(in thousands, except ratios and per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEARS ENDED
------------------------ ------------------------------------
1997 1996 1996 1995 1994
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY STATEMENTS OF INCOME:
Interest income....................................... $ 553,386 $ 467,120 $ 626,495 $ 529,464 $ 470,592
Interest expense...................................... 249,693 215,038 287,256 242,129 192,524
----------- ---------- ---------- ---------- ----------
Net interest income................................... 303,693 252,082 339,239 287,335 278,068
----------- ---------- ---------- ---------- ----------
Provision for loan losses............................. 6,500 6,525 8,625 13,525 9,475
Non-interest income................................... 40,096 30,176 40,153 30,470 29,072
Net securities gains/(losses)......................... 4,532 7,080 6,224 5,886 (8,587)
Other real estate expense............................. 916 1,367 1,448 2,138 5,809
Merger related restructure charges.................... -- -- 21,613 19,024 14,338
SAIF recapitalization charge.......................... -- 17,782 17,782 -- --
Other non-interest expense............................ 134,882 122,970 167,063 140,533 150,183
----------- ---------- ---------- ---------- ----------
Income before income taxes............................ 206,023 140,694 169,085 148,471 118,748
Provision for income taxes............................ 79,665 58,209 74,625 69,567 48,242
----------- ---------- ---------- ---------- ----------
Income before cumulative effect of change in
accounting principle................................ 126,358 82,485 94,460 78,904 70,506
Cumulative effect of change in accounting for income
taxes............................................... -- -- -- -- 5,685
----------- ---------- ---------- ---------- ----------
Net income............................................ $ 126,358 $ 82,485 $ 94,460 $ 78,904 $ 76,191
----------- ---------- ---------- ---------- ----------
Weighted average common shares of North Fork
outstanding......................................... 94,625 93,968 93,990 96,153 94,704
Common shares of North Fork outstanding at period
end................................................. 93,592 90,341 92,591 93,508 92,404
CONSOLIDATED PER SHARE DATA APPLICABLE TO
NORTH FORK COMMON STOCK:
Net income before cumulative effect of change in
accounting for income taxes......................... $ 1.34 $ .88 $ 1.01 $ .82 $ .74
Net income............................................ 1.34 .88 1.01 .82 .80
Cash dividends declared............................... .43 .30 .43 .28 .18
Stated book value at period-end....................... 7.88 6.86 6.99 6.23 5.71
Tangible book value at period-end..................... 6.77 5.62 5.80 5.93 5.47
CONSOLIDATED BALANCE SHEET DATA AT PERIOD END:
Securities:
Available-for-sale.................................. $ 2,161,179 $1,847,310 $1,311,996 $1,423,865 $ 331,377
Held-to-maturity.................................... 1,853,830 1,613,125 1,884,981 1,770,734 2,463,007
Trading account..................................... -- -- -- 2,003 12,939
Loans, net of unearned income & fees.................. 5,669,804 4,969,102 5,170,626 4,086,497 3,761,979
Allowance for loan losses............................. 77,046 77,802 77,175 77,899 86,952
Intangible assets..................................... 104,126 111,971 109,507 27,893 22,208
Total assets.......................................... 10,099,013 8,853,553 8,901,721 7,622,458 6,842,809
Deposits.............................................. 6,321,061 6,338,051 6,360,829 5,504,475 5,345,300
Federal funds purchased and securities sold under
agreements to repurchase............................ 2,171,355 1,187,865 1,075,487 987,229 491,766
Other borrowings...................................... 500,600 592,088 595,088 457,278 409,006
Company-obligated mandatorily redeemable capital
securities of subsidiary trust...................... 99,646 -- 99,637 -- --
Stockholders' equity.................................. 737,827 619,810 646,810 582,515 527,212
CONSOLIDATED AVERAGE BALANCE SHEET DATA:
Securities............................................ $ 3,845,378 $3,428,840 $3,381,980 $2,879,863 $2,781,830
Loans, net of unearned income & fees.................. 5,459,984 4,588,465 4,658,481 3,919,342 3,724,486
Total assets.......................................... 9,747,466 8,478,225 8,486,069 7,099,152 6,880,831
Deposits.............................................. 6,341,925 6,237,303 6,283,580 5,402,606 5,403,927
Federal funds purchased and securities sold under
agreements to repurchase............................ 1,987,390 946,137 939,365 658,050 611,114
Other borrowings...................................... 456,482 566,981 536,740 397,830 289,082
Stockholders' equity.................................. 691,859 621,139 625,893 558,816 503,491
</TABLE>
See "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)".
S-25
<PAGE> 26
SELECTED FINANCIAL RATIOS(1)(2)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER
30, YEARS ENDED
----------------- -----------------------------
1997 1996 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:
Return on Average Total Assets:
North Fork..................................... 1.80% 1.42% 1.13% 1.51% 0.97%
New York Bancorp............................... 1.71 1.16 1.16 0.44 1.35
North Fork Pro Forma........................... 1.73 1.30 1.11 1.11 1.11
Return on Average Total Stockholders' Equity:
North Fork..................................... 23.32 18.28 14.48 17.31 12.70
New York Bancorp............................... 33.21 20.37 20.26 6.81 20.13
North Fork Pro Forma........................... 24.42 17.74 15.09 14.12 15.13
Total Stockholders' Equity to Total Assets (end
of period):
North Fork..................................... 8.14 7.55 7.96 8.71 8.36
New York Bancorp............................... 5.21 5.17 5.17 5.73 6.63
North Fork Pro Forma........................... 7.31 7.00 7.27 7.64 7.70
CAPITAL RATIOS:
Tier 1 Risk-Based Capital:
North Fork..................................... 14.34 11.75 15.12 15.64 14.44
New York Bancorp............................... 10.76 10.87 10.87 12.11 14.13
North Fork Pro Forma........................... 13.01 11.34 13.62 14.45 14.33
Regulatory Minimum Requirement................. 4.00 4.00 4.00 4.00 4.00
Total Risk-Based Capital:
North Fork..................................... 15.59 13.01 16.38 16.90 15.71
New York Bancorp............................... 11.94 12.24 12.24 13.02 15.74
North Fork Pro Forma........................... 14.24 12.62 14.90 15.59 15.72
Regulatory Minimum Requirement................. 8.00 8.00 8.00 8.00 8.00
Leverage Ratio:
North Fork..................................... 8.38 6.29 8.61 8.25 7.73
New York Bancorp............................... 5.18 5.25 5.25 5.76 6.62
North Fork Pro Forma........................... 7.23 5.95 7.44 7.35 7.32
ASSET QUALITY DATA:
Allowance for Loan Losses to
Net Loans (end of period):
North Fork................................... 1.56 1.84 1.70 2.36 2.66
New York Bancorp............................. 0.92 1.04 1.04 1.26 1.76
North Fork Pro Forma......................... 1.36 1.57 1.49 1.91 2.31
Allowance for Loan Losses to Nonperforming Loans
(end of period):
North Fork..................................... 444 219 265 151 109
New York Bancorp............................... 107 76 76 70 70
North Fork Pro Forma........................... 237 145 158 115 94
Nonperforming Assets to Total Assets:
North Fork..................................... 0.27 0.50 0.39 0.92 1.62
New York Bancorp............................... 0.58 0.98 0.98 1.18 1.64
North Fork Pro Forma........................... 0.39 0.69 0.61 1.01 1.63
</TABLE>
- ---------------
(1) Ratios for the years reflect the respective fiscal year end of each of North
Fork at December 31 and New York Bancorp at September 30. North Fork Pro
Forma combines North Fork and New York Bancorp at their respective year end
periods. Ratios for the nine months ended September 30, 1997 and 1996
include New York Bancorp for the nine month period to conform with that of
North Fork.
(2) North Fork Pro Forma ratios for the nine months ended September 30, 1997 and
1996 and for the year ended December 31, 1996 have been adjusted to reflect
North Fork's pending acquisition of Branford as if it had been consummated
as of January 1, 1996 and was accounted for under the purchase method. The
accounting for the Branford Merger did not have a material effect on the
historical financial results of North Fork as originally reported.
S-26
<PAGE> 27
PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS
(UNAUDITED)
The following pro forma condensed combined financial statements set forth
certain selected condensed financial information for North Fork, Branford and
New York Bancorp on an unaudited combined basis. The Pro Forma Condensed
Combined Balance Sheets give effect to the New York Bancorp Merger and the
Branford Merger as if such transactions had become effective as of September 30,
1997. The Pro Forma Condensed Combined Statements of Income give effect to the
New York Bancorp Merger and the Branford Merger as if the New York Bancorp
Merger had become effective as of the first day of the periods for which
information is presented and the Branford Merger had become effective as of
January 1,1996. The pro forma information assumes that the New York Bancorp
Merger is accounted for using the pooling of interests method of accounting and
the Branford Merger is accounted for under the purchase method of accounting
(See "NORTH FORK"). New York Bancorp's annual reporting periods are as of and
for the year ended September 30, whereas North Fork and Branford utilize a
calendar year basis. All consolidated financial results for prior full year
periods combine the results of operation of the entities indicated utilizing
their respective reporting periods. New York Bancorp financial results for the
nine months ended September 30, 1997 have been conformed to the calendar year
reporting period of North Fork and Branford. These statements should be read in
conjunction with, and are qualified in their entirety by, the historical
financial statements, including the notes thereto, of North Fork and New York
Bancorp incorporated by reference herein. See "INFORMATION OF CERTAIN DOCUMENTS
BY REFERENCE" in the accompanying Prospectus.
The pro forma condensed combined financial statements do not give effect to
the anticipated cost savings and revenue enhancement opportunities, or the
merger expenses and restructuring charge anticipated to be incurred, that could
result from the New York Bancorp Merger (see "THE MERGERS -- Operations
Following the Mergers") or the Branford Merger (see "NORTH FORK"), and do not
purport to be indicative of the combined financial position or results of
operations of future periods or indicative of the results that would have
occurred had the relevant transaction(s) been consummated on September 30, 1997
or at the beginning of the periods indicated.
S-27
<PAGE> 28
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
COMBINED WITH BRANFORD SAVINGS BANK
PRO FORMA CONDENSED COMBINED BALANCE SHEETS
(UNAUDITED)
SEPTEMBER 30, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
ALL
NORTH FORK/ COMBINED
PRO FORMA BRANFORD NEW YORK PRO FORMA TRANSACTIONS
NORTH FORK BRANFORD ADJUSTMENTS PRO FORMA BANCORP ADJUSTMENTS PRO FORMA
---------- -------- ----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash & Due from Banks............ $ 106,760 $ 4,237 $(2,710)(1) $ 108,287 $ 26,305 -- $ 134,592
Federal Funds Sold............... 35,000 9,875 -- 44,875 -- -- 44,875
Securities:
Available-for-Sale.............. 1,633,737 5,132 -- 1,638,869 495,910 $ 26,400(4) 2,161,179
Held-to-Maturity................ 1,166,329 42,661 -- 1,208,990 644,840 -- 1,853,830
---------- -------- -------- ---------- ---------- -------- -----------
Total Securities................ 2,800,066 47,793 0 2,847,859 1,140,750 26,400 4,015,009
---------- -------- -------- ---------- ---------- -------- -----------
Loans, net of Unearned Income &
Fees............................ 3,509,722 120,971 -- 3,630,693 2,039,111 -- 5,669,804
Allowance for Loan Losses....... 54,611 3,740 -- 58,351 18,695 -- 77,046
---------- -------- -------- ---------- ---------- -------- -----------
Net Loans....................... 3,455,111 117,231 0 3,572,342 2,020,416 0 5,592,758
---------- -------- -------- ---------- ---------- -------- -----------
Premises & Equipment, Net........ 63,717 1,893 -- 65,610 12,711 -- 78,321
Accrued Interest Receivable...... 45,649 1,272 -- 46,921 21,590 -- 68,511
Intangibles...................... 76,692 -- 27,434(1)(2)(3) 104,126 -- -- 104,126
Other Real Estate................ 5,499 110 -- 5,609 1,363 -- 6,972
Other Assets..................... 27,126 457 2,052(3) 29,635 21,065 3,149(5) 53,849
---------- -------- -------- ---------- ---------- -------- -----------
Total Assets.................. $6,615,620 $182,868 $26,776 $6,825,264 $3,244,200 $ 29,549 $10,099,013
========== ======== ======== ========== ========== ======== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Demand Deposits.................. $ 836,020 $10,753 -- $ 846,773 $ 42,808 -- $ 889,581
Savings N.O.W. & Money Market
Deposits........................ 1,895,804 62,749 -- 1,958,553 1,000,873 -- 2,959,426
Time Deposits.................... 1,726,825 88,162 -- 1,814,987 657,067 -- 2,472,054
---------- -------- -------- ---------- ---------- -------- -----------
Total Deposits................ 4,458,649 161,664 0 4,620,313 1,700,748 0 6,321,061
---------- -------- -------- ---------- ---------- -------- -----------
Federal Funds Purchased &
Securities Sold under Agreements
to Repurchase................... 1,331,024 -- -- 1,331,024 840,331 -- 2,171,335
Other Borrowings................. 85,000 2,000 -- 87,000 413,600 -- 500,600
Accrued Expenses & Other
Liabilities..................... 103,020 1,592 5,878(3) 110,490 120,458 37,576(5) 268,524
---------- -------- -------- ---------- ---------- -------- -----------
Total Liabilities............. $5,977,693 $165,256 $ 5,878 $6,148,827 $3,075,137 $ 37,576 $ 9,261,540
---------- -------- -------- ---------- ---------- -------- -----------
Company-Obligated Mandatorily
Redeemable Capital Securities of
Subsidiary Trust................ 99,646 -- -- 99,646 -- -- 99,646
STOCKHOLDERS' EQUITY
Preferred Stock.................. -- -- -- -- -- -- --
Common Stock..................... 165,111 1,557 1,652(1) 168,320 295 65,508(4) 234,123
Additional Paid in Capital....... 109,640 31,227 4,074(1) 144,941 66,495 (120,200)(4) 91,236
Retained Earnings................ 263,931 (15,185) 15,185(1) 263,931 181,851 (34,427)(5) 411,355
Unrealized Gain on Securities
Available-for-Sale, net of
taxes........................... 13,476 13 (13)(1) 13,476 1,514 -- 14,990
Deferred Compensation............ (13,009) -- -- (13,009) -- -- (13,009)
Treasury Stock................... (868) -- -- (868) (81,092) 81,092(4) (868)
---------- -------- -------- ---------- ---------- -------- -----------
Total Stockholders' Equity.... 538,281 17,612 20,898 576,791 169,063 (8,027) 737,827
---------- -------- -------- ---------- ---------- -------- -----------
Total Liabilities and
Stockholders' Equity........ $6,615,620 $182,868 $26,776 $6,825,264 $3,244,200 $ 29,549 $10,099,013
========== ======== ======== ========== ========== ======== ===========
</TABLE>
SELECTED CAPITAL RATIOS:
<TABLE>
<CAPTION>
ALL COMBINED
NEW YORK TRANSACTIONS
NORTH FORK BANCORP PRO FORMA
---------- -------- ------------
<S> <C> <C> <C>
Tier 1 Capital Ratio................................................ 14.34% 10.76% 13.01%
Risk Adjusted Capital Ratio......................................... 15.59% 11.94% 14.24%
Leverage Ratio...................................................... 8.38% 5.18% 7.23%
</TABLE>
See "NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)."
S-28
<PAGE> 29
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
COMBINED WITH BRANFORD SAVINGS BANK
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
ALL COMBINED
PRO FORMA NORTH FORK NEW YORK TRANSACTIONS
NORTH FORK BRANFORD ADJUSTMENTS PRO FORMA BANCORP PRO FORMA
---------- -------- ----------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Interest Income......................... $359,458 $10,496 $369,954 $183,432 $553,386
Interest Expense........................ 151,977 4,621 156,598 93,095 249,693
------- ------- -------- -------- -------- --------
Net Interest Income................. 207,481 5,875 -- 213,356 90,337 303,693
Provision for Loan Losses............... 4,500 200 4,700 1,800 6,500
------- ------- -------- -------- -------- --------
Net Interest Income after Provision
for Loan Losses................... 202,981 5,675 -- 208,656 88,537 297,193
Non-Interest Income..................... 26,032 418 26,450 13,646 40,096
Net Securities Gains.................... 2,273 2,273 2,259 4,532
Other Real Estate Expense............... 163 98 261 655 916
Non-Interest Expense.................... 91,174 4,446 1,372(2) 96,992 37,890 134,882
------- ------- -------- -------- -------- --------
Income before Income Taxes.......... 139,949 1,549 (1,372) 140,126 65,897 206,023
Provision for Income Taxes.............. 54,670 45 -- 54,715 24,950 79,665
------- ------- -------- -------- -------- --------
Net Income.......................... $ 85,279 $ 1,504 $(1,372) $ 85,411 $40,947 $126,358
======= ======= ======== ======== ======== ========
Pro Forma Weighted Average Shares
Outstanding(6)........................ 66,215 7,005 -- 67,499 22,795 94,625
Earnings Per Share...................... $ 1.29 $ 0.21 -- $ 1.27 $ 1.80 $ 1.34
</TABLE>
See "NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)."
S-29
<PAGE> 30
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
COMBINED WITH BRANFORD SAVINGS BANK
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1996 FOR NORTH FORK AND BRANFORD AND
SEPTEMBER 30, 1996 FOR NEW YORK BANCORP
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
ALL COMBINED
PRO FORMA NORTH FORK NEW YORK TRANSACTIONS
NORTH FORK BRANFORD ADJUSTMENTS PRO FORMA BANCORP PRO FORMA
---------- -------- ----------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Interest Income......................... $405,307 $13,697 $419,004 $207,491 $626,495
Interest Expense........................ 174,361 6,149 180,510 106,746 287,256
------- ------- -------- -------- -------- --------
Net Interest Income................. 230,946 7,548 -- 238,494 100,745 339,239
Provision for Loan Losses............... 6,800 625 7,425 1,200 8,625
------- ------- -------- -------- -------- --------
Net Interest Income after Provision
for Loan Losses................... 224,146 6,923 -- 231,069 99,545 330,614
Non-Interest Income..................... 29,245 587 29,832 10,321 40,153
Net Securities Gains.................... 1,878 -- 1,878 4,346 6,224
Other Real Estate Expense............... 753 232 985 463 1,448
SAIF Recapitalization Charge............ 8,350 -- 8,350 9,432 17,782
Merger Related Restructure Charge....... 21,613 -- 21,613 -- 21,613
Non-Interest Expense.................... 112,281 5,418 1,829(2) 119,528 47,535 167,063
------- ------- -------- -------- -------- --------
Income before Income Taxes.......... 112,272 1,860 (1,829) 112,303 56,782 169,085
Provision for Income Taxes.............. 49,830 19 -- 49,849 24,776 74,625
------- ------- -------- -------- -------- --------
Net Income.......................... $ 62,442 $ 1,841 $(1,829) $ 62,454 $32,006 $ 94,460
======= ======= ======== ======== ======== ========
Pro Forma Weighted Average Shares
Outstanding(6)........................ 64,278 6,898 -- 65,562 23,889 93,990
Earnings Per Share...................... $ 0.97 $ 0.27 -- $ 0.95 $ 1.34 $ 1.01
</TABLE>
See "NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)."
S-30
<PAGE> 31
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1995 FOR NORTH FORK AND SEPTEMBER 30, 1995 FOR
NEW YORK BANCORP
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
NORTH
NEW YORK FORK
NORTH FORK BANCORP PRO FORMA
---------- -------- ---------
<S> <C> <C> <C>
Interest Income............................................................ $ 332,492 $196,972 $ 529,464
Interest Expense........................................................... 140,399 101,730 242,129
-------- -------- --------
Net Interest Income...................................................... 192,093 95,242 287,335
Provision for Loan Losses.................................................. 11,825 1,700 13,525
-------- -------- --------
Net Interest Income after Provision for Loan Losses...................... 180,268 93,542 273,810
Non-Interest Income........................................................ 23,010 7,460 30,470
Net Securities Gains/(Losses).............................................. 6,734 (848) 5,886
Other Real Estate Expense.................................................. 1,255 883 2,138
Merger Related Restructure Charge.......................................... -- 19,024 19,024
Non-Interest Expense....................................................... 91,565 48,968 140,533
-------- -------- --------
Income before Income Taxes............................................... 117,192 31,279 148,471
Provision for Income Taxes................................................. 49,850 19,717 69,567
-------- -------- --------
Net Income............................................................... $ 67,342 $ 11,562 $ 78,904
======== ======== ========
Pro Forma Weighted Average Shares Outstanding(6)........................... 64,432 26,656 96,153
Earnings Per Share......................................................... $ 1.05 $ 0.43 $ 0.82
</TABLE>
- ---------------
See "NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)."
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1994 FOR NORTH FORK AND SEPTEMBER 30, 1994 FOR
NEW YORK BANCORP
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
NORTH
NEW YORK FORK
NORTH FORK BANCORP PRO FORMA
---------- -------- ---------
<S> <C> <C> <C>
Interest Income............................................................ $ 295,062 $175,530 $ 470,592
Interest Expense........................................................... 112,576 79,948 192,524
-------- -------- --------
Net Interest Income...................................................... 182,486 95,582 278,068
Provision for Loan Losses.................................................. 6,825 2,650 9,475
-------- -------- --------
Net Interest Income after Provision for Loan Losses...................... 175,661 92,932 268,593
Non-Interest Income........................................................ 21,674 7,398 29,072
Net Security (Losses)/Gains................................................ (9,189) 602 (8,587)
Other Real Estate Expense.................................................. 4,929 880 5,809
Merger Related Restructure Charge.......................................... 14,338 -- 14,338
Non-Interest Expense....................................................... 99,338 50,845 150,183
-------- -------- --------
Income before Income Taxes............................................... 69,541 49,207 118,748
Provision for Income Taxes................................................. 26,502 21,740 48,242
-------- -------- --------
Income before Cumulative Effect of Accounting Changes.................... $ 43,039 $ 27,467 $ 70,506
======== ======== ========
Pro Forma Weighted Average Shares Outstanding(6)........................... 62,312 27,220 94,704
Earnings Per Share before Cumulative Effect of Accounting Changes.......... $ 0.69 $ 1.01 $ 0.74
</TABLE>
- ---------------
See "NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)."
S-31
<PAGE> 32
NORTH FORK BANCORPORATION, INC. AND
NEW YORK BANCORP INC.
NOTES TO PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (UNAUDITED)
(1) Reflects the issuance of 1,283,674 shares of North Fork common stock
utilizing an assumed Exchange Ratio of 0.1957 shares of North Fork common
stock for each share of Branford Voting Common Stock and Branford Non-Voting
Common Stock outstanding at September 30, 1997 (5,179,863 shares and
1,379,533 shares, respectively), and a cash payment to the holder of all
outstanding Branford Warrants (who has exercised a cash election right) of
$2,709,700 representing the excess of the market price as of October 22,
1997 of shares of North Fork common stock that such holder would receive in
the Branford Merger if Branford Warrants were exercised immediately prior to
the consummation, over the total exercise price of the Branford Warrants.
(2) Reflects the excess of the Branford Merger consideration over the fair value
of the net assets acquired, as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
North Fork common stock (1,283,674 shares at $30.00 per
share)...................................................... $ 38,510
Cash payments for the Branford Warrants....................... 2,710
Transaction Cost, net of taxes................................ 3,826
-------
Total consideration........................................... $ 45,046
Branford stockholders' equity at September 30, 1997........... (17,612)
-------
Intangible assets............................................. $ 27,434
=======
</TABLE>
The intangible assets will be amortized utilizing the straight line method
over a fifteen year period. Included in non-interest expense for the nine
month period ended September 30, 1997 and for the year ended December 31,
1996 is $1,372,000 and $1,829,000, respectively, of intangible amortization
expense.
(3) Transaction Costs of approximately $3.8 million, net of taxes, will be
incurred upon consummation of the Branford Merger and will be accounted for
as part of the purchase price for financial reporting purposes. A summary of
the estimated transaction costs are as follows:
<TABLE>
<CAPTION>
TYPE OF COST EXPECTED COSTS
-------------------------------------------------------------- --------------
(IN THOUSANDS)
<S> <C>
Professional Fees............................................. $ 1,747
Merger Related Compensation and Severance Costs............... 1,792
Facility and System Costs..................................... 859
Other Merger Related Costs.................................... 1,480
-------
Total Pre-Tax Transaction Costs............................... 5,878
Less: Related Tax Benefit..................................... (2,052)
-------
Total Transaction Costs, after taxes.......................... $ 3,826
=======
</TABLE>
Refinements to the foregoing estimates may occur subsequent to the
completion of the Branford Merger.
(4) Pro forma adjustments to common stock and additional paid-in capital, at
September 30, 1997, reflect the New York Bancorp Merger accounted for as a
pooling-of-interests through: (a) the reissuance of 800,000 shares of New
York Bancorp common stock from New York Bancorp's treasury, with an average
cost basis of $9.92, at $33.00 per share (which approximated the market
price of the New York Bancorp common stock on or about October 22, 1997),
with transaction proceeds of $26.4 million assumed to be reinvested in
securities available-for-sale; (b) the retirement of the remaining 7,374,522
shares of New York Bancorp common stock held in treasury, with an average
cost basis of $9.92, as of September 30, 1997 and (c) the exchange of
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<PAGE> 33
26,321,186 shares of North Fork common stock at September 30, 1997 (using
the Exchange Ratio of 1.19) for the 22,118,644 adjusted outstanding shares
of New York Bancorp common stock.
(5) The pro forma condensed combined balance sheet reflects a non-recurring
merger and restructuring charge of approximately $34.4 million, net of
taxes, which will be recognized upon consummation of the New York Bancorp
Merger. Such charge will reduce earnings per share for the period in which
such charge is recognized by approximately $.36 (based on pro forma weighted
average shares outstanding of 94,624,522 on September 30, 1997). A summary
of the estimated merger and restructuring charges are as follows:
<TABLE>
<CAPTION>
TYPE OF COST EXPECTED COSTS
-------------------------------------------------------------- --------------
(IN THOUSANDS)
<S> <C>
Merger Expense................................................ $ 9,700
Restructuring Charge:
Merger Related Compensation And Severance Costs............. 15,172
Facility and System Costs................................... 11,814
Other Merger Related Costs.................................. 890
--------
Total Pre-Tax Merger and Restructuring Charge................. 37,576
Add: State and Local Tax Bad Debt Recapture, Net of Federal
Benefit................................................. 9,000
Less: Related Tax Benefit..................................... (12,149)
--------
Total After-Tax Merger and Restructuring Charge............... $ 34,427
========
</TABLE>
Merger expenses consist primarily of investment banking, legal and other
professional fees, and expenses associated with shareholder notification.
Restructure related compensation and severance costs consist primarily of
employee severance, compensation arrangements, transitional staffing and
the related employee benefit expenses. Facility and system costs consist
primarily of lease termination charges and equipment write-offs resulting
from the consolidation of overlapping branch locations and duplicate
headquarters and operational facilities. Also reflected are the costs
associated with the cancellation of certain data and item processing
contracts and the deconversion of existing New York Bancorp computer
systems.
The effect of the proposed charge has been reflected in the pro forma
condensed combined balance sheet as of September 30, 1997; however, since
this charge is non-recurring, it has not been reflected in the pro forma
combined statements of income. Although no assurance can be given, North
Fork expects that cost savings will be achieved at an annual rate of
approximately $25 million on a pre-tax basis by the end of 1998 as a result
of steps to be taken to integrate operations and to achieve efficiencies in
certain combined lines of business. These anticipated merger cost savings
were determined based upon preliminary estimates provided by the management
of North Fork. The pro forma financial information does not give effect to
these expected cost savings, nor does it include any estimates of revenue
enhancements that could be realized with the New York Bancorp Merger.
(6) The pro forma weighted average shares outstanding for the nine month periods
ended September 30, 1997 and for the year ended 1996 reflect the assumed
issuance of 0.1957 shares of North Fork common stock for each voting and
non-voting share average equivalent of Branford common stock outstanding
during such periods (all Branford warrants having been retired under the
cash election), and the pro forma weighted average shares outstanding for
all periods presented reflect the assumed issuance of 1.19 shares of North
Fork common stock for each average equivalent share of New York Bancorp
common stock outstanding during such periods.
(7) North Fork is currently reviewing the investment securities portfolios of
New York Bancorp to determine the classification of such securities as
either available-for-sale or held-to-maturity in connection with North
Fork's existing interest-rate risk position. As a result of this review,
certain reclassifications of New York Bancorp's investment securities may
result. No adjustments have been
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<PAGE> 34
made to either the available-for-sale or the held-to-maturity portfolios in
the accompanying pro forma condensed combined balance sheet to reflect any
such reclassification as a final determination has not been made with
respect to such matters. Any such reclassification will be accounted for in
accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," which
requires that securities transferred from held-to-maturity to
available-for-sale to be transferred at fair value with any unrealized gain
or loss, net of taxes, at the date of transfer recognized as a separate
component of stockholders' equity.
(8) The pro forma financial information presented has been prepared in
conformity with generally accepted accounting principles and prevailing
practices within the financial services industry. In accounting for the
Merger, under generally accepted accounting principles ("GAAP"), the assets
and liabilities of New York Bancorp will be combined with those of North
Fork at book value. In addition, the statements of income for New York
Bancorp will be combined with North Fork as of the earliest period
presented. Certain reclassifications have been included in the pro forma
financial statements to conform to North Fork's presentation. North Fork
utilizes a fiscal year which ends on December 31 for reporting purposes,
whereas New York Bancorp uses a fiscal year which ends on September 30 for
such purposes. The unaudited condensed combined statements of income for
1996, 1995 and 1994 combine North Fork and New York Bancorp at their
respective year-end periods. The unaudited condensed combined statements of
income for the nine month periods ended September 30, 1997 and 1996 include
New York Bancorp for the nine months then ended to conform with the
reporting periods of North Fork. Summary unaudited operating results for the
three months ended December 31, 1996 and 1995, have not been included in the
unaudited pro forma condensed combined financial statements and are
presented in the following table:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
---------------------
1996 1995
------- -------
(UNAUDITED)
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
Interest Income.................................... $55,417 $50,659
Interest expense................................... 27,538 26,991
Net interest income................................ 27,879 23,668
Net income......................................... 10,264 7,828
Earnings per share................................. $0.45 $0.32
</TABLE>
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<PAGE> 35
CAPITALIZATION
The following table sets forth (i) the consolidated capitalization of North
Fork at September 30, 1997, (ii) as adjusted to give effect to the Mergers and
assumptions set forth in the notes to the "PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (UNAUDITED)" and (iii) as further adjusted for the offering
of the Capital Securities. This table is based on, and is qualified in its
entirety by, the historical consolidated financial statements of North Fork, New
York Bancorp and Branford, including the related notes thereto, which are
included in documents incorporated by reference in the accompanying Prospectus,
and should be read in conjunction therewith.
<TABLE>
<CAPTION>
AS ADJUSTED FOR
-----------------------------
CAPITAL
SECURITIES
ISSUANCE
ACTUAL MERGERS AND MERGERS
-------- ---------- ----------------
(Dollars in thousands)
<S> <C> <C> <C>
Senior Note Payable.............................. $ 25,000 $ 25,000 $ 25,000
Other Borrowings -- Long-Term.................... 10,000 122,600 122,600
-------- ---------- ----------------
Total Long Term Borrowings............. $ 35,000 $147,600 $147,600
========= ========== ================
Company-Obligated Mandatorily Redeemable Capital
Securities of Subsidiary Trusts(1)............. $ 99,646 $ 99,646 $199,260
========= ========== ================
Stockholders' Equity
Preferred Stock, $1.00 par value; authorized
10,000,000 shares; none issued.............. -- -- --
Common Stock, $2.50 par value; authorized
200,000,000 shares, issued 66,044,201 shares
(93,649,061 shares, as adjusted)............ $165,111 $234,123 $234,123
Additional paid in capital....................... 109,640 91,236 91,236
Retained Earnings................................ 263,931 411,355 411,355
Unrealized Gain on Securities
Available-for-Sale, net of taxes............... 13,476 14,990 14,990
Deferred Compensation............................ (13,009) (13,009) (13,009)
Treasury Stock at cost, 57,268 shares............ (868) (868) (868)
-------- ---------- ----------------
Total Stockholders' Equity............. $538,281 $737,827 $737,827
========= ========== ================
Capital Ratios
Equity/Assets.................................. 8.14% 7.31% 7.23%
Tier 1 Capital Ratios(2)....................... 14.34 13.01 14.77
Risk Adjusted Capital Ratios(2)................ 15.59 14.24 15.98
Leverage Ratio................................. 8.38 7.23 8.24
</TABLE>
- ---------------
(1) The "Company-Obligated Mandatorily Redeemable Capital Securities of
Subsidiary Trusts" reflects the Capital Securities of North Fork Capital
Trust I and the Trust at their issue prices. As described herein, the sole
assets of each of such trusts will be approximately $103.1 million of junior
subordinated debt securities (including the amounts attributable to the
issuance of the common securities of each trust), which will mature on
December 15, 2026 in the case of North Fork Capital Trust I and December 15,
2027 in the case of the Trust. The Corporation owns all of the common
securities of each trust. It is anticipated that the Trust will not be
subject to the reporting requirements under the Securities Exchange Act of
1934.
(2) Assumes the proceeds from the issuance of capital securities of both trusts
are invested in mortgage-backed securities which have a twenty percent risk
weight.
For additional information relating to the pro forma adjustments contained
herein, see the notes accompanying the "PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS (UNAUDITED)."
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<PAGE> 36
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated into the
Corporation's consolidated financial statements, with the Capital Securities
treated as minority interest and shown in the Corporation's consolidated balance
sheet as "Company-Obligated Mandatorily Redeemable Securities of Subsidiary
Trust." The financial statement footnotes of the Corporation will reflect that
the sole asset of the Trust will be approximately $103.1 million principal
amount of the Junior Subordinated Debt Securities, bearing interest at 8.00% and
maturing on December 15, 2027. All future reports filed by the Corporation under
the Exchange Act will present information regarding the Trust and other similar
trusts in the manner described above.
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Issuer Trustees on behalf of
the Trust will issue the Capital Securities and the Common Securities. The
Capital Securities will represent beneficial ownership interests in the Trust
and the holders thereof will be entitled to a preference in certain
circumstances with respect to Distributions and amounts payable on redemption of
the Trust Securities or liquidation of the Trust over the Common Securities, as
well as other benefits as described in the Declaration. See "-- Subordination of
Common Securities." The Declaration will be qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). This summary of certain
provisions of the Capital Securities, the Common Securities and the Declaration
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Declaration, including the
definitions therein of certain terms. The form of the Declaration has been filed
as an exhibit to the Registration Statement of which the accompanying Prospectus
forms a part.
GENERAL
The Capital Securities will be limited to $100 million aggregate
Liquidation Amount at any one time outstanding. The Capital Securities will rank
pari passu, and payments will be made thereon pro rata, with the Common
Securities except as described under "-- Subordination of Common Securities."
Legal title to the Junior Subordinated Debt Securities will be held by the
Property Trustee on behalf of the Trust in trust for the benefit of the holders
of the Capital Securities and Common Securities. The Guarantee Agreement
executed by the Corporation for the benefit of the holders of the Capital
Securities (the "Guarantee Agreement") will provide for the Guarantee on a
subordinated basis with respect to the Capital Securities but will not guarantee
payment of Distributions or amounts payable on redemption of the Capital
Securities or on liquidation of the Trust when the Trust does not have funds on
hand available to make such payments. See "Description of Guarantee."
DISTRIBUTIONS
The Capital Securities represent beneficial ownership interests in the
Trust, and Distributions on each Capital Security will be payable at the annual
rate of 8.00% of the stated Liquidation Amount of $1,000, and will be payable
semi-annually in arrears on June 15 and December 15 of each year to the holders
of the Capital Securities at the close of business on the June 1 or December 1
(each, a "record date"), as the case may be, next preceding the relevant
Distribution Date (as defined herein). Distributions on the Capital Securities
will be cumulative. Distributions will accumulate from the date of original
issuance. The first Distribution Date for the Capital Securities will be June
15, 1998. The amount of Distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which Distributions are payable on the Capital Securities is not a Business
Day (as defined herein), payment of the Distributions payable on such date will
be made on the next succeeding day that is a Business Day (and without any
additional Distributions or other payments in respect to any such delay) with
the same force and effect as if made on the date such payment was originally
payable (each date on which Distributions are payable in accordance with the
foregoing, a "Distribution Date"). A "Business Day" shall mean any day other
than a Saturday or a Sunday, or a day on which banking institutions in The City
of New York are authorized or required by law or executive order
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<PAGE> 37
to remain closed, or a day on which the corporate trust office of the Property
Trustee or the Debenture Trustee is closed for business.
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture to defer the payment of
interest on the Junior Subordinated Debt Securities at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods with respect
to each Extension Period, provided that no Extension Period may extend beyond
the Stated Maturity of the Junior Subordinated Debt Securities. As a consequence
of any such election, semi-annual Distributions on the Capital Securities by the
Trust will be deferred during any such Extension Period. Distributions to which
holders of the Capital Securities are entitled will accumulate additional
Distributions thereon at the rate per annum of 8.00% thereof, compounded
semi-annually from the relevant payment date for such Distributions. The term
"Distributions" as used herein shall include any such additional Distributions.
During any such Extension Period, the Corporation may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of, the Corporation (including Other Debentures) that rank pari passu
with or junior in interest to the Junior Subordinated Debt Securities, or (iii)
make any guarantee payments with respect to any guarantee by the Corporation of
the debt securities of any subsidiary of the Corporation (including Other
Guarantees) if such guarantee ranks pari passu with or junior in interest to the
Junior Subordinated Debt Securities (other than (a) dividends or distributions
in common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) purchases or acquisitions of shares of the Corporation's common
stock in connection with the satisfaction by the Corporation of its obligations
under any employee benefit plan or any other contractual obligation of the
Corporation (other than a contractual obligation ranking pari passu with or
junior to the Junior Subordinated Debt Securities), (e) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock or (f) the purchase of
fractional interests in shares of the Corporation's stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged). Prior to the termination of any such Extension Period,
the Corporation may further extend such Extension Period, provided that such
extension does not cause such Extension Period to exceed 10 consecutive
semi-annual periods or to extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. Upon the termination of any such Extension Period
and the payment of all amounts then due, and subject to the foregoing
limitations, the Corporation may elect to begin a new Extension Period. The
Corporation must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of any such Extension Period at least
five Business Days prior to the earlier of (i) the date the Distributions on the
Capital Securities would have been payable except for the election to begin such
Extension Period or (ii) the date the Administrative Trustees are required to
give notice to any automated quotation system or to holders of such Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than five Business Days prior to such record date. There is
no limitation on the number of times that the Corporation may elect to begin an
Extension Period. See "Risk Factors -- Option to Extend Interest Payment Date;
Tax Consequences; Market Price Consequences," "Description of Junior
Subordinated Debt Securities -- Option to Extend Interest Payment Date" and
"Certain United States Federal Income Tax Consequences -- Interest Income and
Original Issue Discount."
The Corporation has no current intention of exercising its right to defer
payments of interest on the Junior Subordinated Debt Securities.
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Junior Subordinated
Debt Securities in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. See "Description of Junior Subordinated Debt
Securities --
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<PAGE> 38
General." If the Corporation does not make interest payments on the Junior
Subordinated Debt Securities, the Property Trustee will not have funds available
to pay Distributions on the Capital Securities. The payment of Distributions (if
and to the extent the Trust has funds legally available for the payment of such
Distributions and cash sufficient to make such payments) is guaranteed by the
Corporation on a limited basis as set forth herein under "Description of
Guarantee."
MANDATORY REDEMPTION
Upon the repayment in full at the Stated Maturity or a redemption at any
time in whole or in part of the Junior Subordinated Debt Securities (other than
following the distribution of the Junior Subordinated Debt Securities to the
holders of the Trust Securities), the proceeds from such repayment or redemption
shall be applied by the Property Trustee to redeem a Like Amount of Trust
Securities, upon not less than 30 nor more than 60 days' notice of a date of
redemption (the "Redemption Date"), at the applicable Redemption Price, which
shall be equal to (i) in the case of the repayment of the Junior Subordinated
Debt Securities at the Stated Maturity, the Maturity Redemption Price (equal to
the principal of, and accrued but unpaid interest on, the Junior Subordinated
Debt Securities), (ii) in the case of the redemption of the Junior Subordinated
Debt Securities prior to December 15, 2007 in connection with the occurrence of
a Special Event, the Special Event Redemption Price (equal to the Special Event
Prepayment Price (as defined under "Description of Junior Subordinated Debt
Securities -- Special Event Prepayment")) or (iii) in the case of the optional
redemption of the Junior Subordinated Debt Securities on or after December 15,
2007, the Optional Redemption Price (equal to the Optional Prepayment Price (as
defined under "Description of Junior Subordinated Debt Securities -- Optional
Redemption"). If less than all of the Junior Subordinated Debt Securities are to
be repaid or redeemed on a Redemption Date, then the proceeds from such
repayment or redemption shall be allocated to the redemption pro rata of the
Capital Securities and the Common Securities.
Redemption of the Junior Subordinated Debt Securities prior to Stated
Maturity may be subject to receipt of prior approval by the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debt Securities the Additional
Sums.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities shall not be reduced as a
result of any additional taxes, duties and other governmental charges to which
the Trust has become subject as a result of a Tax Event.
REDEMPTION PROCEDURES
Trust Securities shall be redeemed, if at all, at the applicable Redemption
Price with the proceeds from the contemporaneous repayment or redemption of the
Junior Subordinated Debt Securities. Redemptions of the Trust Securities shall
be made and the applicable Redemption Price shall be payable on each Redemption
Date only to the extent that the Trust has funds on hand available for the
payment of such applicable Redemption Price. See also "-- Subordination of
Common Securities."
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, with respect to the Capital Securities held in
global form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
of the Capital Securities. See "-- Form, Denomination, Book-Entry Procedures and
Transfer." With respect to the Capital Securities held in certificated form, if
any, the Property Trustee, to the extent funds are available, will irrevocably
deposit with the paying agent for the Capital Securities funds sufficient to pay
the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
thereof upon
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<PAGE> 39
surrender of their certificates evidencing the Capital Securities. See
"-- Payment and Paying Agency." Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date shall be payable to the holders of
the Capital Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of the holders of the
Capital Securities will cease, except the right of the holders of the Capital
Securities to receive the applicable Redemption Price, but without interest on
such Redemption Price, and the Capital Securities will cease to be outstanding.
In the event that any date fixed for redemption of Capital Securities is not a
Business Day, then payment of the applicable Redemption Price payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
applicable Redemption Price is improperly withheld or refused and not paid
either by the Trust or by the Corporation pursuant to the Guarantee as described
under "Description of Guarantee," Distributions on Capital Securities will
continue to accrue at the then applicable rate, from the Redemption Date
originally established by the Trust to the date such applicable Redemption Price
is actually paid, in which case the actual payment date will be the date fixed
for redemption for purposes of calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Corporation defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Junior Subordinated Debt
Securities, on and after the Redemption Date, Distributions will cease to accrue
on the Trust Securities called for redemption.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Corporation will have the right at any time to terminate the Trust and
cause a Like Amount of the Junior Subordinated Debt Securities to be distributed
to the holders of the Trust Securities in liquidation of the Trust; provided,
however, that following such distribution of the Junior Subordinated Debt
Securities, the Corporation agrees to use its best efforts to maintain any
ratings of such Junior Subordinated Debt Securities by any nationally recognized
rating agency for so long as any such Junior Subordinated Debt Securities are
outstanding. Such right is subject to prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve.
Upon liquidation of the Trust and certain other events, the Junior
Subordinated Debt Securities may be distributed to holders of the Capital
Securities. Under current United States federal income tax law, if the Trust's
characterization as a grantor Trust is respected, or the Trust is treated as a
partnership for United States federal income tax purposes, then a distribution
of Junior Subordinated Debt Securities upon the dissolution of the Trust would
not be a taxable event to holders of the Capital Securities. In the unlikely
event that the Trust is characterized for United States federal income tax
purposes as an association taxable as a corporation at the time of dissolution
of the Trust, the distribution of the Junior Subordinated Debt Securities may
constitute a taxable event to holders of Capital Securities. Moreover, upon the
occurrence of a Special Event, a dissolution of the Trust in which holders of
the Capital Securities receive cash would be a taxable event to such holders.
See "Certain United States Federal Income Tax Consequences -- Receipt of Junior
Subordinated Debt Securities or Cash Upon Liquidation of the Trust."
The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debt
Securities to the holders of the Trust Securities if the Corporation, as
Depositor, has given written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly within
the discretion of the Corporation, as Depositor);
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<PAGE> 40
(iii) redemption of all of the Trust Securities as described under
" -- Mandatory Redemption" above; (iv) expiration of the term of the Trust; and
(v) the entry of an order for the dissolution of the Trust by a court of
competent jurisdiction.
If an early termination occurs as described in clause (i), (ii), (iv) or
(v) above, the Trust shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, to the holders of such Trust Securities a Like Amount of the Junior
Subordinated Debt Securities, unless such distribution would not be practical,
in which event such holders will be entitled to receive out of the assets of the
Trust available for distribution to holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to, in
the case of holders of Capital Securities, the aggregate of the Liquidation
Amount plus accumulated and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Capital Securities shall be paid on
a pro rata basis. The holder(s) of the Common Securities will be entitled to
receive distributions upon any such liquidation pro rata with the holders of the
Capital Securities, except that if a Debenture Event of Default has occurred and
is continuing, the Capital Securities shall have a priority over the Common
Securities. See "-- Subordination of Common Securities." If an early termination
occurs as described in clause (v) above, the Junior Subordinated Debt Securities
will be subject to optional redemption in whole (but not in part).
"Like Amount" means (i) with respect to a redemption of Capital Securities,
Capital Securities having a Liquidation Amount equal to that portion of the
principal amount of Junior Subordinated Debt Securities to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Capital Securities based upon the relative Liquidation Amounts of
such classes and the proceeds of which will be used to pay the Redemption Price
of the Capital Securities and (ii) with respect to a distribution of Junior
Subordinated Debt Securities to holders of Capital Securities in connection with
a dissolution or liquidation of the Trust, Junior Subordinated Debt Securities
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the holder to whom such Junior Subordinated Debt Securities are
distributed.
If the Corporation elects not to redeem the Junior Subordinated Debt
Securities prior to maturity and the Trust is not liquidated and the Junior
Subordinated Debt Securities are not distributed to holders of the Trust
Securities, the Capital Securities will remain outstanding until the repayment
of the Junior Subordinated Debt Securities at the Stated Maturity.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debt Securities to holders of the Trust Securities (i) the Capital
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee,
as the record holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Junior Subordinated Debt Securities
to be delivered upon such distribution with respect to Capital Securities held
by DTC or its nominee and (iii) any certificates representing Capital Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debt Securities having a principal amount equal to the Liquidation Amount of
such Capital Securities and bearing accrued and unpaid interest in an amount
equal to the accumulated and unpaid Distributions on such Capital Securities
until such certificates are presented to the Administrative Trustees or their
agent for cancellation, whereupon the Corporation will issue to such holder, and
the Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debt Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debt Securities that the investor may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Capital Securities offered
hereby.
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SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata to the
holders of Capital Securities and Common Securities based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any Distribution
Date or Redemption Date any Event of Default resulting from a Debenture Event of
Default or an Event of Default under the Declaration shall have occurred and be
continuing, no payment of any Distribution on, or applicable Redemption Price
of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid Distributions
on all of the outstanding Capital Securities for all Distribution periods
terminating on or prior thereto, or, in the case of payment of the applicable
Redemption Price, the full amount of such Redemption Price on, all of the
outstanding Capital Securities, shall have been made or provided for, and all
funds available to the Property Trustee shall first be applied to the payment in
full in cash of all Distributions on, or the Redemption Price of, the Capital
Securities then due and payable.
In the case of any Event of Default under the Declaration resulting from a
Debenture Event of Default, the Corporation as holder of the Common Securities
will be deemed to have waived any right to act with respect to any such Event of
Default until the effect of all such Events of Default have been cured, waived
or otherwise eliminated. Until all such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the holders of such Capital Securities and not on behalf of the Corporation
as holder of the Common Securities, and only the holders of the Capital
Securities will have the right to direct the Property Trustee to act on their
behalf.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under the
Declaration (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description
of Junior Subordinated Debt Securities -- Debenture Events of Default"); or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days; or
(iii) default by the Trust in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of which
or the breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Issuer Trustees by the holders of at least 25% in aggregate
Liquidation Amount of the outstanding Capital Securities, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under the Declaration; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Corporation to
appoint a successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Depositor, unless such Event of
Default shall have been cured or waived. The Corporation, as Depositor, and the
Administrative Trustees are
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required to file annually with the Property Trustee a certificate as to whether
or not they are in compliance with all the conditions and covenants applicable
to them under the Declaration.
If a Debenture Event of Default or an Event of Default under the
Declaration has occurred and is continuing, the Capital Securities shall have a
preference over the Common Securities as described above. See "-- Liquidation of
the Trust and Distribution of Junior Subordinated Debt Securities" and
"-- Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Declaration.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust's property
may at the time be located, the Corporation, as the holder of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of such Trust's property, or to act as separate trustee of
any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Declaration. In case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated or any Person resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
Declaration, provided such Person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise set forth in the Declaration. The Trust may, at
the request of the Corporation, as Depositor, with the consent of the
Administrative Trustees but without the consent of the holders of the Capital
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to, a trust organized as such
under the laws of any State; provided, however, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital Securities rank in priority with respect to distributions
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and payments upon liquidation, redemption and otherwise, (ii) the Corporation
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee as the holder of the Junior Subordinated Debt
Securities, (iii) the Successor Securities are listed or traded, or any
Successor Securities will be listed or traded upon notification of issuance, on
any national securities exchange or other organization on which the Capital
Securities are then listed or traded, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
(vi) such successor entity has a purpose identical to that of the Trust, (vii)
prior to such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Corporation has received an opinion from independent
counsel to the Trust experienced in such matters to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Capital Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
(viii) the Corporation or any permitted successor or assignee owns all of the
common securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it, if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and the Declaration, the
holders of the Capital Securities will have no voting rights.
The Declaration may be amended from time to time by the Corporation, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to matters or
questions arising under the Declaration, which shall not be inconsistent with
the other provisions of the Declaration, or (ii) to modify, eliminate or add to
any provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (i), such action shall not adversely affect in any material respect
the interests of any holder of Trust Securities, and any amendments of the
Declaration shall become effective when notice thereof is given to the holders
of the Trust Securities. The Declaration may be amended by the Issuer Trustees
and the Corporation with (i) the consent of holders representing not less than a
majority (based upon Liquidation Amounts) of the outstanding Trust Securities,
and (ii) receipt by the Issuer Trustees of an opinion of counsel to the effect
that such amendment or the exercise of any power granted to the Issuer Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act. In addition, without the consent of each holder of Trust Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of
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the Trust Securities as of a specified date or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
So long as any Junior Subordinated Debt Securities are held by the Trust,
the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Junior Subordinated Debt Securities, (ii) waive any past default that is
waivable under Section 5.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debt Securities affected thereby, no such consent
shall be given by the Property Trustee without the prior consent of each holder
of the Capital Securities. The Issuer Trustees shall not revoke any action
previously authorized or approved by a vote of the holders of the Capital
Securities except by subsequent vote of such holders. The Property Trustee shall
notify each holder of Capital Securities of any notice of default with respect
to the Junior Subordinated Debt Securities. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as an association or as a publicly traded partnership taxable as a
corporation for United States federal income tax purposes on account of such
action.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of Capital Securities will be required
for the Trust to redeem and cancel the Capital Securities in accordance with the
Declaration.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
EXPENSES AND TAXES
In the Indenture, the Corporation, as borrower, has agreed to pay all debts
and other obligations (other than with respect to payments of Distributions,
amounts payable upon redemption and the Liquidation Amount of the Trust
Securities) and all costs and expenses of the Trust (including costs and
expenses relating to the organization of the Trust, the fees and expenses of the
Issuer Trustees and the costs and expenses relating to the operation of the
Trust) and the offering of the Capital Securities, and to pay any and all taxes
and all costs and expenses with respect to the foregoing (other than United
States withholding taxes) to which the Trust might become subject. The foregoing
obligations of the Corporation under the Indenture are for the benefit of, and
shall be enforceable by, any person to whom any such debts, obligations, costs,
expenses and taxes are owed (a "Creditor") whether or not such Creditor has
received notice thereof. Any such Creditor may enforce such obligations of the
Corporation directly against the Corporation, and the Corporation has
irrevocably waived any right or remedy to require that any such Creditor take
any action against the Trust or any other person before proceeding against the
Corporation. The Corporation has also agreed in the Indenture to execute such
additional agreement(s) as may be necessary or desirable to give full effect to
the foregoing.
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FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The Capital Securities will be represented by one or more Capital
Securities in registered, global form (collectively, the "Global Capital
Securities"). The Global Capital Securities will be deposited upon issuance with
the Property Trustee as custodian for DTC, in New York, New York, and registered
in the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below. See "-- Exchange of
Book-Entry Capital Securities for Certificated Capital Securities."
Transfer of beneficial interests in the Global Capital Securities will be
subject to the applicable rules and procedures of DTC and its direct or indirect
participants which may change from time to time.
Depositary Procedures
DTC has advised the Trust and the Corporation as follows: DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
to accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Underwriters), banks, trust companies, clearing corporations and
certain other organizations. Indirect access to DTC's system is also available
to other entities such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly (collectively, the "Indirect Participants"). Persons who are not
Participants may beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The ownership interest
and transfer of ownership interest of each actual purchaser of each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants designated by the Underwriters with
portions of the principal amount of the Global Capital Securities and (ii)
ownership of such interests in the Global Capital Securities will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the Participants and
the Indirect Participants (with respect to other owners of beneficial interests
in the Global Capital Securities).
Investors in the Global Capital Securities may hold their interests therein
directly through DTC, if they are Participants in DTC, or indirectly through
organizations which are Participants in such system. All interests in a Global
Capital Security will be subject to the procedures and requirements of DTC. The
laws of some states require that certain persons take physical delivery in
certificated form. Consequently, the ability to transfer beneficial interests in
a Global Capital Security to such persons will be limited to that extent.
Because DTC can act only on behalf of Participants, which in turn act on behalf
of Indirect Participants and certain banks, the ability of a person having
beneficial interests in a Global Capital Security to pledge such interests to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests. For certain other restrictions on the
transferability of the Capital Securities, see "-- Exchange of Book-Entry
Capital Securities for Certificated Capital Securities."
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EXCEPT AS DESCRIBED BELOW, OWNERS OF BENEFICIAL INTERESTS IN THE GLOBAL
CAPITAL SECURITIES WILL NOT BE ENTITLED TO HAVE CAPITAL SECURITIES REGISTERED IN
THEIR NAMES, WILL NOT RECEIVE OR BE ENTITLED TO RECEIVE PHYSICAL DELIVERY OF
CAPITAL SECURITIES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE
REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE DECLARATION FOR ANY PURPOSE.
Payments in respect of the Global Capital Securities registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC or its
nominee as the registered holder under the Declaration by wire transfer in
immediately available funds on each interest payment date. Under the terms of
the Declaration, the Property Trustee will treat the persons in whose names the
Capital Securities, including the Global Capital Securities, are registered as
the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Property Trustee nor
any agent thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participant's or Indirect Participant's records
relating to, or payments made on account of, beneficial ownership interests in
the Global Capital Securities, or for maintaining, supervising or reviewing any
of DTC's records or any Participant's or Indirect Participant's records relating
to the beneficial ownership interests in the Global Capital Securities, or (ii)
any other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Trust and the
Corporation that its current practice, upon receipt of any payment in respect of
securities such as the Capital Securities, is to credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of beneficial
interests in the Global Capital Securities, as shown on the records of DTC,
unless DTC has reason to believe it will not receive payment on such payment
date. Payments by the Participants and the Indirect Participants to the
beneficial owners of Capital Securities represented by Global Capital Securities
held through such Participants will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee or the Trust. Neither the Trust nor the Property Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Capital Securities, and the Trust and the Property Trustee may
conclusively rely on, and will be protected in relying on, instructions from DTC
or its nominee for all purposes.
Interests in the Global Capital Securities will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such interests
will therefore settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised the Trust and the Corporation that it will take any action
permitted to be taken by a holder of Capital Securities (including, without
limitation, the presentation of Capital Securities for exchange as described
below) only at the direction of one or more Participants to whose account with
DTC interests in the Global Capital Securities are credited and only in respect
of such portion of the aggregate Liquidation Amount of the Capital Securities
represented by the Global Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Declaration, DTC reserves the right to exchange the Global
Capital Securities for legended Capital Securities in certificated form and to
distribute such Capital Securities to its Participants.
So long as DTC or its nominee is the registered owner of the Global Capital
Securities, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Capital Securities represented by the Global Capital
Securities for all purposes under the Declaration.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Trust and the Corporation believe to be
reliable, but neither the Trust nor the Corporation takes responsibility for the
accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interest in the Global Capital Securities among Participants in DTC, it is
under no obligation to perform or to continue to
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perform such procedures, and such procedures may be discontinued at any time.
Neither the Trust nor the Property Trustee will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is no
longer willing or able to properly discharge its responsibilities with respect
to the Capital Securities and the Corporation is unable to locate a qualified
successor, or (y) has ceased to be a "clearing agency" registered under the
Exchange Act; (ii) the Corporation at its option elects to terminate the
book-entry system through DTC; or (iii) there shall have occurred and be
continuing a Debenture Event of Default. In addition, beneficial interests in a
Global Capital Security may be exchanged by or on behalf of DTC for certificated
Capital Securities upon request by DTC, but only upon at least 20 days prior
written notice given to the Property Trustee in accordance with DTC's customary
procedures. In all cases, certificated Capital Securities delivered in exchange
for any Global Capital Security or beneficial interests therein will be
registered in the names, and issued in any approved denominations, requested by
or on behalf of DTC (in accordance with its customary procedures).
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities held in global form shall be
made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates or in respect of the Capital
Securities that are not held by the Depositary, if any, such payments shall be
made by check mailed to the address of the holder entitled thereto as such
address shall appear on the register. The paying agent (the "Paying Agent")
shall initially be the Property Trustee and any co-paying agent chosen by the
Property Trustee and acceptable to the Administrative Trustees and the
Corporation. The Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Property Trustee, the Administrative Trustees and
the Corporation. In the event that the Property Trustee shall no longer be the
Paying Agent, the Administrative Trustees shall appoint a successor (which shall
be a bank or trust company acceptable to the Administrative Trustees and the
Corporation) to act as Paying Agent. Bankers Trust Company has informed the
Trust that so long as it serves as Paying Agent for the Capital Securities, it
anticipates that information regarding Distributions on the Capital Securities,
including payment date, record date and redemption information, will be made
available through Bankers Trust Company at 1-800-735-7777.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Capital Securities.
Registration of transfers of the Capital Securities will be effected
without charge by or on behalf of the Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Capital Securities after they have been called
for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Declaration and, during the existence of an Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the
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matter is not one on which holders of the Capital Securities or the Common
Securities are entitled under the Declaration to vote, then the Property Trustee
shall take such action as is directed by the Corporation and, if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes, and so that the Junior Subordinated Debt Securities will be treated as
indebtedness of the Corporation for United States federal income tax purposes.
In this connection, the Corporation and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the Declaration, that the Corporation and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Junior Subordinated Debt Securities are to be issued as a separate
series under the Indenture. The Indenture has been qualified under the Trust
Indenture Act. This summary of certain terms and provisions of the Junior
Subordinated Debt Securities and the Indenture does not purport to be complete,
and where reference is made to particular provisions of the Indenture, such
provisions, including the definitions of certain terms, some of which are not
otherwise defined herein, are qualified in their entirety by reference to all of
the provisions of the Indenture and those terms made a part of the Indenture by
the Trust Indenture Act. The Indenture was filed as an exhibit to the
Registration Statement on Form S-4 (File No. 333-24419) filed by the Corporation
with the Commission on April 2, 1997.
GENERAL
Concurrently with the issuance of the Trust Securities, the Trust will
invest the proceeds thereof in Junior Subordinated Debt Securities issued by the
Corporation. The Junior Subordinated Debt Securities will bear interest at the
annual rate of 8.00% of the principal amount thereof, payable semi-annually in
arrears on June 15 and December 15 of each year (each, an "Interest Payment
Date"), commencing June 15, 1998, to the person in whose name each Junior
Subordinated Debt Security is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
It is anticipated that, until the liquidation of the Trust, each Junior
Subordinated Debt Security will be held by the Trust for the benefit of the
holders of the Trust Securities. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on the Junior Subordinated Debt
Securities is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), with the same force
and effect as if made on the date such payment was originally payable. Accrued
interest that is not paid on the applicable Interest Payment Date will bear
additional interest on the amount thereof (to the extent permitted by law) at
the rate per annum of 8.00% thereof, compounded semi-annually from the relevant
Interest Payment Date. The term "interest" as used herein shall include
semi-annual interest payments, interest on semi-annual interest payments not
paid on the applicable Interest Payment Date and Additional Sums (as defined
herein), as applicable.
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The Junior Subordinated Debt Securities will be issued as a series of
Junior Subordinated Debt Securities under the Indenture. Unless previously
redeemed or repurchased, the Junior Subordinated Debt Securities will mature on
December 15, 2027.
The Junior Subordinated Debt Securities will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Debt. Because the
Corporation is a bank holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary, including the Bank,
upon such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of such subsidiary,
except to the extent that the Corporation may itself be recognized as a creditor
of such subsidiary. Accordingly, the Junior Subordinated Debt Securities will be
subordinated to all Senior Debt and effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Junior
Subordinated Debt Securities should look only to the assets of the Corporation
for payments on the Junior Subordinated Debt Securities. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture or any existing
or other indenture that the Corporation may enter into in the future or
otherwise. See "-- Subordination."
The Junior Subordinated Debt Securities will rank pari passu with all Other
Debentures issued under the Indenture and will be unsecured and subordinate and
junior in right of payment to the extent and in the manner set forth in the
Indenture to all Senior Debt of the Corporation. See "-- Subordination." The
Corporation is a non-operating holding company and almost all of the operating
assets of the Corporation and its consolidated subsidiaries are owned by such
subsidiaries. The Corporation relies primarily on dividends from such
subsidiaries to meet its obligations. The Corporation is a legal entity separate
and distinct from its present and future banking and non-banking affiliates. The
Corporation's bank subsidiaries are subject to certain restrictions imposed by
federal law on any extensions of credit to, and certain other transactions with,
the Corporation and certain other affiliates, and on investments in stock or
other securities thereof. Such restrictions prevent the Corporation and such
other affiliates from borrowing from such banks unless the loans are secured by
various types of collateral. In addition, payment of dividends to the
Corporation by a bank subsidiary is subject to ongoing review by banking
regulators and is subject to various statutory limitations and in certain
circumstances requires approval by banking regulatory authorities. On December
31, 1996, the Corporation issued $103.1 million of junior subordinated debt
securities pursuant to the Indenture. Additional series of Other Debentures will
be issuable in one or more series pursuant to an indenture supplemental to the
Indenture or a resolution of the Corporation's Board of Directors or an
authorized committee thereof.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Junior Subordinated Debt Securities will be represented by one or more
global certificates registered in the name of Cede & Co. as the nominee of DTC
if, and only if, distributed to the holders of the Trust Securities. Until such
time, the Junior Subordinated Debt Securities will be registered in the name of
the Trust and held by the Property Trustee. Should the Junior Subordinated Debt
Securities be distributed to holders of the Trust Securities, beneficial
interests in the Junior Subordinated Debt Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
Participants in DTC. Except as described below, Junior Subordinated Debt
Securities in certificated form will not be issued in exchange for global
certificates.
A global security shall be exchangeable for Junior Subordinated Debt
Securities registered in the names of persons other than Cede & Co. only if (i)
DTC notifies the Corporation that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have been
appointed, or if at any time DTC ceases to be a "clearing agency" registered
under the Exchange Act, at a time when DTC is required to be so registered to
act as such depositary, (ii) the Corporation in its sole discretion determines
that such global security shall be so exchangeable, or (iii) there shall have
occurred and be continuing a Debenture Event of Default. Any global security
that is exchangeable pursuant to the preceding sentence shall be exchangeable
for certificates registered in such names as DTC shall direct. It is expected
that such instructions will be based upon directions received by DTC from
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its Participants with respect to ownership of beneficial interests in such
global security. In the event that Junior Subordinated Debt Securities are
issued in certificated form, such Junior Subordinated Debt Securities will be in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof and may be transferred or exchanged only in such minimum denominations
and in the manner and at the offices described below.
Payments on Junior Subordinated Debt Securities represented by a global
security will be made to DTC, as the depositary for the Junior Subordinated Debt
Securities. In the event Junior Subordinated Debt Securities are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Debt Securities will be registrable, and Junior Subordinated
Debt Securities will be exchangeable for Junior Subordinated Debt Securities of
other denominations of a like aggregate principal amount, at the corporate
office of the Debenture Trustee in New York, New York, or at the offices of any
paying agent or transfer agent appointed by the Corporation, provided that
payment of interest may be made at the option of the Corporation by check mailed
to the address of the persons entitled thereto or by wire transfer. In addition,
if the Junior Subordinated Debt Securities are issued in certificated form, the
record dates for payment of interest will be the 1st day of the last month of
each semi-annual period.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of Capital Securities -- Form, Denomination,
Book-Entry Procedures and Transfer." If the Junior Subordinated Debt Securities
are distributed to the holders of the Trust Securities upon the termination of
the Trust, the form, denomination, book-entry and transfer procedures with
respect to the Capital Securities as described under "Description of Capital
Securities -- Form, Denomination, Book-Entry Procedures and Transfer," shall
apply to the Junior Subordinated Debt Securities mutatis mutandis.
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debt Securities will be made at the office of the Debenture Trustee
in the City of New York or at the office of such Paying Agent or Paying Agents
as the Corporation may designate from time to time, except that at the option of
the Corporation payment of any interest may be made (except in the case of
Junior Subordinated Debt Securities in global form), (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
register for Junior Subordinated Debt Securities or (ii) by transfer to an
account maintained by the person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Junior Subordinated Debt Security
will be made to the person in whose name such Junior Subordinated Debt Security
is registered at the close of business on the Record Date for such interest,
except in the case of defaulted interest. The Corporation may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent; however the Corporation will at all times be required to maintain a
Paying Agent in each Place of Payment for the Junior Subordinated Debt
Securities.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debt Security and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall, at the request of the Corporation, be
repaid to the Corporation and the holder of such Junior Subordinated Debt
Security shall thereafter look, as a general unsecured creditor, only to the
Corporation for payment thereof.
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<PAGE> 51
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture to defer the payment of
interest at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period; provided,
however, that no Extension Period may extend beyond the Stated Maturity of the
Junior Subordinated Debt Securities. At the end of an Extension Period, the
Corporation must pay all interest then accrued and unpaid on the Junior
Subordinated Debt Securities (together with interest thereon at the annual rate
of 8.00%, compounded semi-annually from the relevant Interest Payment Date, to
the extent permitted by applicable law). During an Extension Period, interest
will continue to accrue and holders of Junior Subordinated Debt Securities (and
holders of the Capital Securities while Capital Securities are outstanding) will
be required to accrue interest income (in the form of OID) for United States
federal income tax purposes. See "Certain United States Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
During any Extension Period, the Corporation may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation (including any Other Debentures) that rank pari
passu with or junior in interest to the Junior Subordinated Debt Securities or
(iii) make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu with or
junior in interest to the Junior Subordinated Debt Securities (other than (a)
dividends or distributions in common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) purchases or acquisitions of shares of the
Corporation's common stock in connection with the satisfaction by the
Corporation of its obligations under any employee benefit plan or any other
contractual obligation of the Corporation (other than a contractual obligation
ranking pari passu with or junior to the Junior Subordinated Debt Securities),
(e) as a result of a reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock, or (f) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged). Prior to the termination of any
Extension Period, the Corporation may further extend such Extension Period;
provided, however, that such extension does not cause such Extension Period to
exceed 10 consecutive semi-annual periods or to extend beyond the Stated
Maturity. Upon the termination of any Extension Period and the payment of all
interest then accrued and unpaid on the Junior Subordinated Debt Securities
(together with interest thereon at the annual rate of 8.00%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period, except at the end
thereof. The Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any Extension
Period (or an extension thereof) at least five Business Days prior to the
earlier of (i) the date the Distributions on the Trust Securities would have
been payable except for the election to begin or extend such Extension Period or
(ii) the date the Administrative Trustees are required to give notice to any
automated quotation system or to holders of Capital Securities of the record
date or the date such Distributions are payable, but in any event not less than
five Business Days prior to such record date. The Debenture Trustee shall give
notice of the Corporation's election to begin or extend a new Extension Period
to the holders of the Capital Securities. There is no limitation on the number
of times that the Corporation may elect to begin an Extension Period.
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<PAGE> 52
OPTIONAL REDEMPTION
The Junior Subordinated Debt Securities will be redeemable, in whole or in
part, at the option of the Corporation at any time prior to Stated Maturity and
on or after December 15, 2007, subject to the Corporation having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, at a redemption price (the
"Optional Prepayment Price") equal to the following prices, expressed in
percentages of the principal amount of the Junior Subordinated Debt Securities
plus accrued but unpaid interest to but excluding the date fixed for redemption.
If redeemed during the 12-month period beginning December 15:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
------------------------------------------------------------------------- ----------
<S> <C>
2007..................................................................... 103.8070
2008..................................................................... 103.4263
2009..................................................................... 103.0456
2010..................................................................... 102.6649
2011..................................................................... 102.2842
2012..................................................................... 101.9035
2013..................................................................... 101.5228
2014..................................................................... 101.1421
2015..................................................................... 100.7614
2016..................................................................... 100.3807
</TABLE>
and at 100% on or after December 15, 2017.
SPECIAL EVENT PREPAYMENT
If a Special Event shall occur and be continuing, the Corporation may, at
its option and subject to receipt of prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve, prepay the Junior Subordinated Debt Securities prior to December 15,
2007 and within 90 days after the occurrence of such Special Event, in whole,
but not in part, at a prepayment price (the "Special Event Prepayment Price")
equal to the greater of (i) 100% of the principal amount of such Junior
Subordinated Debt Securities or (ii) the sum, as determined by a Quotation
Agent, of the present values of the principal amount and premium payable as part
of the Redemption Price with respect to an optional redemption of such Junior
Subordinated Debt Securities on December 15, 2007, together with scheduled
payments of interest accruing from the prepayment date to December 15, 2007 (the
"Remaining Life"), in each case discounted to the prepayment date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus, in each case, accrued interest thereon to the date
of prepayment. See "Description of Capital Securities -- Liquidation of the
Trust and Distribution of Junior Subordinated Debt Securities."
"Special Event" means a Tax Event or a Regulatory Capital Event.
"Tax Event" means the receipt by the Corporation of an opinion of
independent counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced proposed change) in, the
laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
Issue Date, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debt Securities, (ii) interest payable by the Corporation on the
Junior Subordinated Debt Securities is not, or within 90 days of the date of
such opinion, will not be, deductible by the Corporation, in whole or in part,
for United States federal income tax purposes, or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
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A "Regulatory Capital Event" means that the Corporation shall have received
an opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any rules, guidelines or policies of the Federal Reserve or (b)
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of original
issuance of the Capital Securities, the Capital Securities do not constitute, or
within 90 days of the date thereof, will not constitute, Tier 1 capital (or its
then equivalent); provided, however, that the distribution of the Junior
Subordinated Debt Securities in connection with the liquidation of the Trust by
the Corporation and the treatment thereafter of the Junior Subordinated Debt
Securities as other than Tier 1 capital shall not in and of itself constitute a
Regulatory Capital Event unless such liquidation shall have occurred in
connection with a Tax Event.
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication which
is published weekly by the Federal Reserve and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity corresponding
to the Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the Adjusted
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date, in each case calculated on the third Business Day
preceding the prepayment date, plus in each case (a) 1.25% if such prepayment
date occurs on or prior to December 15, 1998 and (b) 0.50% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life of the Junior Subordinated Debt Securities to be prepaid that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity with the Remaining Life of the Junior Subordinated Debt Securities. If
no United States Treasury security has a maturity which is within a period from
three months before to three months after December 15, 2007, the two most
closely corresponding United States Treasury securities shall be used as the
Comparable Treasury Issue, and the Adjusted Treasury Rate shall be interpolated
or extrapolated on a straight-line basis, rounding to the nearest month using
such securities.
"Comparable Treasury Price" means, with respect to any prepayment date, (a)
the average of five Reference Treasury Dealer Quotations for such prepayment
date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (b) if the Debenture Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Quotation Agent" means the Reference Treasury Dealer set forth in clause
(i) below. "Reference Treasury Dealer" means: (i) Salomon Brothers Inc and its
respective successors; provided, however, that if the foregoing shall cease to
be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Corporation shall substitute therefor another Primary
Treasury Dealer; or (ii) any other Primary Treasury Dealer selected by the
Debenture Trustee after consultation with the Corporation.
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<PAGE> 54
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such prepayment date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated Debt
Securities to be redeemed at its registered address. Unless the Corporation
defaults in payment of the Special Event Prepayment Price, on and after the
prepayment date interest ceases to accrue on the Junior Subordinated Debt
Securities.
ADDITIONAL SUMS
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debt Securities such amounts as
shall be required so that the Distributions payable by the Trust shall not be
reduced as a result of any such additional taxes, duties or other governmental
charges. The Corporation has covenanted in the Indenture that, if and so long as
(i) the Trust is the holder of all Junior Subordinated Debt Securities and (ii)
a Tax Event in respect of the Trust has occurred and is continuing, the
Corporation will pay Additional Sums (as defined under "Description of Capital
Securities -- Mandatory Redemption") to the Trust.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will also covenant that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Corporation (including Other Debentures) that rank pari passu
with or junior in interest to the Junior Subordinated Debt Securities or (iii)
make any guarantee payments with respect to any guarantee by the Corporation of
the debt securities of any subsidiary of the Corporation (including under Other
Guarantees) if such guarantee ranks pari passu with or junior in interest to the
Junior Subordinated Debt Securities (other than (a) dividends or distributions
in common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) purchases or acquisitions of shares of the Corporation's common
stock in connection with the satisfaction by the Corporation of its obligations
under any employee benefit plan or any other contractual obligation of the
Corporation (other than a contractual obligation ranking pari passu with or
junior in interest to the Junior Subordinated Debt Securities), (e) as a result
of a reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock or (f) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged), if at such time (i) there shall have occurred a
Debenture Event of Default, (ii) the Corporation shall be in default with
respect to its payment of any obligations under the Guarantee or (iii) the
Corporation shall have given notice of its election of an Extension Period as
provided in the Indenture and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of Junior Subordinated Debt Securities, amend, waive
or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of
Junior Subordinated Debt Securities or the holders of the Capital Securities so
long as they remain outstanding) and
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<PAGE> 55
maintaining the qualification of the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Corporation and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of Junior Subordinated Debt Securities, to modify the Indenture
in a manner affecting the rights of the holders of Junior Subordinated Debt
Securities; provided, however, that no such modification may, without the
consent of the holder of each outstanding Junior Subordinated Debt Security so
affected, (i) change the Stated Maturity, or reduce the principal amount of the
Junior Subordinated Debt Securities, or reduce the rate or extend the time of
payment of interest thereon or (ii) reduce the percentage of principal amount of
Junior Subordinated Debt Securities, the holders of which are required to
consent to any such modification of the Indenture.
In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of Junior Subordinated Debt Securities, any
supplemental Indenture for the purpose of creating any Other Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debt Securities that has occurred
and is continuing constitutes a "Debenture Event of Default":
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debt Securities when due (subject to the deferral of any due date in the
case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debt Securities when due, whether at maturity, upon
redemption, by declaration of acceleration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Corporation from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of the Junior Subordinated
Debt Securities; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation; or
(v) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of the
Junior Subordinated Debt Securities to the holder of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities of
the Trust, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debt Securities may
declare the principal due and payable immediately upon a Debenture Event of
Default and, should the Debenture Trustee or such holders of Junior Subordinated
Debt Securities fail to make such declaration, the holders of at least 25% in
aggregate Liquidation Amount of the Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities may annul such declaration and waive the
default if the default (other than the non-payment of the principal of the
Junior Subordinated Debt Securities which has become due solely by such
acceleration) has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee. Should the holders of Junior
Subordinated Debt Securities fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities affected thereby may, on behalf of the
holders of all the Junior Subordinated Debt Securities, waive any past default,
except a default in the payment of principal of (or premium, if any) or interest
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and
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<PAGE> 56
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Junior Subordinated Debt Security. Should the holders
of such Junior Subordinated Debt Securities fail to annul such declaration and
waive such default, the holders of a majority in aggregate Liquidation Amount of
the Capital Securities shall have such right. The Corporation is required to
file annually with the Debenture Trustee a certificate as to whether or not the
Corporation is in compliance with all the conditions and covenants applicable to
it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Junior Subordinated Debt Securities, and any other amounts
payable under the Indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Junior Subordinated Debt
Securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on the Junior Subordinated Debt Securities on the date such interest
or principal is otherwise payable, a holder of Capital Securities may institute
a Direct Action. The Corporation may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Capital Securities. Notwithstanding any payments made
to a holder of Capital Securities by the Corporation in connection with a Direct
Action, the Corporation shall remain obligated to pay the principal of or
interest on the Junior Subordinated Debt Securities, and the Corporation shall
be subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Capital Securities to the extent of any payments made
by the Corporation to such holder in any Direct Action.
The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the Junior Subordinated Debt Securities unless there shall
have been an Event of Default under the Declaration. See "Description of Capital
Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge with or into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge with or into the Corporation or convey, transfer or
lease its properties and assets substantially as an entirety to the Corporation,
unless (i) in case the Corporation consolidates with or merges with or into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any state or the District of Columbia, and such
successor Person expressly assumes the Corporation's obligations on the Junior
Subordinated Debt Securities issued under the Indenture; (ii) immediately after
giving effect thereto, no Debenture Event of Default, and no event which, after
notice or lapse of time or both, would become a Debenture Event of Default,
shall have occurred and be continuing; (iii) such transaction is permitted under
the Declaration and the Guarantee and does not give rise to any breach or
violation of the Declaration or the Guarantee; and (iv) certain other conditions
as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debt Securities protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders of
the Junior Subordinated Debt Securities.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any Junior
Subordinated Debt Securities issued thereunder shall be subordinate and junior
in right of payment to all Senior Debt to the
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extent provided in the Indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Corporation, the holders of Senior
Debt will first be entitled to receive payment in full of principal of (and
premium, if any) and interest, if any, on such Senior Debt before the holders of
Junior Subordinated Debt Securities will be entitled to receive or retain any
payment or distribution in respect thereof; provided, however, that holders of
Senior Debt shall not be entitled to receive payment of any such amounts to the
extent that such holders would be required by the subordination provisions of
such Senior Debt to pay such amounts over to the obligees on trade accounts
payable or other liabilities arising in the ordinary course of business.
In the event of the acceleration of the maturity of the Junior Subordinated
Debt Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders of
the Junior Subordinated Debt Securities will be entitled to receive or retain
any payment in respect of the principal of (or premium, if any) or interest, if
any, on the Junior Subordinated Debt Securities; provided, however, that holders
of Senior Debt shall not be entitled to receive payment of any such amounts to
the extent that such holders would be required by the subordination provisions
of such Senior Debt to pay such amounts over to the obligees on trade accounts
payable or other liabilities arising in the ordinary course of business.
In the event that the Corporation shall default in the payment of any
principal of (or premium, if any), or interest, if any, on any Senior Debt when
the same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration of acceleration or otherwise, then, unless and
until such default shall have been cured or waived or shall have ceased to exist
or all Senior Debt shall have been paid, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) shall be made or agreed to be
made for principal, premium, if any, or interest, if any, on the Junior
Subordinated Debt Securities, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the Junior Subordinated Debt
Securities.
"Debt" means (i) the principal of (and premium, if any), and unpaid
interest on indebtedness for money borrowed, (ii) purchase money and similar
obligations, (iii) obligations under capital leases, (iv) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Corporation is responsible for the payment of such
indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings and
(vii) obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts and
similar arrangements; provided, however, that Debt shall not include trade
accounts payable or accrued liabilities in the ordinary course of business.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt of the
Corporation, whether incurred on or prior to the date of the Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Junior Subordinated Debt
Securities or the Other Debentures; provided, however, that Senior Debt shall
not be deemed to include (i) any Debt of the Corporation which, when incurred
and without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, as amended, was without recourse to the Corporation,
(ii) any Debt of the Corporation to any of its subsidiaries, including the
junior subordinated debentures issued to North Fork Capital Trust I, (iii) Debt
to any employee of the Corporation, (iv) Debt which by its terms is subordinated
to trade accounts payable or accrued liabilities arising in the ordinary course
of business to the extent that payments made to the holders of such Debt by the
holders of the Junior Subordinated Debt Securities as a result of the
subordination provisions of the Indenture would be greater
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than such payments otherwise would have been as a result of any obligation of
such holders of such debt to pay amounts over to the obligees on such trade
accounts payable or accrued liabilities arising in the ordinary course of
business as a result of subordination provisions to which such Debt is subject,
and (v) any other debt securities issued pursuant to the Indenture.
The Indenture places no limitation on the amount of Senior Debt that may be
incurred by the Corporation. The Corporation expects from time to time to incur
additional indebtedness constituting Senior Debt. At September 30, 1997, the
aggregate outstanding Senior Debt was approximately $25 million.
GOVERNING LAW
The Indenture and the Junior Subordinated Debt Securities will be governed
by and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee is subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to such provisions, the Debenture Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
holder of Junior Subordinated Debt Securities, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Debenture Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance of
its duties if the Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
DESCRIPTION OF GUARANTEE
The Guarantee will be executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Capital Securities for the
benefit of the holders from time to time of such Capital Securities. Bankers
Trust Company will act as trustee (the "Guarantee Trustee") under the Guarantee
Agreement. The Guarantee Agreement will be qualified under the Trust Indenture
Act. This summary of certain provisions of the Guarantee does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
of the provisions of the Guarantee, including the definitions therein of certain
terms, and the Trust Indenture Act. The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Capital Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
herein) to the holders of the Capital Securities, as and when due, regardless of
any defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Capital Securities, to the extent not paid by or on behalf of the Trust (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accrued and
unpaid Distributions required to be paid on the Capital Securities, to the
extent that the Trust has funds on hand available therefor at such time, (ii)
the applicable Redemption Price with respect to Capital Securities called for
redemption, to the extent that the Trust has funds on hand available therefor at
such time, or (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of the Trust (other than in connection with the distribution of
Junior Subordinated Debt Securities to the holders of the Capital Securities or
the redemption of all of the Capital Securities) the lesser of (a) the
Liquidation Distribution, to the extent the Trust has funds available therefor
and (b) the amount of assets of the Trust remaining available for distribution
to holders of the Capital Securities upon liquidation of the Trust after
satisfaction of liabilities to creditors of the Trust as required by applicable
law. The Corporation's obligation to make a Guarantee Payment may be satisfied
by direct payment of the
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required amounts by the Corporation to the holders of the Capital Securities or
by causing the Trust to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Trust's obligations under the Capital Securities, although it will apply
only to the extent that the Trust has funds sufficient to make such payments,
and is not a guarantee of collection. If the Corporation does not make interest
payments on the Junior Subordinated Debt Securities held by the Trust, the Trust
will not be able to pay Distributions on the Capital Securities and will not
have funds legally available therefor.
The Guarantee will rank subordinate and junior in right of payment to all
Senior Debt. See "-- Status of the Guarantee." Because the Corporation is a
holding company, the right of the Corporation to participate in any distribution
of assets of any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of such
subsidiary, except to the extent the Corporation may itself be recognized as a
creditor of that subsidiary. Accordingly, the Corporation's obligations under
the Guarantee will be effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, including deposits, and claimants
should look only to the assets of the Corporation for payments thereunder. See
"North Fork." The Guarantee does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt, whether
under the Indenture, any other indenture that the Corporation may enter into in
the future or otherwise.
The Corporation has, through the Guarantee, the Declaration, the Junior
Subordinated Debt Securities and the Indenture, taken together, fully,
irrevocably and unconditionally guaranteed all of the Trust's obligations under
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debt Securities and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior Debt in
the same manner as Junior Subordinated Debt Securities.
The Guarantee will rank pari passu with all Other Guarantees issued by the
Corporation. The Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee will be held for the benefit of the holders of the Capital Securities.
The Guarantee will not be discharged except by payment of the Guarantee Payments
in full to the extent not paid by the Trust or upon distribution to the holders
of the Capital Securities of the Junior Subordinated Debt Securities. The
Guarantee does not place a limitation on the amount of additional Senior Debt
that may be incurred by the Corporation. The Corporation expects from time to
time to incur additional indebtedness constituting Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of such
outstanding Capital Securities. The manner of obtaining any such approval will
be as set forth under "Description of Capital Securities -- Voting Rights;
Amendment of the Declaration." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the holders
of the Capital Securities then outstanding.
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EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder;
provided, however, that except with respect to a default in payment of any
Guarantee Payment, the Corporation shall have received notice of default and
shall not have cured such default within 60 days after receipt of such notice.
The holders of not less than a majority in aggregate Liquidation Amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Guarantee provides that the Corporation shall not consolidate with or
merge with or into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge with or into the Corporation or convey, transfer or
lease its properties and assets substantially as an entirety to the Corporation,
unless (i) in case the Corporation consolidates with or merges with or into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any state or the District of Columbia and such successor
Person expressly assumes the Corporation's obligations on the Guarantee; (ii)
immediately after giving effect thereto, no event of default under the
Guarantee, and no event which, after notice or lapse of time or both, would
become an event of default under the Guarantee, shall have happened and be
continuing; (iii) such transaction is permitted under the Declaration and the
Indenture and does not give rise to any breach or violation of the Declaration
or the Indenture; and (iv) certain other conditions as prescribed in the
Guarantee are met.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of the Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of the Capital Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Capital Securities, upon
full payment of the amounts payable upon liquidation of the Trust or upon
distribution of Junior Subordinated Debt Securities to the holders of the
Capital Securities. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the Capital
Securities must restore payment of any sums paid under the Capital Securities or
the Guarantee.
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GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of Guarantee." Taken together, the
Corporation's obligations under the Junior Subordinated Debt Securities, the
Indenture, the Declaration and the Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Capital Securities. If and to the extent that the Corporation
does not make payments on the Junior Subordinated Debt Securities, the Trust
will not pay Distributions or other amounts due on the Capital Securities. The
Guarantee does not cover payment of Distributions when the Trust does not have
sufficient funds to pay such Distributions. In such event, the remedy of a
holder of Capital Securities is to institute a Direct Action. The obligations of
the Corporation under the Guarantee are subordinate and junior in right of
payment to all Senior Debt.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debt Securities, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debt Securities will be equal to the sum of the aggregate
Liquidation Amount or Redemption Price, as applicable, of the Trust Securities;
(ii) the interest rate and interest and other payment dates on the Junior
Subordinated Debt Securities will match the Distribution rate and Distribution
and other payment dates for the Capital Securities; (iii) the Corporation shall
pay for all costs, expenses and liabilities of the Trust except the Trust's
obligations to holders of Trust Securities under such Trust Securities; and (iv)
the Declaration further provides that the Trust will not engage in any activity
that is not consistent with the limited purposes thereof.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity.
A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Declaration. However, in the event of
payment defaults under, or acceleration of, Senior Debt, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Junior Subordinated Debt Securities until such Senior Debt has been paid in
full or any payment default thereunder has been cured or waived. Failure to make
required payments on Junior Subordinated Debt Securities would constitute an
Event of Default under the Declaration.
LIMITED PURPOSE OF THE TRUST
The Capital Securities evidence a beneficial interest in the Trust, and the
Trust exists for the sole purpose of issuing the Capital Securities and Common
Securities, investing the proceeds of the Trust Securities in Junior
Subordinated Debt Securities and engaging in other activities necessary or
incidental thereto.
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RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Trust involving the liquidation of the Junior Subordinated Debt Securities,
after satisfaction of the liabilities of creditors of the Trust as required by
applicable law, the holders of the Trust Securities will be entitled to receive,
out of assets held by the Trust, the Liquidation Distribution in cash. See
"Description of Capital Securities -- Liquidation of the Trust and Distribution
of Junior Subordinated Debt Securities." Upon any voluntary or involuntary
liquidation or bankruptcy of the Corporation, the Property Trustee, as holder of
the Junior Subordinated Debt Securities, would be a subordinated creditor of the
Corporation, subordinated in right of payment to all Senior Debt as set forth in
the Indenture, but entitled to receive payment in full of principal and
interest, before any stockholders of the Corporation receive payments or
distributions. Since the Corporation is the guarantor under the Guarantee and
has agreed to pay for all costs, expenses and liabilities of the Trust (other
than the Trust's obligations to the holders of its Trust Securities), the
positions of a holder of Capital Securities and a holder of Junior Subordinated
Debt Securities relative to other creditors and to stockholders of the
Corporation in the event of liquidation or bankruptcy of the Corporation are
expected to be substantially the same.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special federal
income tax counsel to the Corporation and the Trust ("Special Tax Counsel"), the
following is a summary of certain of the material United States federal income
tax consequences of the purchase, ownership and disposition of Capital
Securities held as capital assets by a holder who purchases such Capital
Securities upon initial issuance. Unless otherwise indicated, this summary deals
only with a holder who is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or an estate or
trust as defined in section 7701(a) (30) of the Internal Revenue Code of 1986,
as amended (the "Code") (a "United States Holder"). It does not deal with
special classes of holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, or persons that will hold the
Capital Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not address
the tax consequences to persons that have a functional currency other than the
U.S. dollar or the tax consequences to shareholders, partners or beneficiaries
of a holder of Capital Securities. Further, it does not include any description
of any alternative minimum tax consequences or the tax laws of any state or
local government or of any foreign government that may be applicable to the
Capital Securities. This summary is based on the Code, Treasury regulations
thereunder and the administrative and judicial interpretations thereof, as of
the date hereof, all of which are subject to change, possibly on a retroactive
basis. An opinion of Special Tax Counsel is not binding on the Internal Revenue
Service ("IRS") or the courts. No rulings have been or are expected to be sought
from the IRS with respect to any of the transactions described herein and no
assurance can be given that the IRS will not take contrary positions. Moreover,
no assurance can be given that the opinions expressed herein will not be
challenged by the IRS or, if challenged, that such a challenge would not be
successful.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
In connection with the issuance of the Junior Subordinated Debt Securities,
Special Tax Counsel will render its opinion generally to the effect that, under
then current law and assuming full compliance with the terms of the Indenture
(and certain other documents), and based on certain facts and assumptions
contained in such opinion, the Junior Subordinated Debt Securities will be
classified for United States federal income tax purposes as indebtedness of the
Corporation. The Corporation, the Trust and the holders of the Capital
Securities (by acceptance of a beneficial interest in a Capital Security) will
agree to treat the Junior Subordinated Debt Securities as indebtedness of the
Corporation for all United States federal income tax purposes.
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CLASSIFICATION OF THE TRUST
In connection with the issuance of the Capital Securities, Special Tax
Counsel will render its opinion generally to the effect that, under then current
law and assuming full compliance with the terms of the Declaration of Trust and
the Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States federal income tax
purposes, each holder of Capital Securities generally will be considered the
owner of an undivided interest in the Junior Subordinated Debt Securities, and
each holder will be required to include in its gross income any interest (or OID
accrued) with respect to its allocable share of those Junior Subordinated Debt
Securities.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under applicable Treasury regulations (the "Regulations"), a "remote"
contingency that stated interest will not be timely paid will be ignored in
determining whether a debt instrument is issued with OID. The Corporation
believes that the likelihood of its exercising its option to defer payments of
interest is "remote" since exercising that option would, among other things,
prevent the Corporation from declaring dividends on any class of its equity
securities. Accordingly, the Corporation intends to take the position based on
the advice of Special Tax Counsel that the Junior Subordinated Debt Securities
will not be considered to be issued with OID and, accordingly, stated interest
on the Junior Subordinated Debt Securities generally will be taxable to a holder
as ordinary income at the time it is paid or accrued in accordance with such
holder's method of tax accounting.
Under the Regulations, if the Corporation were to exercise its option to
defer payments of interest, the Junior Subordinated Debt Securities would at
that time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debt Securities would thereafter be treated as OID as long as the
Junior Subordinated Debt Securities remain outstanding. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated Debt
Securities would thereafter be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income. Consequently, a
holder of Capital Securities would be required to include in gross income OID
even though the Corporation would not make actual cash payments during an
Extension Period. Moreover, under the Regulations, if the option to defer the
payment of interest was determined not to be "remote," within the meaning of the
Regulations, the Junior Subordinated Debt Securities would be treated as having
been originally issued with OID. In such event, all of a holder's taxable
interest income with respect to the Junior Subordinated Debt Securities would be
accounted for on an economic accrual basis regardless of such holders method of
tax accounting, and actual distributions of stated interest would not be
reported as taxable income. In each case the amount of OID that will accrue in
any month will approximately equal the amount of interest accruing at the stated
interest rate.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation described herein and assert that the
Junior Subordinated Debt Securities were originally issued with OID.
Because income on the Capital Securities will constitute interest or OID,
corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF THE
TRUST
The Corporation will have the right at any time to liquidate the Trust and
cause the Junior Subordinated Debt Securities to be distributed to the holders
of the Trust Securities. Under current law, such a distribution, for United
States federal income tax purposes, would be treated as a nontaxable event to
each holder, and each holder would receive an aggregate tax basis in the Junior
Subordinated Debt Securities equal to such holder's aggregate tax basis in its
Capital Securities. A holder's holding
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period in the Junior Subordinated Debt Securities so received in liquidation of
the Trust would include the period during which the Capital Securities were held
by such holder.
Under certain circumstances described herein (see "Description of Capital
Securities"), the Junior Subordinated Debt Securities may be redeemed for cash
and the proceeds of such redemption distributed to holders in redemption of
their Capital Securities. Under current law, such a redemption would, for United
States federal income tax purposes, constitute a taxable disposition of the
redeemed Capital Securities, and a holder could recognize gain or loss as if it
sold such redeemed Capital Securities for cash. See "-- Sales of Capital
Securities."
SALES OF CAPITAL SECURITIES
A holder that sells Capital Securities (including a redemption of the
Capital Securities by the Corporation for cash) will recognize gain or loss
equal to the difference between its adjusted tax basis in the Capital Securities
and the amount realized on the sale of such Capital Securities (other than with
respect to accrued and unpaid interest which has not yet been included in
income, which will be treated as ordinary income). A holder's adjusted tax basis
in the Capital Securities generally will be its initial purchase price increased
by OID (if any) previously includable in such holder's gross income to the date
of disposition and decreased by payments (if any) received on the Capital
Securities in respect of OID. Such gain or loss generally will be a capital gain
or loss and generally will be a long-term capital gain or loss if the Capital
Securities have been held for more than one year. A holder of Capital Securities
that is an individual may be entitled to a preferential tax rate for long-term
capital gains and a lower rate for long-term capital gains with respect to
Capital Securities held for more than 18 months.
The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debt Securities. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debt Securities are deemed to have been issued with OID) who
disposes of his Capital Securities between record dates for payments of
distribution thereon will be required to include accrued but unpaid interest on
the Junior Subordinated Debt Securities through the date of disposition in
income as ordinary income (i.e., interest or, if applicable, OID), and to add
such amount to his adjusted tax basis in his pro rata share of the underlying
Junior Subordinated Debt Securities deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include
all accrued but unpaid interest) a holder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
NON-UNITED STATES HOLDERS
As used herein, the term "Non-United States Holder" means any holder that
is not a United States Holder. As discussed above, the Capital Securities will
be treated as evidence of an indirect beneficial ownership interest in the
Junior Subordinated Debt Securities. See "-- Classification of the Trust." Thus
under present United States federal income tax law, and subject to the
discussion below concerning backup withholding:
(a) no withholding of United States federal income tax will be required
with respect to the payment by the Corporation or any paying agent of principal
or interest (which for purposes of this discussion includes any OID) on the
Junior Subordinated Debt Securities to a Non-United States Holder, provided (i)
that the beneficial owner of the Capital Securities ("Beneficial Owner") does
not actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Corporation entitled to vote within the
meaning of section 871(h)(3) of the Code and the regulations thereunder, (ii)
the Beneficial Owner is not a controlled foreign corporation that is related to
the Corporation through stock ownership, (iii) the Beneficial Owner is not a
bank whose receipt of interest on the Junior Subordinated Debt Securities is
described in section 881(c)(3)(A) of the Code, and (iv) the Beneficial Owner
satisfies the statement requirement (described generally below) set forth in
section 871(h) and section 881(c) of the Code and the regulations thereunder;
and
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(b) no withholding of United States federal income tax will be required
with respect to any gain realized by a Non-United States Holder upon the sale or
other disposition of the Capital Securities.
To satisfy the requirement referred to in (a)(iv) above, the Beneficial
Owner, or a financial institution holding the Capital Securities on behalf of
such owner, must provide, in accordance with specified procedures, to the Trust
or its paying agent, a statement to the effect that the Beneficial Owner is not
a United States Holder. Pursuant to current temporary Treasury regulations,
these requirements will be met if (1) the Beneficial Owner provides his name and
address, and certifies, under penalties of perjury, that it is not a United
States person (which certification may be made on an IRS Form W-8 (or successor
form)) or (2) a financial institution holding the Capital Securities on behalf
of the Beneficial Owner certifies, under penalties of perjury, that such
statement has been received by it and furnishes a paying agent with a copy
thereof.
If a Non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described in (a) above, payments of interest made
to such Non-United States Holder will be subject to a 30% withholding tax unless
the Beneficial Owner provides the Corporation or its paying agent, as the case
may be, with a properly executed (1) IRS Form 1001 (or successor form) claiming
an exemption from, or a reduction of, such withholding tax under the benefit of
a tax treaty or (2) IRS Form 4224 (or successor form) stating that interest paid
on the Junior Subordinated Debt Securities is not subject to withholding tax
because it is effectively connected with the Beneficial Owner's conduct of a
trade or business in the United States.
If a Non-United States Holder is engaged in a trade or business in the
United States and interest on the Junior Subordinated Debt Securities is
effectively connected with the conduct of such trade or business, the Non-United
States Holder, although exempt from the withholding tax discussed above, will be
subject to United States federal income tax on such interest on a net income
basis in the same manner as if it were a United States Holder. In addition, if
such Non-United States Holder is a foreign corporation, it may be subject to a
branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to adjustments. For this purpose, such
interest income would be included in such foreign corporation's earnings and
profits.
Any gain realized upon the sale or other disposition of the Capital
Securities generally will not be subject to United States federal income tax
unless (i) such gain is effectively connected with a trade or business in the
United States of the Non-United States Holder, (ii) in the case of a Non-United
States Holder who is an individual, such individual is present in the United
States for 183 days or more in the taxable year of such sale, exchange or
retirement, and certain other conditions are met, or (iii) in the case of any
gain representing accrued interest on the Junior Subordinated Debt Securities,
the requirements described above are not satisfied.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
"Backup withholding" at a rate of 31% will apply to payments of interest to
non-exempt United States Holders unless the holder furnishes its taxpayer
identification number in the manner prescribed in applicable Treasury
regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions. No
information reporting or backup withholding will be required with respect to
payments made by the Trust or any paying agent to Non-United States Holders if a
statement described in (a)(iv) under "Non-United States Holders" has been
received and the payor does not have actual knowledge that the beneficial owner
is a United States person. Recently adopted Treasury regulations may effect the
application of such backup withholding rules for payments made to Non-United
States Holders after January 1, 1998. Non-United States Holders should consult
their tax advisers about the effects, if any, of such regulations.
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<PAGE> 66
In addition, backup withholding and information reporting will not apply if
payments of the principal, interest, OID (if any) or premium on the Junior
Subordinated Debt Securities are paid or collected by a foreign office of a
custodian, nominee or other foreign agent on behalf of the Beneficial Owner, or
if a foreign office of a broker (as defined in applicable Treasury regulations)
pays the proceeds of the sale of the Capital Securities to the owner thereof.
If, however, such nominee, custodian, agent or broker is, for United States
federal income tax purposes, a United States person, a controlled foreign
corporation or a foreign person that derives 50% or more of its gross income for
certain periods from the conduct of a trade or business in the United States,
such payments will not be subject to backup withholding but will be subject to
information reporting, unless (1) such custodian, nominee, agent or broker has
documentary evidence in its records that the Beneficial Owner is not a United
States person and certain other conditions are met or (2) the Beneficial Owner
otherwise establishes an exemption.
Payment of the proceeds from disposition of Capital Securities to or
through a United States office of a broker is subject to information reporting
and backup withholding unless the holder or Beneficial Owner establishes an
exemption from information reporting and backup withholding.
Any amounts withheld from a holder of the Capital Securities under the
backup withholding rules will be allowed as a refund or a credit against such
holder's United States federal income tax liability, provided the required
information is furnished to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
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<PAGE> 67
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement") among the Corporation, the Trust and Salomon
Brothers Inc, Keefe, Bruyette & Woods, Inc. and Sandler O'Neill & Partners, L.P.
(the "Underwriters"), the Corporation and the Trust have agreed that the Trust
will sell to the Underwriters, and the Underwriters have severally agreed to
purchase from the Trust, the liquidation amount of Capital Securities set forth
opposite its name below.
<TABLE>
<CAPTION>
LIQUIDATION AMOUNT OF
UNDERWRITERS CAPITAL SECURITIES
- ------------------------------------------------------------------------ ----------------------
<S> <C>
Salomon Brothers Inc ................................................... $ 80,000,000
Keefe, Bruyette & Woods, Inc. .......................................... 10,000,000
Sandler O'Neill & Partners, L.P. ....................................... 10,000,000
----------------------
Total......................................................... $100,000,000
==================
</TABLE>
The Underwriters propose to offer the Capital Securities in part directly
to the public at the initial public offering price, as set forth on the cover
page of this Prospectus Supplement, and in part to certain securities dealers at
such price less a concession not in excess of $6.00 per Capital Security. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of $2.50 per Capital Security to certain brokers and dealers. After the Capital
Securities are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Underwriters.
In view of the fact that the proceeds of the sale of the Capital Securities
will be used to purchase the Junior Subordinated Debt Securities of the
Corporation, the Underwriting Agreement provides that the Corporation will agree
to pay as compensation to the Underwriters arranging the investment therein of
such proceeds, an amount in same day funds of $10.00 per Capital Security (or
$1,000,000 in the aggregate).
Because the National Association of Securities Dealers, Inc. ("NASD") is
expected to view the Capital Securities offered hereby as interests in a direct
participation program, the offering is being made in compliance with Rule 2810
of the NASD's Conduct Rules. Offers and sales of Capital Securities will be made
only to (i) "qualified institutional buyers", as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act"); (ii) institutional "accredited
investors", as defined in Rule 501(a)(1)-(0) of Regulation D under the Act or
(iii) individual "accredited investors", as defined in Rule 501(a)(4)-(6) of
Regulation D under the Act, for whom an investment in non-convertible capital
securities rated similarly to the Capital Securities is appropriate. The
Underwriters may not confirm sales to any accounts over which they exercise
discretionary authority without the prior written approval of the transaction by
the customer.
During a period of 10 days from the date of this Prospectus Supplement,
neither the Trust not the Company will, without the prior written consent of the
Underwriters, directly or indirectly, sell, contract to sell, grant any option
for the sale of, or otherwise dispose of, or enter into any agreement or
announce the intention to do any of the foregoing with respect to, any Capital
Securities, any securities convertible into or exchangeable or exercisable for
Capital Securities or the Junior Subordinated Debt Securities or any debt
securities similar to the Junior Subordinated Debt Securities or any securities
substantially similar to the Capital Securities (except for the Junior
Subordinated Debt Securities and the Capital Securities offered hereby).
Prior to this offering, there has been no public market for the Capital
Securities. The Underwriters may make a market in the Capital Securities, but
the Underwriters are not obligated to do so and may discontinue market-making at
any time without notice. No assurance can be given as to the liquidity of the
trading market in the Capital Securities.
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<PAGE> 68
The Corporation and the Trust have agreed to indemnify the Underwriters
against, or contribute to payments that the Underwriters may be required to make
in respect of, certain liabilities, including liabilities under the Securities
Act.
The Underwriters engage in transactions with, and, from time to time, have
performed services for, the Corporation and it subsidiaries, in the ordinary
course of business.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Securities Exchange Act of 1934, as amended. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short
position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specific maximum.
Syndicate covering transactions involve purchases of Capital Securities in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim a
selling concession from a syndicate member when Capital Securities originally
sold by such syndicate member are purchased in a syndicate covering transaction
to cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Capital
Securities to be higher than it would otherwise be in the absence of such
transactions.
VALIDITY OF SECURITIES
Certain matters relating to the validity of the Capital Securities, the
Junior Subordinated Debt Securities and the Guarantee, the enforceability of the
Declaration and the formation of the Trust and certain matters relating thereto
will be passed upon on behalf of the Corporation and North Fork Capital Trust II
by Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Corporation and
North Fork Capital Trust II. The validity of the Guarantee and the Junior
Subordinated Debt Securities will be passed upon for the Underwriters by
Cravath, Swaine & Moore, New York, New York. Cravath, Swaine & Moore will rely
on the opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to matters of
Delaware law. Certain United States federal income tax matters will be passed
upon for the Corporation and North Fork Capital Trust II by Skadden, Arps,
Slate, Meagher & Flom LLP, special tax counsel to the Corporation and North Fork
Capital Trust II.
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<PAGE> 69
PROSPECTUS
NORTH FORK CAPITAL TRUST II
NORTH FORK CAPITAL TRUST III
CAPITAL SECURITIES
NORTH FORK BANCORPORATION, INC.
JUNIOR SUBORDINATED DEBT SECURITIES
------------------------
North Fork Capital Trust II and North Fork Capital Trust III (each a "North
Fork Capital Trust"), each a statutory business trust formed under the laws of
the State of Delaware, may offer, from time to time, Capital Securities,
representing undivided beneficial interests in the assets of the respective
North Fork Capital Trusts ("Capital Securities"). The payment of distributions
with respect to Capital Securities of each of the North Fork Capital Trusts out
of moneys held by each of the North Fork Capital Trusts, and payment on
liquidation, redemption or otherwise with respect to such Capital Securities,
will be guaranteed by North Fork Bancorporation, Inc., a Delaware corporation
("North Fork" or the "Corporation"), to the extent described herein (each a
"Guarantee"). See "Description of the Guarantees" below. The Corporation's
obligations under the Guarantees will be subordinate and junior in right of
payment to all other liabilities of the Corporation, if any, issued from time to
time by the Corporation. Junior Subordinated Debt Securities (as defined below)
may be issued and sold by the Corporation from time to time in one or more
series to a North Fork Capital Trust, or a trustee of such North Fork Capital
Trust, in connection with the investment of the proceeds from the offering of
Capital Securities and Common Securities (as defined herein) of such North Fork
Capital Trust. The Junior Subordinated Debt Securities purchased by a North Fork
Capital Trust may be subsequently distributed pro rata to holders of Capital
Securities and Common Securities in connection with the dissolution of such
North Fork Capital Trust upon the occurrence of certain events as may be
described in an accompanying Prospectus Supplement.
(Continued on next page)
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Offered Securities may be offered directly, through agents designated
from time to time, to or through underwriters or dealers or through a
combination of such methods. See "Plan of Distribution." If any agents of the
Corporation, any North Fork Capital Trust or any underwriters are involved in
the sale of the Offered Securities, the names of such agents or underwriters and
any applicable commissions or discounts will be set forth in the Prospectus
Supplement with respect to such Offered Securities. The net proceeds to the
Corporation from such sale also will be set forth in the applicable Prospectus
Supplement.
------------------------
The date of this Prospectus is November 21, 1997.
<PAGE> 70
(Continued from front cover)
The Junior Subordinated Debt Securities, the Capital Securities and the
related Guarantees are collectively referred to as the "Offered Securities." The
Capital Securities and Common Securities are collectively referred to as the
"Trust Securities."
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered, such as, where applicable, (i) in the case of
Junior Subordinated Debt Securities, the specific designation, aggregate
principal amount, currency, denomination, maturity, priority, interest rate
(which may be variable or fixed), time of payment of interest, terms of
redemption at the option of the Corporation or repayment at the option of the
holder or any provisions for sinking fund payments, the designation of the
Trustee (as defined in the applicable Indenture or Supplemental Indenture)
acting under the applicable Indenture or Supplemental Indenture and the initial
public offering price and (ii) in the case of Capital Securities or the related
Guarantees, the specific designation, aggregate offering amount, denomination,
term, coupon rate, time of payment of distributions, terms of redemption at the
option of the Corporation or repayment at the option of the holder, the
designation of the Trustee acting under the applicable Indenture, Supplemental
Indenture (as defined herein) or Guarantee and the initial public offering
price, will be set forth in the accompanying Prospectus Supplement.
The Offered Securities will be issued only in registered form, including in
the form of Global Securities, unless otherwise set forth in the Prospectus
Supplement.
------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT OR THE DOCUMENTS INCORPORATED OR DEEMED INCORPORATED BY
REFERENCE HEREIN, AND ANY INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN OR
THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR
BY ANY AGENT, DEALER OR UNDERWRITER. THIS PROSPECTUS AND ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT NOR ANY SALE OF OR OFFER TO SELL THE OFFERED SECURITIES
OFFERED HEREBY SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION SINCE THE RESPECTIVE DATES
OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT OR THAT THE INFORMATION IN THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE RESPECTIVE DATES OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT.
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<PAGE> 71
AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Corporation and the North Fork Capital Trusts with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Offered
Securities. This Prospectus and any accompanying Prospectus Supplement do not
contain all of the information set forth in such Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statement and to the exhibits
relating thereto for further information with respect to the Corporation, the
North Fork Capital Trusts, and the Offered Securities. Any statements contained
herein concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission or incorporated by
reference herein are not necessarily complete, and, in each instance, reference
is made to the copy of such document so filed for a more complete description of
the matter involved. Each such statement is qualified in its entirety by such
reference.
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Commission.
Such reports and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and the Commission's regional
offices at Suite 1300, Seven World Trade Center, New York, New York 10048, and
at The Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material also can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains a web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. Such reports, proxy and
information statements and other information may be found on the Commission's
web site address, http://www.sec.gov. In addition, certain securities of the
Corporation are listed on the New York Stock Exchange, Inc. (the "NYSE").
Material filed by the Corporation may be inspected at the offices of the NYSE at
20 Broad Street, New York, New York 10005.
No separate financial statements of the Trusts have been included herein.
The Corporation and the Trusts do not consider that such financial statements
would be material to holders of the Capital Securities because the Trusts are
newly formed special purpose entities, have no operating history or independent
operations and are not engaged in and do not propose to engage in any activity
other than holding as trust assets the Junior Subordinated Debt Securities and
issuing the Trust Securities. See "THE TRUSTS," "DESCRIPTION OF THE CAPITAL
SECURITIES," "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES" and
"DESCRIPTION OF THE GUARANTEES." In addition, the Corporation does not expect
that the Trusts will file reports under the Exchange Act with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed with the Commission by the
Corporation pursuant to the Exchange Act are hereby incorporated by reference:
(i) Annual Report on Form 10-K for the year ended December 31, 1996;
(ii) Current Reports on Form 8-K dated February 25, 1997, April 10,
1997, April 22, 1997, June 24, 1997, July 25, 1997, October 7, 1997,
October 15, 1997 and November 20, 1997.
(iii) Quarterly Reports on Form 10-Q for the three months ended March
31, 1997, June 30, 1997 and September 30, 1997.
(iv) The Joint Proxy Statement/Prospectus of the Corporation and
Branford Savings Bank ("Branford"), dated November 7, 1997, relating to the
Branford Merger (as defined herein) (the "Joint Proxy
Statement/Prospectus").
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<PAGE> 72
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date hereof and prior to the termination
of the offering of the securities offered hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the accompanying Prospectus Supplement to
the extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or the accompanying Prospectus Supplement.
The Corporation will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus and the accompanying Prospectus
Supplement is delivered, upon written or oral request of such person, a copy of
any and all documents incorporated herein by reference (not including exhibits
to such documents, unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to North Fork
Bancorporation, Inc., 275 Broad Hollow Road, Melville, New York 11747,
Attention: Anthony Abate, Secretary (telephone number: (516) 844-1004).
THIS PROSPECTUS AND THE PORTIONS OF THE JOINT PROXY STATEMENT/PROSPECTUS
INCORPORATED BY REFERENCE HEREIN CONTAINS CERTAIN FORWARD LOOKING STATEMENTS
WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF
NORTH FORK, INCLUDING STATEMENTS RELATING TO THE COST SAVINGS AND REVENUE
ENHANCEMENTS THAT ARE EXPECTED TO BE REALIZED FROM THE BRANFORD MERGER AND THE
NEW YORK BANCORP MERGER (EACH AS DEFINED HEREIN, AND TOGETHER, THE "MERGERS").
FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE
FOLLOWING POSSIBILITIES: (1) EXPECTED COST SAVINGS OR REVENUE ENHANCEMENTS FROM
THE MERGERS CANNOT BE FULLY REALIZED; (2) DEPOSIT ATTRITION, CUSTOMER LOSS OR
REVENUE LOSS FOLLOWING THE MERGERS IS GREATER THAN EXPECTED; (3) COMPETITIVE
PRESSURE IN THE BANKING AND FINANCIAL SERVICES INDUSTRY INCREASES SIGNIFICANTLY;
(4) CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE MARGINS; AND (5) GENERAL
ECONOMIC CONDITIONS, EITHER NATIONALLY OR IN THE STATE OF NEW YORK, ARE LESS
FAVORABLE THAN EXPECTED.
USE OF PROCEEDS
All of the proceeds from the sale of the Trust Securities will be invested
by the North Fork Capital Trusts in Junior Subordinated Debt Securities. The
Corporation intends to apply the net proceeds from the sale of the Junior
Subordinated Debt Securities to its general funds to be used by its management
for general corporate purposes.
THE TRUSTS
Each of North Fork Capital Trust II and North Fork Capital Trust III is a
statutory business trust formed under Delaware law pursuant to (i) a separate
declaration of Trust (each a "Declaration") executed by the Corporation, as
depositor for such trust (the "Depositor") and the North Fork Capital Trustees
(as defined herein) for such trust and (ii) the filing of a certificate of trust
with the Delaware Secretary of State on November 14, 1997. Each Declaration will
be qualified as an indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). The North Fork Capital Trusts exist for the
exclusive purposes of (i) issuing the Capital Securities and common securities
representing undivided beneficial interests in the assets of such Trust (the
"Common Securities"), (ii) investing the gross proceeds of the Trust Securities
in Junior Subordinated Debt Securities (as defined below) and
4
<PAGE> 73
(iii) engaging in only those other activities necessary or incidental thereto.
All of the Common Securities will be directly or indirectly owned by the
Corporation. The Common Securities will rank pari passu, and payments will be
made thereon pro rata, with the Capital Securities except that upon an event of
default under the applicable Declaration, the rights of the holders of the
Common Securities to payment in respect of distributions and payments upon
liquidation, redemption, and otherwise will be subordinated to the rights of the
holders of the Capital Securities. The Corporation will, directly or indirectly,
acquire Common Securities in an aggregate liquidation amount equal to 3% of the
total capital of each North Fork Capital Trust. Each North Fork Capital Trust's
business and affairs will be conducted by the trustees (the "North Fork Capital
Trustees") appointed by the Corporation, as the direct or indirect holder of all
the Common Securities. Except in certain limited circumstances the holder of the
Common Securities will be entitled to appoint, remove or replace any of, or
increase or reduce the number of, the North Fork Capital Trustees of a North
Fork Capital Trust. The duties and obligations of the North Fork Capital
Trustees shall be governed by the Declaration of such North Fork Capital Trust.
A majority of the North Fork Capital Trustees of each North Fork Capital Trust
will be persons who are employees or officers of or affiliated with the
Corporation (the "Administrative Trustees"). One North Fork Capital Trustee of
each North Fork Capital Trust will be a financial institution which will be
unaffiliated with the Company and which shall act as property trustee and as
indenture trustee for purposes of the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), pursuant to the terms set forth in a Prospectus
Supplement (the "Property Trustee"). In addition, unless the Property Trustee
maintains a principal place of business in the State of Delaware, and otherwise
meets the requirements of applicable law, one North Fork Capital Trustee of each
North Fork Capital Trust will have its principal place of business or reside in
the State of Delaware (the "Delaware Trustee"). The Corporation will pay all
fees and expenses related to the North Fork Capital Trusts and the offering of
Trust Securities, the payment of which will be guaranteed by the Corporation.
The office of the Delaware Trustee for each North Fork Capital Trust in the
State of Delaware is Bankers Trust (Delaware), 1011 Centre Road, Suite 200,
Wilmington, Delaware 19805-1266. The principal executive office of each North
Fork Capital Trust shall be c/o North Fork Bancorporation, Inc., 275 Broad
Hollow Road, Melville, New York 11747, Attention: Anthony Abate, Secretary
(telephone number: (516) 844-1004).
5
<PAGE> 74
NORTH FORK
North Fork, with its executive headquarters located in Melville, New York,
is a bank holding company organized under the laws of the State of Delaware in
1980 and registered under the Bank Holding Company Act of 1956, as amended.
North Fork's primary subsidiary, North Fork Bank, operates 80 retail banking
facilities throughout Suffolk and Nassau Counties on Long Island, New York, as
well as in the New York City boroughs of Manhattan, Queens and the Bronx and in
Westchester and Rockland Counties north of New York City. North Fork's proposed
acquisition of Branford Savings Bank (see below) represents North Fork's initial
acquisition outside the State of New York.
At September 30, 1997, North Fork had assets of $6.6 billion, deposits of
$4.5 billion and stockholders' equity of $538 million. The principal executive
offices of North Fork are located at 275 Broad Hollow Road, Melville, New York
11747 and its telephone number is (516) 844-1004.
On October 7, 1997, North Fork entered into an agreement and plan of merger
with New York Bancorp Inc. ("New York Bancorp") pursuant to which New York
Bancorp will be merged (the "New York Bancorp Merger") with and into North Fork.
As of September 30, 1997, New York Bancorp had assets of approximately $3.2
billion, deposits of approximately $1.7 billion and stockholders' equity of
approximately $169 million. New York Bancorp serves customers from its primary
subsidiary, Home Federal, which operates thirty-one full service branch offices
throughout Kings, Queens, Nassau, Westchester and Suffolk Counties of New York.
Immediately after the New York Bancorp Merger, Home Federal will be merged with
and into North Fork Bank. In connection with this transaction, North Fork will
issue 1.19 shares of North Fork Common Stock for each New York Bancorp share.
The New York Bancorp Merger is expected to be consummated in the first quarter
of 1998 and will be accounted for under the pooling of interests accounting
method.
On July 24, 1997, North Fork entered into an agreement and plan of merger
with Branford Savings Bank ("Branford"), a Connecticut-chartered savings bank,
pursuant to which Branford will be merged (the "Branford Merger") with and into
a wholly-owned subsidiary of North Fork. At September 30, 1997, Branford had
$183 million in total assets, $162 million in deposits, $18 million in
stockholders' equity and serves customers from five branches in the Connecticut
towns of Branford, North Branford and East Haven and surrounding communities in
New Haven County, Connecticut. The Branford Merger represented North Fork's
initial acquisition outside the State of New York. In connection with this
transaction, North Fork will issue approximately 1,283,674 shares of North Fork
Common Stock. The Branford Merger is expected to be consummated prior to
December 31, 1997 and will be accounted for under the purchase method of
accounting.
On December 31, 1996, North Fork completed a business combination with
North Side by merging North Side with and into North Fork Bank. At closing,
North Side had $1.6 billion in total assets, $1.2 billion in deposits, $124.4
million in capital and operated seventeen full service banking locations in the
New York City boroughs of the Bronx and Queens and Nassau and Suffolk Counties.
In March, 1996, North Fork Bank completed its purchase of the domestic
commercial banking business of Extebank, which at closing had approximately $387
million in assets and $348 million in deposits, for $47 million in cash.
Additionally, during March 1996, North Fork Bank completed its acquisition of
ten Long Island branches of First Nationwide Bank, and assumed $572 million in
customer deposit liabilities, for which it paid a deposit premium of 6.35%.
In July, 1995, North Fork completed its purchase acquisition of Great Neck
Bancorp, the parent company of Bank of Great Neck, a Long Island based
commercial bank ("Great Neck"). Great Neck, with assets of $91 million,
including $49.4 million in net loans, and $90.3 million in deposits, was merged
into North Fork Bank.
In November, 1994, North Fork completed a business combination with Metro,
the parent company of Bayside Federal Savings Bank ("Bayside"), by merging Metro
with and into North Fork. Simultaneously, Bayside (with approximately $1.0
billion in assets, $.9 billion in deposits and $83.5 million in stockholders'
equity, operating through 13 full-service banking locations in the New York City
borough of
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<PAGE> 75
Queens and Nassau and Suffolk Counties) was merged with and into North Fork
Bank. The merger was accounted for as a pooling of interests.
North Fork, through North Fork Bank, provides a variety of banking and
financial services to middle market and small business organizations, local
governmental units, and retail customers in the metropolitan New York area.
From time to time, North Fork investigates and holds discussions and
negotiations in connection with possible transactions with other banks. As of
the date of this Prospectus, North Fork has not entered into any agreements or
understandings with respect to any significant transactions of the type referred
to above except for the transactions described herein and in documents
incorporated herein by reference. See "AVAILABLE INFORMATION" and "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE." Any such transaction would be subject to
stockholder approval only if required under applicable law or the rules of the
NYSE.
For more information about North Fork, reference is made to the 1996 North
Fork Form 10-K which is incorporated herein by reference. See "AVAILABLE
INFORMATION" and "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Corporation for each of the following periods:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------- -----------------------------------------
1997 1996 1996 1995 1994 1993 1992
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (excluding
interest on deposits)... 3.60 4.32 3.87 5.73 4.35 2.81 3.69
Raio of earnings to fixed
charges (including
interest on deposits)... 1.91 1.74 1.64 1.83 1.61 1.19 1.16
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income before income taxes, extraordinary items and
cumulative effect of changes in accounting principle, plus fixed charges
(excluding capitalized interest but including amortization of amounts previously
capitalized), less equity in undistributed earnings of companies owned less than
50 percent. Fixed charges consist of interest (including capitalized interest)
on all indebtedness, amortization of debt discount and expense, and that portion
of rental expense which the Corporation believes to be representative of
interest. A statement setting forth the computation of the unaudited ratio of
earnings to fixed charges has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part.
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<PAGE> 76
DESCRIPTION OF THE CAPITAL SECURITIES
Each North Fork Capital Trust may issue, from time to time, only one series
of Capital Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of Trust of each North Fork Capital Trust
authorizes the Administrative Trustees of such North Fork Capital Trust to issue
on behalf of such North Fork Capital Trust one series of Capital Securities. The
Declaration of Trust will be qualified as an indenture under the Trust Indenture
Act. The Capital Securities will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred, deferred or
other special rights or such restrictions as shall be set forth in the
Declaration of Trust or made part of the Declaration of Trust by the Trust
Indenture Act. Reference is made to the Prospectus Supplement relating to the
Capital Securities of the North Fork Capital Trust for specific terms, including
(i) the distinctive designation of such Capital Securities; (ii) the number of
Capital Securities issued by such North Fork Capital Trust; (iii) the annual
distribution rate (or method of determining such rate) for Capital Securities
issued by such North Fork Capital Trust and the date or dates upon which such
distributions shall be payable; provided, however, that distributions on such
Capital Securities shall be payable on a semi-annual basis to holders of such
Capital Securities as of a record date in each semi-annual period during which
such Capital Securities are outstanding; (iv) whether distributions on Capital
Securities issued by such North Fork Capital Trust shall be cumulative, and, in
the case of Capital Securities having such cumulative distribution rights, the
date or dates or method of determining the date or dates from which
distributions on Capital Securities issued by such North Fork Capital Trust
shall be cumulative; (v) the amount or amounts which shall be paid out of the
assets of such North Fork Capital Trust to the holders of Capital Securities of
such North Fork Capital Trust upon voluntary or involuntary dissolution,
winding-up or termination of such North Fork Capital Trust; (vi) the obligation,
if any, of such North Fork Capital Trust to purchase or redeem Capital
Securities issued by such North Fork Capital Trust, the price or prices at
which, the period or periods within which, and the terms and conditions upon
which, Capital Securities issued by such North Fork Capital Trust shall be
purchased or redeemed, in whole or in part, pursuant to such obligation; (vii)
the voting rights, if any, of Capital Securities issued by such North Fork
Capital Trust in addition to those required by law, including the number of
votes per Capital Security and any requirement for the approval by the holders
of Capital Securities, or of Capital Securities issued by one or more North Fork
Capital Trusts, or of both, as a condition to specified action or amendments to
the Declaration of Trust of such North Fork Capital Trust; (viii) the terms and
conditions, if any, upon which the assets of such North Fork Capital Trust may
be distributed to holders of Capital Securities; (ix) if applicable, any
securities exchange upon which the Capital Securities shall be listed; and (x)
any other relevant rights, preferences, privileges, limitations or restrictions
of Capital Securities issued by such North Fork Capital Trust not inconsistent
with the Declaration of Trust of such North Fork Capital Trust or with
applicable law. All Capital Securities offered hereby will be guaranteed by the
Corporation to the extent set forth below under "Description of the Guarantees."
Any United States Federal income tax considerations applicable to any offering
of Capital Securities will be described in the Prospectus Supplement relating
thereto.
In connection with the issuance of Capital Securities, each North Fork
Capital Trust will issue one series of Common Securities. The Declaration of
Trust of each North Fork Capital Trust authorizes the Administrative Trustees of
such trust to issue on behalf of such North Fork Capital Trust one series of
Common Securities having such terms including distributions, redemption, voting,
liquidation rights or such restrictions as shall be set forth therein. The terms
of the Common Securities issued by a North Fork Capital Trust will be
substantially identical to the terms of the Capital Securities issued by such
trust and the Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Capital Securities except that, upon an event of
default under the Declaration of Trust, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Capital Securities. Except in certain limited circumstances, the Common
Securities will also carry the right to vote to appoint, remove or replace any
of the North Fork Capital Trustees of a North Fork Capital Trust. All of the
Common Securities of each North Fork Capital Trust will be directly or
indirectly owned by the Corporation.
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<PAGE> 77
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Junior Subordinated Debt Securities may be issued from time to time in one
or more series under an indenture (the "Indenture"), between the Corporation and
Bankers Trust Company, as trustee (the "Debenture Trustee") which was filed as
an exhibit to the Registration Statement on Form S-4 (File No. 333-24419) as
filed by the Corporation and North Fork Capital Trust I with the Commission on
April 2, 1997. The terms of the Junior Subordinated Debt Securities will include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act. The following summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Indenture and the Trust Indenture Act.
Whenever particular provisions or defined terms in the Indenture are referred to
herein, such provisions or defined terms are incorporated by reference herein.
Section and Article references used herein are references to provisions of the
Indenture unless otherwise noted.
GENERAL
The Junior Subordinated Debt Securities will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Debt. Because the
Corporation is a bank holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution),
is subject to the prior claims of creditors of such subsidiary, except to the
extent that the Corporation may itself be recognized as a creditor of such
subsidiary. Accordingly, the Junior Subordinated Debt Securities will be
subordinated to all Senior Debt and effectively subordinated to all existing and
future liabilities of the Corporation subsidiaries, and holders of Junior
Subordinated Debt Securities should look only to the assets of the Corporation
for payments on the Junior Subordinated Debt Securities. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture or any existing
or other indenture that the Corporation may enter into in the future or
otherwise. See "-- Subordination." The Junior Subordinated Debt Securities are
issuable in one or more series pursuant to an Indenture supplemental to the
Indenture, or a resolution of the Corporation's Board of Directors or a special
committee appointed thereby and set forth in an Officer's Certificate (each, a
"Supplemental Indenture").
In the event Junior Subordinated Debt Securities are issued to a North Fork
Capital Trust or a trustee of such trust in connection with the issuance of
Trust Securities by such North Fork Capital Trust, such Junior Subordinated Debt
Securities subsequently may be distributed pro rata to the holders of such Trust
Securities in connection with the dissolution of such North Fork Capital Trust
upon the occurrence of certain events described in the Prospectus Supplement
relating to such Trust Securities. Only one series of Junior Subordinated Debt
Securities will be issued to a North Fork Capital Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such North Fork
Capital Trust.
Reference is made to the Prospectus Supplement relating to the particular
Junior Subordinated Debt Securities being offered thereby for the following
terms: (1) the designation of such Junior Subordinated Debt Securities; (2) the
aggregate principal amount of such Junior Subordinated Debt Securities; (3) the
percentage of their principal amount at which such Junior Subordinated Debt
Securities will be issued; (4) the date or dates on which such Junior
Subordinated Debt Securities will mature and the right, if any, to extend such
date or dates; (5) the rate or rates, if any, per annum, at which such Junior
Subordinated Debt Securities will bear interest, or the method of determination
of such rate or rates; (6) the date or dates from which such interest shall
accrue, the interest payment dates on which such interest will be payable or the
manner of determination of such interest payment dates and the record dates for
the determination of holders to whom interest is payable on any such interest
payment dates; (7) the right, if any, to extend the interest payment periods and
the duration of such extension; (8) provisions for a sinking purchase or other
analogous fund, if any; (9) the period or periods, if any, within which, the
price or prices of which, and the terms and conditions upon which such Junior
Subordinated Debt Securities may be redeemed, in whole or in part, at the option
of the Corporation or the holder; (10) the form of such Junior Subordinated Debt
Securities; and (11) any other specific terms
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<PAGE> 78
of the Junior Subordinated Debt Securities. Principal, premium, if any, and
interest, if any, will be payable, and the Junior Subordinated Debt Securities
offered hereby will be transferable, at the corporate trust office of Bankers
Trust Company, as Property Trustee (the "Property Trustee") in New York, New
York, provided that payment of interest, if any, may be made at the option of
the Corporation by check mailed to the address of the person entitled thereto as
it appears in the Security Register.
If a Prospectus Supplement specifies that a series of Junior Subordinated
Debt Securities is denominated in a currency or currency unit other than United
States dollars, such Prospectus Supplement shall also specify the denomination
in which such Junior Subordinated Debt Securities will be issued and the coin or
currency in which the principal, premium, if any, and interest, if any, on such
Junior Subordinated Debt Securities will be payable, which may be United States
dollars based upon the exchange rate for such other currency or currency unit
existing on or about the time a payment is due.
The Indenture contains no covenants or other provisions to afford
protection to holders of the Junior Subordinated Debt Securities in the event of
a highly leveraged transaction or a change in control of the Corporation, except
to the limited extent described under "Consolidation, Merger, Sale of Assets and
Other Transactions" below.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Junior Subordinated Debt Securities will be represented by one or more
global certificates registered in the name of Cede & Co. as the nominee of the
Depository Trust Company ("DTC") if, and only if, distributed to the holders of
the Trust Securities. Until such time, the Junior Subordinated Debt Securities
will be registered in the name of the Trust and held by the Property Trustee.
Should the Junior Subordinated Debt Securities be distributed to holders of the
Trust Securities, beneficial interests in the Junior Subordinated Debt
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by participants in DTC. Except as described below,
Junior Subordinated Debt Securities in certificated form will not be issued in
exchange for the global certificates.
A global security shall be exchangeable for Junior Subordinated Debt
Securities registered in the names of persons other than Cede & Co. only if (i)
DTC notifies the Corporation that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have been
appointed, or if at any time DTC ceases to be a "clearing agency" registered
under the Exchange Act, at a time when DTC is required to be so registered to
act as such depositary, (ii) the Corporation in its sole discretion determines
that such global security shall be so exchangeable, or (iii) there shall have
occurred and be continuing a Debenture Event of Default (as defined below). Any
global security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for certificates registered in such names as DTC shall direct. It
is expected that such instructions will be based upon directions received by DTC
from its participants with respect to ownership of beneficial interests in such
global security. In the event that Junior Subordinated Debt Securities are
issued in certificated form, such Junior Subordinated Debt Securities will be in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof and may be transferred or exchanged only in such minimum denominations
and in the manner and at the offices described below.
Payments on Junior Subordinated Debt Securities represented by a global
security will be made to DTC, as the depositary for the Junior Subordinated Debt
Securities. In the event Junior Subordinated Debt Securities are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Debt Securities will be registrable, and Junior Subordinated
Debt Securities will be exchangeable for Junior Subordinated Debt Securities of
other denominations of a like aggregate principal amount, at the corporate
office of the Debenture Trustee in New York, New York, or at the offices of any
payment agent or transfer agent appointed by the Corporation, provided that
payment of interest may be made at the option of the Corporation by check mailed
to the address of the persons entitled thereto or by wire transfer. In addition,
if the Junior Subordinated Debt Securities are issued in certificated form, the
record dates for payment of interest will be the 1st day of the last month of
each semi-annual period.
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<PAGE> 79
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debt Securities will be made at the office of the Debenture Trustee
in the City of New York or at the office of any paying agent or paying agents as
the Corporation may designate from time to time, except that at the option of
the Corporation payment of any interest may be made (except in the case of
Junior Subordinated Debt Securities in global form), (i) by check mailed to the
address of the person entitled thereto as such address shall appear in the
register for Junior Subordinated Debt Securities or (ii) by transfer to an
account maintained by the person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Junior Subordinated Debt Security
will be made to the person in whose name such Junior Subordinated Debt Security
is registered at the close of business on the Record Date for such interest,
except in the case of defaulted interest. The Corporation may at any time
designate additional paying agents or rescind the designation of any paying
agent; however the Corporation will at all times be required to maintain a
paying agent in each place of payment for the Junior Subordinated Debt
Securities.
Any moneys deposited with the Debenture Trustee or any paying agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debt Security and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall, at the request of the Corporation, be
repaid to the Corporation and the holder of such Junior Subordinated Debt
Security shall thereafter look, as a general unsecured creditor, only to the
Corporation for payment thereof.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation covenants and agrees with each holder of Junior
Subordinated Debt Securities of a series issued to a North Fork Capital Trust
that it will not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any
shares of the Corporation's capital stock (which includes common and preferred
stock), or (ii) make any payment of principal, interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Corporation that rank
pari passu with or junior in interest to the Junior Subordinated Debt Securities
of such series or (iii) make any guarantee payments with respect to any
guarantee by the Corporation of debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior in interest to the
Junior Subordinated Debt Securities (other than (a) dividends or distributions
in common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the related
Guarantee, (d) purchases or acquisitions of shares of the Corporation's common
stock in connection with the satisfaction by the Corporation of its obligations
under any employee benefit plan or other contractual obligation of the
Corporation (other than a contractual obligation ranking pari passu with or
junior in interest to the Junior Subordinated Debt Securities), (e) as a result
of a reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, or (f) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being covered or exchanged), if at such time (i) there shall have occurred a
Debenture Event of Default, (ii) the Corporation shall be in default with
respect to its payment of any obligations under the related Guarantee or (iii)
the Corporation shall have given notice of its election to begin an Extension
Period as provided in the Indenture and shall not have rescinded such notice, or
such Extension Period, or any extension thereof, shall be continuing.
The Corporation also covenants with each Holder of Junior Subordinated Debt
Securities of a series issued to a North Fork Capital Trust (i) to maintain
directly 100% ownership of the Common Securities of such North Fork Capital
Trust; provided, however, that any permitted successor of the Corporation
hereunder may succeed to the Corporation's ownership of such Common Securities,
(ii) not to voluntarily terminate, windup or liquidate such North Fork Capital
Trust, except (a) in connection with a distribution
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<PAGE> 80
of the Junior Subordinated Debt Securities of such series to the holders of
Capital Securities in liquidation of such North Fork Capital Trust or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Declaration of Trust and (iii) to use its reasonable efforts,
consistent with the terms and provisions of such Declaration of Trust, to cause
such North Fork Capital Trust to remain classified as a grantor trust and not an
association taxable as a corporation for United States Federal income tax
purposes.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of Junior Subordinated Debt Securities, amend, waive
or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of
Junior Subordinated Debt Securities or the holders of the Capital Securities so
long as they remain outstanding) and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Trustee, with the consent
of holders of not less than a majority in principal amount of Junior
Subordinated Debt Securities; provided, however, that no such modification may,
without the consent of the holder of each outstanding Junior Subordinated Debt
Security so affected, (i) change the Stated Maturity or reduce the principal
amount of the Junior Subordinated Debt Securities or reduce the rate or extend
the time of payment of interest thereon or (ii) reduce the percentage of
principal amount of Junior Subordinated Debt Securities, the holders of which
are required to consent to any such modification of the Indenture.
In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of Junior Subordinated Debt Securities, any
supplemental Indenture for the purpose of creating any Other Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to each series of Junior Subordinated Debt Securities that
has occurred and is continuing constitutes a "Debenture Event of Default":
i) failure for thirty days to pay any interest on the Junior
Subordinated Debt Securities of that series when due (subject to the
deferral of any due date in the case of an Extension Period); or
ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debt Securities of that series when due, whether at maturity,
upon redemption, by declaration of acceleration or otherwise; or
iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for ninety days after written
notice to the Corporation from the Debenture Trustee or the holders of at
least 25% in aggregate outstanding principal amount of the Junior
Subordinated Debt Securities of that series; or
iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation; or
v) in respect of a series issued to a North Fork Capital Trust, the
voluntary or involuntary dissolution, winding-up or termination of such
North Fork Capital Trust, except in connection with the distribution of the
Junior Subordinated Debt Securities to the holders of Trust Securities in
liquidation of such North Fork Capital Trust, the redemption of all of the
Trust Securities of such North Fork Capital Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the related
Declaration of Trust.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in
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<PAGE> 81
aggregate outstanding principal amount of the Junior Subordinated Debt
Securities may declare the principal due and payable immediately upon a
Debenture Event of Default and, should the Debenture Trustee or such holders of
Junior Subordinated Debt Securities fail to make such declaration, the holders
of at least 25% in aggregate Liquidation Amount of the Capital Securities shall
have such right. The holders of a majority in aggregate principal amount of the
Outstanding Securities of the Capital Securities may annul such declaration and
waive the default if the default (other than the non-payment of the principal of
the Junior Subordinated Debt Securities which has become due solely by such
acceleration) has been cured and a sum sufficient to pay all matured
installations of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee. Should the holders of Junior
Subordinated Debt Securities fail to annul such declaration and waive such
default, the holders of a majority in aggregate liquidation amount of the
Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities affected thereby may, on behalf of the
holders of all the Junior Subordinated Debt Securities, waive any past default,
except a default in the payment of principal of (or premium, if any) or interest
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default in respect of a covenant
or provision which under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Junior Subordinated Debt Security.
Should the holders of such Junior Subordinated Debt Securities fail to annul
such declaration and waive such default, the holders of a majority in aggregate
liquidation amount of the Capital Securities shall have such right. The
Corporation is required to file annually with the Debenture Trustee a
certificate as to whether or not the Corporation is in compliance with all the
conditions and covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Junior Subordinated Debt Securities, and any other amounts
payable under the Indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Junior Subordinated Debt
Securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on the Junior Subordinated Debt Securities on the date such interest
or principal is otherwise payable, a holder of Capital Securities may institute
a Direct Action. The Corporation may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Capital Securities. Notwithstanding any payments made
to a holder of Capital Securities by the Corporation in connection with a Direct
Action, the Corporation shall remain obligated to pay the principal of or
interest on the Junior Subordinated Debt Securities, and the Corporation shall
be subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Capital Securities to the extent of any payments made
by the Corporation to such holder in any Direct Action.
The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the Junior Subordinated Debt Securities unless there shall
have been an Event of Default under the applicable Declaration of Trust.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge with or into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge with or into the Corporation or convey, transfer or
lease its properties and assets substantially as an entirety to the Corporation,
unless (i) in case the Corporation consolidates with or merges with or into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any state or the District of Columbia, and such
successor Person expressly assumes the
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<PAGE> 82
Corporation's obligations on the Junior Subordinated Debt Securities issued
under the Indenture; (ii) immediately after giving effect thereto, no Debenture
Event of Default, and no event which, after notice or lapse of time or both,
would become a Debenture Event of Default, shall have occurred and be
continuing; (iii) such transaction is permitted under the applicable Declaration
and the applicable Guarantee and does not give rise to any breach or violation
of the applicable Declaration or the applicable Guarantee; and (iv) certain
other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debt Securities protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders of
the Junior Subordinated Debt Securities.
SUBORDINATION
The Junior Subordinated Debt Securities will be subordinated and junior in
right of payment to certain other indebtedness of the Corporation to the extent
set forth in the applicable Prospectus Supplement.
RESTRICTIONS ON TRANSFER
Unless otherwise provided in a Prospectus Supplement, the Junior
Subordinated Debt Securities will be issued, and may be transferred only, in
minimum denominations of not less than $1,000 and multiples of $1,000 in excess
thereof. Any transfer, sale or other disposition of Junior Subordinated Debt
Securities in a denomination of less than $1,000 shall be deemed to be void and
of no legal effect whatsoever. Any such transferee shall be deemed not to be the
holder of such Junior Subordinated Debt Securities for any purpose, including
but not limited to the receipt of payments on such Junior Subordinated Debt
Securities, and such transferee shall be deemed to have no interest whatsoever
in such Junior Subordinated Debt Securities.
GOVERNING LAW
The Indenture and the Junior Subordinated Debt Securities will be governed
by and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
Subject to all the duties and responsibilities specified with respect to an
indenture trustee under the Trust Indenture Act, the Debenture Trustee is under
no obligation to exercise any of the powers vested in it by the indenture at the
request of any holder of Junior Subordinated Debt Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees which
will be executed and delivered by the Corporation for the benefit of the holders
from time to time of Capital Securities. Each Guarantee will be qualified as an
indenture under the Trust Indenture Act. Bankers Trust Company will act as
indenture trustee under each Guarantee (the "Guarantee Trustee"). The terms of
each Guarantee will be those set forth in such Guarantee and those made part of
such Guarantee by the Trust Indenture Act. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the form of Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
the Trust Indenture Act. Each Guarantee will be held by the Guarantee Trustee
for the benefit of the holders of the Capital Securities of the applicable North
Fork Capital Trust.
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GENERAL
Pursuant to each Guarantee, the Corporation will irrevocably agree, to the
extent set forth therein, to pay in full on a subordinated basis to the holders
of the Capital Securities issued by a North Fork Capital Trust, the Guarantee
Payments (as defined herein) (except to the extent paid by such North Fork
Capital Trust), as and when due, regardless of any defense, right of set-off or
counterclaim which such North Fork Capital Trust may have or assert other than
the defense of payment. The following payments with respect to Capital
Securities issued by a North Fork Capital Trust, to the extent not paid by such
North Fork Capital Trust (the "Guarantee Payments"), will be subject to the
Guarantee thereon (without duplication): (i) any accrued and unpaid
distributions which are required to be paid on such Capital Securities, to the
extent such North Fork Capital Trust shall have funds available therefor; (ii)
the applicable redemption price, including all accrued and unpaid distributions
(the "Redemption Price"), to the extent such North Fork Capital Trust has funds
available therefor, with respect to any Capital Securities called for redemption
by such North Fork Capital Trust and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of such North Fork Capital Trust (other
than in connection with the distribution of the assets of such North Fork
Capital Trust to the holders of Capital Securities or the redemption of all of
the Capital Securities), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid distributions on such Capital Securities to
the date of payment, to the extent such North Fork Capital Trust has funds
available therefor and (b) the amount of assets of such North Fork Capital Trust
remaining available for distribution to holders of such Capital Securities in
liquidation of such North Fork Capital Trust after satisfaction of liabilities
to creditors of such North Fork Capital Trust as required by applicable law. The
Corporation's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Corporation to the holders of Capital
Securities or by causing the applicable North Fork Capital Trust to pay such
amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis
with respect to the Capital Securities issued by the applicable North Fork
Capital Trust, but will not apply to any payment of distributions except to the
extent such North Fork Capital Trust shall have funds available therefor, and is
not a guarantee of collection. If the Corporation does not make interest
payments on the Junior Subordinated Debt Securities purchased by a North Fork
Capital Trust, such North Fork Capital Trust will not pay distributions on the
Capital Securities issued by such North Fork Capital Trust and will not have
funds legally available therefor.
The Corporation has also agreed separately to irrevocably and
unconditionally guarantee the obligations of the North Fork Capital Trusts with
respect to the Common Securities (the "Common Securities Guarantees") to the
same extent as the Guarantees, except that upon an event of default under the
Indenture, holders of Capital Securities shall have priority over holders of
Common Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
STATUS OF THE GUARANTEES
The Guarantees will constitute unsecured obligations of the Corporation and
will rank subordinate and junior in right of payment to all Senior Debt in the
same manner as Junior Subordinated Debt Securities.
Each Guarantee will rank pari passu with all Other Guarantees (as defined
therein) issued by the Corporation. The Guarantees will constitute a guarantee
of payment and not of collection (i.e., the guaranteed party may institute a
legal proceeding directly against the Corporation to enforce its rights under
the Guarantee without first instituting a legal proceeding against any other
person or entity). Each Guarantee will be held for the benefit of the holders of
the Capital Securities. The Guarantees will not be discharged except by payment
of the Guarantee Payments in full to the extent not paid by the applicable North
Fork Capital Trust or upon distribution to the holders of the Capital Securities
of the Junior Subordinated Debt Securities. The Guarantee does not place a
limitation on the amount of additional Senior Debt that may be incurred by the
Corporation. The Corporation expects from time to time to incur additional
indebtedness constituting Senior Debt.
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AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), each Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate liquidation amount of such
outstanding Capital Securities. The manner of obtaining any such approval will
be as set forth in an accompanying Prospectus Supplement. All guarantees and
agreements contained in a Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Corporation and shall inure to
the benefit of the holders of the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under a Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder;
provided, however, that except with respect to a default in payment of any
Guarantee Payment, the Corporation shall have received notice of default and
shall not have cured such default within 60 days after receipt of such notice.
The holders of not less than a majority in aggregate liquidation amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of a Guarantee or to direct the exercise of any trust or power conferred
upon the Guarantee Trustee under a Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under a Guarantee without
first instituting a legal proceeding against the applicable North Fork Capital
Trust, the Guarantee Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under each
Guarantee.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
Each Guarantee provides that the Corporation shall not consolidate with or
merge with or into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge with or into the Corporation or convey, transfer or
lease its properties and assets substantially as an entirety to the Corporation,
unless (i) in case the Corporation consolidates with or merges with or into
another Person or conveys or transfers its properties and assets substantially
as an entirety to an Person, the successor Person is organized under the laws of
the United States or any state or the District of Columbia and such successor
Person expressly assumes the Corporation's obligations on such Guarantee; (ii)
immediately after giving effect thereto, no event of default under such
Guarantee, and no event which, after notice or lapse of time or both, would
become an event of default under such Guarantee, shall have happened and be
continuing; (iii) such transaction is permitted under the applicable Declaration
of Trust and Indenture and does not give rise to any breach or violation of the
applicable Declaration of Trust or Indenture; and (iv) certain other conditions
as prescribed in such Guarantee are met.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of a Guarantee, undertakes to
perform only such duties as are specifically set forth in such Guarantee and,
after default with respect to such Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the power vested in it by a Guarantee at the
request of any holder of Capital Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
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<PAGE> 85
TERMINATION
Each Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Capital Securities issued
by the applicable North Fork Capital Trust or upon distribution of Junior
Subordinated Debt Securities to the holders of the Capital Securities. Each
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Capital Securities issued by the applicable
North Fork Capital Trust must restore payment of any sums paid under the Capital
Securities or the Guarantee.
GOVERNING LAW
The Guarantees will be governed by and construed in accordance with the
laws of the State of New York.
PLAN OF DISTRIBUTION
The Corporation may sell the Junior Subordinated Debt Securities and any
North Fork Capital Trust may sell Capital Securities in any of, or any
combination of, the following ways: (i) directly to purchasers; (ii) through
agents, (iii) through underwriters, and (iv) through dealers.
Offers to purchase Offered Securities may be solicited directly by the
Corporation and/or any North Fork Capital Trust, as the case may be, or by
agents designated by the Corporation and/or any North Fork Capital Trust, as the
case may be, from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act of 1933, involved in
the offer or sale of the Offered Securities in respect of which this Prospectus
is delivered will be named, and any commissions payable by the Corporation to
such agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting in a best
efforts basis for the period of its appointment (ordinarily five business days
or less). Agents, dealers and underwriters may be customers of, engage in
transactions with, or perform services for the Corporation in the ordinary
course of business.
If an underwriter or underwriters are utilized in the sale, the Corporation
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make releases of the Offered Securities in respect of which this
Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Corporation and/or any North Fork
Capital Trust, as the case may be, will sell such Offered Securities to the
dealer, as principal. The dealer may then resell such Offered Securities to the
public at varying prices to be determined by such dealer at the time of resale.
The name of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by the Corporation and/or any North Fork Capital
Trust, as the case may be, against certain liabilities, including liabilities
under the Securities Act of 1933.
The place and time of delivery for the Offered Securities in respect of
which this Prospectus is delivered will be set forth in the Prospectus
Supplement.
VALIDITY OF SECURITIES
Certain matters relating to the validity of the Capital Securities, the
Junior Subordinated Debt Securities and the Guarantees, the enforceability of
the Declarations and the formation of the Trusts and certain matters relating
thereto will be passed upon on behalf of the Corporation and the North Fork
Capital Trusts by Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to
the Corporation and the
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<PAGE> 86
North Fork Capital Trusts. Certain United States Federal income taxation matters
will be passed upon for the Corporation and the North Fork Capital Trusts by
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel to the Corporation
and the North Fork Capital Trusts.
EXPERTS
The consolidated financial statements of North Fork Bancorporation, Inc.
and subsidiaries as of December 31, 1996 and 1995 and for each of the years in
the three year period ended December 31, 1996, included in the Corporation's
1996 Form 10-K incorporated by reference into this Prospectus, have been
incorporated by reference herein and in the Registration Statement of which this
Prospectus is a part in reliance upon the report of KPMG Peat Marwick LLP,
independent auditors, included in the Corporation's 1996 Form 10-K and
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing. The report of KPMG Peat Marwick LLP refers to
various changes in accounting as discussed in the notes to these statements.
The consolidated financial statements of New York Bancorp Inc. and
subsidiaries as of September 30, 1996 and 1995 and for each of the years in the
three year period ended September 30, 1996, included in the Corporation's
Current Report on Form 8-K dated November 20, 1997 incorporated by reference
into this Prospectus, have been incorporated by reference herein and in the
Registration Statement of which this Prospectus is a part in reliance upon the
report of KPMG Peat Marwick LLP, independent auditors, included in the
Corporation's Current Report on Form 8-K dated November 20, 1997 and
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing. The report of KPMG Peat Marwick LLP refers to a
change in accounting as discussed in the notes to these statements.
ACCOUNTANTS
The consolidated financial statements of Branford Savings Bank as of
December 31, 1996 and 1995 and for each of the years in the three-year period
ended December 31, 1996, included in Branford's 1996 Form F-2 and incorporated
by reference into this Prospectus, have been incorporated by reference herein
and in the Registration Statement of which the Prospectus is a part in reliance
upon the report of Seward & Monde, independent auditors, included in Branford's
1996 Form F-2 and incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
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======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE
HEREBY EXCEPT AS CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION, THE TRUST OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION CONTAINED HEREIN OR IN THE AFFAIRS OF THE CORPORATION OR THE TRUST
SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY, ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Certain ERISA Considerations.......... S-4
Summary............................... S-6
Risk Factors.......................... S-10
Use of Proceeds....................... S-15
North Fork Capital Trust II........... S-15
North Fork............................ S-16
Selected Historical Financial
Information......................... S-18
The Mergers........................... S-22
Pro Forma Combined Selected Financial
Statements.......................... S-24
Pro Forma Condensed Combined Financial
Statements.......................... S-27
Capitalization........................ S-35
Accounting Treatment.................. S-36
Description of Capital Securities..... S-36
Description of Junior Subordinated
Debt Securities..................... S-48
Description of Guarantee.............. S-58
Relationship Among the Capital
Securities, the Junior Subordinated
Debt Securities and the Guarantee... S-61
Certain United States Federal Income
Tax Consequences.................... S-62
Underwriting.......................... S-67
Validity of Securities................ S-68
PROSPECTUS
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 3
Use of Proceeds....................... 4
The Trusts............................ 4
North Fork............................ 6
Ratio of Earnings To Fixed Charges.... 7
Description of the Capital
Securities.......................... 8
Description of the Junior Subordinated
Debt Securities..................... 9
Description of the Guarantees......... 14
Plan of Distribution.................. 17
Validity of Securities................ 17
Experts............................... 18
Accountants........................... 18
</TABLE>
======================================================
======================================================
$100,000,000
NORTH FORK CAPITAL
TRUST II
8.00% CAPITAL TRUST PASS-THROUGH
SECURITIES(R) (TRUPS(R))
(LIQUIDATION AMOUNT $1,000 PER
CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
NORTH FORK
BANCORPORATION, INC.
------------------------
PROSPECTUS SUPPLEMENT
DECEMBER 5, 1997
------------------------
SALOMON SMITH BARNEY
KEEFE, BRUYETTE & WOODS, INC.
SANDLER O'NEILL & PARTNERS, L.P.
======================================================
