<PAGE>
PURSUANT TO RULE NO. 424(b)2
FILE NO. 333-28479
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 17, 1997
$200,000,000
FIRST MARYLAND BANCORP
7.20% SUBORDINATED NOTES DUE JULY 1, 2007
----------------
Interest on the Subordinated Notes will be payable on January 1 and July 1
of each year, commencing January 1, 1998. The Subordinated Notes may not be
redeemed prior to maturity and will not be subject to any sinking fund.
The Subordinated Notes will be subordinated to Senior Indebtedness of First
Maryland Bancorp. The Subordinated Notes are subject to acceleration only in
the event of certain bankruptcy or reorganization events involving First
Maryland Bancorp. See "Certain Terms of the Subordinated Notes" in this
Prospectus Supplement.
The Subordinated Notes will be represented by one or more global
Subordinated Notes registered in the name of the nominee of The Depository
Trust Company. Beneficial interests in the global Subordinated Notes will be
shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants. Except as described herein,
Subordinated Notes in definitive form will not be issued. The Subordinated
Notes will be issued only in denominations of $1,000 and integral multiples
thereof. See "Description of Securities" in the accompanying Prospectus. The
Subordinated Notes will trade in DTC's Same-Day Funds Settlement System, and
secondary market trading activity in the Subordinated Notes will therefore
settle in immediately available funds. All payments of principal and interest
will be made by First Maryland Bancorp in immediately available funds. See
"Certain Terms of the Subordinated Notes--Same-Day Settlement and Payment" in
this Prospectus Supplement.
----------------
THE SUBORDINATED NOTES ARE UNSECURED DEBT OBLIGATIONS OF THE COMPANY, ARE
NOT DEPOSITS OR OTHER OBLIGATIONS OF A DEPOSITORY INSTITUTION 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>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per Note........................... 99.943% .650% 99.293%
Total.............................. $199,886,000 $1,300,000 $198,586,000
</TABLE>
- --------
(1) Plus accrued interest from July 1, 1997.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company, estimated at $345,000.
----------------
The Subordinated Notes offered hereby are offered severally by the
Underwriters as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Subordinated Notes will be ready for delivery in book-entry
form in New York, New York through the facilities of DTC on or about July 2,
1997, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SALOMON BROTHERS INC
----------------
The date of this Prospectus Supplement is June 27, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SUBORDINATED
NOTES, INCLUDING OVERALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN
SUCH SECURITIES, AND THE IMPOSITION OF A PENALTY BID IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
FIRST MARYLAND BANCORP
First Maryland Bancorp (the "Company") is a Maryland corporation
incorporated in 1973 and is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended. At March 31, 1997, the Company
had consolidated total assets of $11.2 billion, total deposits of $7.6
billion, and total stockholders' equity of $1.3 billion. Its principal
subsidiaries are The First National Bank of Maryland, First Omni Bank, N. A.
and The York Bank and Trust Company. These banks provide comprehensive
corporate, commercial, correspondent and retail banking services, personal and
corporate trust services and related financial products and services to
individuals, businesses, governmental units and financial institutions,
primarily in Maryland and the adjacent states. The assets of these banks at
March 31, 1997 accounted for approximately 96% of the Company consolidated
total assets.
Allied Irish Banks, p.l.c. ("AIB") owns 100% of the common stock, and
controls 99% of the voting power of the capital stock, of the Company. AIB is
an Irish banking corporation whose securities are traded on the Dublin, London
and New York Stock Exchanges, and is a registered bank holding company under
the Bank Holding Company Act. At December 31, 1996, based upon United States
generally accepted accounting principles, AIB and its subsidiaries
(collectively, "AIB Group") had total assets of approximately $43.7 billion,
making it the largest banking corporation organized under the laws of Ireland.
AIB Group provides a full range of banking, financial and related services
principally in Ireland, the United States and the United Kingdom.
RECENT EVENTS
As discussed more fully under the heading "Recent Events" in the
accompanying Prospectus, on January 21, 1997, the Company, AIB and Dauphin
Deposit Corporation ("Dauphin") entered into a definitive Agreement and Plan
of Merger (the "Merger Agreement") pursuant to which AIB and the Company will
acquire Dauphin through the merger of Dauphin into the Company. Dauphin is
headquartered in Harrisburg, Pennsylvania and, through its bank and nonbank
subsidiaries, provides corporate, commercial, correspondent and retail banking
services, personal and corporate trust services and related financial products
and services to individuals, businesses, governmental units and financial
institutions, primarily in south-central Pennsylvania. At March 31, 1997,
Dauphin had consolidated total assets of $5.8 billion, total deposits of $4.1
billion and total stockholders's equity of $573.4 million.
All regulatory and shareholder approvals required to consummate the Merger
have been received and it is anticipated that the Merger will be consummated
on or about July 8, 1997.
USE OF PROCEEDS
The Company has agreed with AIB to fund up to $875 million of the aggregate
purchase price for Dauphin, and accordingly, the Company will use the net
proceeds from the sale of the Subordinated Notes, together with other
available funds (collectively, "Company Cash"), for such purpose. To the
extent that Company Cash exceeds the cash portion of the consideration payable
to Dauphin shareholders in the Merger, the excess Company Cash, which may
include net proceeds of the offering of the Subordinated Notes, will be paid
to AIB in consideration for AIB issuing its ordinary shares (in the form of
AIB ADSs) in the Merger. For information concerning certain pro forma results
of the Merger, see "Incorporation of Certain Documents by Reference" in the
accompanying Prospectus.
S-2
<PAGE>
CERTAIN TERMS OF THE SUBORDINATED NOTES
The following description of the particular terms of the subordinated notes
(the "Subordinated Notes") offered hereby (referred to in the Prospectus as
"Offered Securities") supplements and, to the extent inconsistent therewith,
replaces the description of the general terms of the Securities set forth
under the heading "Description of Securities" in the accompanying Prospectus,
to which description reference is hereby made. Capitalized terms used herein
but not defined have the meanings given to them in the accompanying
Prospectus. The statements herein concerning the Subordinated Notes and the
Indenture do not purport to be complete. All such statements are qualified in
their entirety by reference to the accompanying Prospectus and the provisions
of the Indenture, which has been filed with the Securities and Exchange
Commission.
GENERAL
The Subordinated Notes constitute a series of Securities to be issued under
the Indenture referred to in the accompanying Prospectus. The Subordinated
Notes will be limited to $200,000,000 aggregate principal amount and will
mature on July 1, 2007.
The Subordinated Notes will bear interest at the rate set forth on the cover
page of this Prospectus Supplement from July 1, 1997, payable semi-annually in
arrears on January 1 and July 1 of each year, commencing January 1, 1998, to
the persons in whose names the Subordinated Notes are registered at the close
of business on the preceding December 15 and June 15, as the case may be.
The Subordinated Notes are not redeemable prior to maturity and will not be
subject to any sinking fund.
SUBORDINATION
The obligations of the Company to make any payment on account of the
principal of and premium, if any, and interest on the Subordinated Notes will
be subordinate and junior in right of payment to all Senior Indebtedness of
the Company.
"Senior Indebtedness," with respect to the Subordinated Notes, means,
whether recourse is to all or a portion of the assets of the Company and
whether or not contingent: (i) every obligation of the Company for money
borrowed; (ii) every obligation of the Company evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of the Company with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of the
Company; (iv) every obligation of the Company issued or assumed as the
deferred purchase price of property or services, including trade accounts
payable or accrued liabilities arising in the ordinary course of business; (v)
every capital lease obligation of the Company; (vi) every obligation of the
Company for claims (as defined in Section 101(4) of the United States
Bankruptcy Code of 1978, as amended) in respect of derivative products such as
interest and foreign exchange rate contracts, commodity contracts and similar
arrangements; and (vii) every obligation of the type referred to in clauses
(i) through (vi) of another person and all dividends of another person the
payment of which, in either case, the Company has guaranteed or is responsible
or liable, directly or indirectly, as obligor or otherwise; provided, that
"Senior Indebtedness" does not include (a) any obligations which, by their
terms, are expressly stated to rank pari passu in right of payment with, or to
not be superior in right of payment to, the Subordinated Notes, (b) any
indebtedness of the Company 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 Company, (c) any indebtedness of the
Company to any of its subsidiaries for borrowed money or (d) indebtedness to
any employee of the Company.
The Company's outstanding 8 3/8% Subordinated Notes due 2002 in the
aggregate principal amount of $100 million and its 10 3/8% Subordinated
Capital Notes due 1999 in the aggregate principal amount of $60 million, as
well as the Company's Floating Rate Junior Subordinated Debentures due 2027
and its Floating Rate Junior Subordinated Debentures due 2027, Series B, in
the aggregate principal amount of $300 million, will rank senior to the
Subordinated Notes. As of March 31, 1997, the Company had Senior Indebtedness
of approximately $535.6 million, and the Company's subsidiaries had
indebtedness and other liabilities of approximately $9.4 billion to which the
Subordinated Notes would be effectively subordinated.
S-3
<PAGE>
No payment on account of the principal of and premium, if any, or interest
in respect of the Subordinated Notes may be made unless all amounts of
principal, premium, if any, sinking funds and interest then due on all Senior
Indebtedness shall have been paid in full or duly provided for and at the time
of such payment pursuant to the Subordinated Notes or immediately thereafter,
there shall not have occurred and be continuing a default in payment with
respect to Senior Indebtedness or an event of default with respect to any
Senior Indebtedness that would permit a holder thereof to accelerate the
maturity of such Senior Indebtedness. Upon any payment or distribution of
assets to creditors upon any insolvency, receivership, conservatorship,
reorganization, readjustment of debt, marshalling of assets and liabilities or
similar proceedings or any liquidation or winding-up of or relating to the
Company as a whole, whether voluntary or involuntary, the holders of all
Senior Indebtedness will first be entitled to receive payment in full before
the Holders of the Subordinated Notes will be entitled to receive any payment
in respect of the principal of and premium, if any, sinking funds and interest
on the Subordinated Notes. In the event the Holders of Subordinated Notes
receive payment or distributions of assets of the Company and all Senior
Indebtedness has not been paid in full, then such payment or distribution
shall be held in trust for the benefit of the holders of Senior Indebtedness
and shall be paid over or delivered and transferred to the holders of Senior
Indebtedness. By reason of such subordination, in the event of insolvency of
the Company, Holders of the Subordinated Notes may recover less, ratably, than
holders of Senior Indebtedness.
EVENTS OF DEFAULT; LIMITED RIGHTS OF ACCELERATION
"Event of Default" means, with respect to the Subordinated Notes, any one of
the following events (whatever the reason and whether it 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, and whether or not it be occasioned by
the subordination provisions of the Indenture):
(a) a failure to pay any interest on the Subordinated Notes when due and
payable, continued for 30 days;
(b) a failure to pay principal of or any premium on the Subordinated
Notes when due;
(c) a failure to perform, or a breach of, any other covenant or agreement
of the Company in the Indenture (other than a covenant included in the
Indenture solely for the benefit of a series of Securities thereunder other
than the Subordinated Notes) continued for 90 days after written notice as
provided in the Indenture;
(d) the entry by a court having jurisdiction in the premises (i) of a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or similar law or (ii) of a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the Company to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or similar law, or the filing by the
Company of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or state law.
If an Event of Default described in clause (a), (b) and/or (c), above,
occurs and is continuing, then there will be no right of acceleration of the
payment of principal of the Subordinated Notes. In such event, the Trustee,
subject to certain limitations and conditions, may institute judicial
proceedings to enforce payment of the overdue principal, premium, if any, or
interest, or to obtain the performance of such covenant or agreement, or to
enforce any other proper remedy. If an Event of Default described in clause
(d) or (e), above, occurs and is continuing,
S-4
<PAGE>
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Subordinated Notes outstanding may, or the Trustee if so
directed by such Holders shall, declare the principal of the Subordinated
Notes to be due and payable immediately.
At any time after a declaration of acceleration with respect to the
Subordinated Notes has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority in aggregate
principal amount of the Subordinated Notes may, under certain circumstances,
rescind and annul such acceleration.
Under certain circumstances, the Trustee may withhold notice to the Holders
of the Subordinated Notes in a default if the Trustee in good faith determines
that the withholding of such notice is in the best interest of such Holders,
and the Trustee shall withhold such notice for certain defaults for a period
of 30 days.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity. Subject to such
provisions for the indemnification of the Trustee and to certain other
conditions, the Holders of a majority in aggregate principal amount of the
Subordinated Notes will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Subordinated Notes.
No Holder of Subordinated Notes will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or trustee or for any remedy thereunder, unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default and unless the Holders of at least 25% in aggregate principal amount
of the Subordinated Notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the Subordinated Notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a Holder
of a Subordinated Note for enforcement of payment of the principal of and
premium, if any, or interest on such Subordinated Note on or after the
respective due dates expressed in such Subordinated Note.
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
BOOK-ENTRY SYSTEM
The Subordinated Notes will be issued in the form of one or more fully
registered global securities, which will be deposited with, or on behalf of,
The Depository Trust Company, New York, New York ("DTC"), and registered in
the name of DTC's nominee. As a result, except as set forth in the
accompanying Prospectus, the Subordinated Notes may be transferred, in whole
or in part, only to another nominee of DTC or to a successor of DTC or its
nominee.
DTC has advised the Company that DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered under the Exchange
Act. DTC was created to hold securities of its participants and to facilitate
the clearance and settlement of securities transactions among its participants
in such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
DTC is owned by a number of its participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to DTC's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly. The rules applicable to DTC and its participants are
on file with the Securities and Exchange Commission.
S-5
<PAGE>
The Company understands that, under existing industry practices, in the
event that the Company requests any action of Holders, or an owner of a
beneficial interest in a global Subordinated Note desires to give or take any
action that a Holder is entitled to give or take under the Indenture, DTC
would authorize the participants holding the relevant beneficial interests to
give or take such action, and such participants would authorize beneficial
owners owning through such participants to give or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
See "Description of Securities--Global Securities" in the accompanying
Prospectus.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Subordinated Notes will be made in immediately available
funds. So long as the Subordinated Notes are represented by one or more global
Subordinated Notes, all payments of principal and interest will be made by the
Company in immediately available funds.
So long as the Subordinated Notes are represented by one or more global
Subordinated Notes registered in the name of the Depositary or its nominee,
the Subordinated Notes will trade in the Depositary's Same-Day Funds
Settlement System, and secondary market trading activity in the Subordinated
Notes will therefore be required by the Depositary to settle in immediately
available funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on the trading activity in the
Subordinated Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement"), the Company has agreed to sell to each of the
Underwriters, and each of such Underwriters has severally agreed to purchase,
the principal amounts of the Subordinated Notes set forth opposite its name
below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
Goldman, Sachs & Co. . . ........................................ $100,100,000
Lehman Brothers Inc. . . . ...................................... 33,300,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................... 33,300,000
Salomon Brothers Inc............................................. 33,300,000
------------
Total.......................................................... $200,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Subordinated Notes,
if any are taken.
The Underwriters propose to offer the Subordinated Notes in part directly to
the public at the initial public offering price 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 0.40% of the principal amount of the
Subordinated Notes. The Underwriters may allow, and such dealers may reallow,
a concession not in excess of 0.25% of the principal amount of the
Subordinated Notes to certain brokers and dealers. After the Subordinated
Notes are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
Certain of the Underwriters engage in transactions with and perform services
for the Company and its subsidiaries in the ordinary course of business.
S-6
<PAGE>
In connection with the offering, the Underwriters may purchase and sell the
Subordinated Notes in the open market. These transactions may include
overallotment and stabilizing transactions and purchases to cover short
positions created by the Underwriters in connection with the offering.
Stabilizing transactions consist of certain bids or purchases for the purpose
of preventing a decline in the market price of the Subordinated Notes, and
short positions created by the Underwriters involve the sale by the
Underwriters of a greater number of Subordinated Notes than they are required
to purchase from the Company in the offering. The Underwriters also may impose
a penalty bid, whereby selling concessions allowed to broker-dealers in
respect of the Subordinated Notes sold in the offering may be reclaimed by the
Underwriters if such Subordinated Notes are repurchased by the Underwriters in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the Subordinated Notes, which may be
higher than the price that might otherwise prevail in the open market, and
these activities, if commenced, may be discontinued at any time. These
transactions may be effected in the over-the-counter market or otherwise.
The Subordinated Notes will not be listed on any securities exchange. The
Subordinated Notes are a new series of securities with no established trading
market. The Underwriters have advised the Company that they intend to make a
market in the Subordinated Notes, but are not obligated to do so, and may
discontinue market making at any time without notice. Therefore, no assurance
can be given as to the liquidity of the trading market for the Subordinated
Notes.
LEGAL MATTERS
The validity of the Subordinated Notes offered hereby will be passed upon
for the Company by Gregory K. Thoreson, Senior Vice President and General
Counsel of the Company, and for the Underwriters by Simpson Thacher & Bartlett
(a partnership which includes professional corporations), New York, New York.
As to matters of Maryland law, Simpson Thacher & Bartlett will rely on the
opinion of Mr. Thoreson.
S-7
<PAGE>
PROSPECTUS
FIRST MARYLAND BANCORP
SUBORDINATED DEBT SECURITIES
The Company may from time to time offer up to $350,000,000 aggregate
principal amount of Subordinated Debt Securities consisting of debentures,
notes and/or other unsecured evidences of indebtedness in one or more series.
The Subordinated Debt Securities may be offered as separate series in amounts,
at prices and on terms to be determined at the time of sale. A Prospectus
Supplement to this Prospectus, which will be delivered together with this
Prospectus, will set forth the particular terms of the Subordinated Debt
Securities to be issued, including, where applicable, the title, aggregate
principal amount, denominations, maturity, rate, if any (which may be fixed or
variable), and time of payment of any interest, any terms for redemption at
the option of the Company or the holder, any terms for sinking fund payments,
any listing on a securities exchange and the initial public offering price and
any other terms in connection with the offering and sale of such series of
Subordinated Debt Securities.
The Subordinated Debt Securities will be unsecured obligations of the
Company, will not be savings accounts, deposits or other obligations of any
bank or nonbank subsidiary of the Company and will not be insured by the
Federal Deposit Insurance Corporation, the Bank Insurance Fund or any other
government agency.
The Company may sell Subordinated Debt Securities to or through
underwriters, and also may sell Subordinated Debt Securities directly to other
purchasers or through agents. See "Plan of Distribution". The accompanying
Prospectus Supplement will also set forth the names of any underwriters or
agents involved in the sale of the Subordinated Debt Securities in respect of
which this Prospectus is being delivered, the principal amounts, if any, to be
purchased by underwriters and the compensation, if any, of such underwriters
or agents.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT
----------------
The date of this Prospectus is June 17, 1997.
<PAGE>
AVAILABLE INFORMATION
First Maryland Bancorp (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, information statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, information statements and other information can
be inspected and copied at the public reference facilities of the Commission,
at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
and at the Commission's Regional Offices in New York at 7 World Trade Center,
Suite 1300, 13th Floor, New York, New York 10048 and in Chicago at Suite 1400,
Citicorp Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60661-
2511. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a
Web site (http://www.sec.gov) that contains reports, information statements
and other information regarding the Company.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all exhibits thereto, the "Registration Statement") filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and reference is
hereby made to the Registration Statement for further information with respect
to the Company and the Securities. Any statements contained herein concerning
the provisions of any document are not necessarily complete, and, in each
instance, reference is made to the copy of such document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission. Each
such statement is qualified in its entirety by such reference. The Company's
7.875% Noncumulative Preferred Stock, Series A, is listed on the New York
Stock Exchange. Reports and other information concerning the Company can also
be inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following reports previously filed with the Commission (File No. 1-7273)
pursuant to Section 13 of the Exchange Act: (a) the Company's Annual Report on
Form 10-K for the year ended December 31, 1996; (b) the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997; and (c) the
Company's Current Reports on Form 8-K dated January 21, 1997, February 3,
1997, March 5, 1997 and May 21, 1997. All documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the termination of the offering of
the Securities offered hereby shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Registration Statement or
this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or
oral request of any such person, a copy of any or all of the documents
incorporated herein by reference (other than exhibits to such documents which
are not specifically incorporated by reference in such documents). Written
requests for such copies should be directed to First Maryland Bancorp, 25
South Charles Street, Baltimore, Maryland 21201, Attention: James A. Smith.
Telephone requests may be directed to (410) 545-2100.
2
<PAGE>
THE COMPANY
The Company is a Maryland corporation incorporated in 1973 and is registered
as a bank holding company under the Bank Holding Company Act of 1956, as
amended (the "Bank Holding Company Act"). At March 31, 1997, the Company had
consolidated total assets of $11.2 billion, total deposits of $7.6 billion,
and total stockholders' equity of $1.3 billion. Its principal subsidiaries are
The First National Bank of Maryland ("First National"), First Omni Bank, N. A.
("First Omni") and The York Bank and Trust Company ("York Bank"). These banks
provide comprehensive corporate, commercial, correspondent and retail banking
services, personal and corporate trust services and related financial products
and services to individuals, businesses, governmental units and financial
institutions primarily in Maryland and the adjacent states. The assets of
these banks at March 31, 1997 accounted for approximately 96% of the Company's
consolidated total assets.
Allied Irish Banks, p.l.c. ("AIB") owns 100% of the common stock, and
controls 99% of the voting power of the capital stock, of the Company. AIB is
an Irish banking corporation whose securities are traded on the Dublin, London
and New York Stock Exchanges, and is a registered bank holding company under
the Bank Holding Company Act. At December 31, 1996, based upon United States
generally accepted accounting principles, AIB and its subsidiaries
(collectively, "AIB Group") had total assets of approximately $43.7 billion,
making it the largest banking corporation organized under the laws of Ireland.
AIB Group provides a full range of banking, financial and related services
principally in Ireland, the United States and the United Kingdom.
First National, the Company's largest subsidiary, is a national banking
association chartered under the laws of the United States. It commenced
operations in Baltimore, Maryland on July 10, 1865 and is the successor to a
Maryland banking institution founded in 1806. At March 31, 1997, First
National was the second largest commercial bank headquartered in Maryland in
terms of assets, loans and deposits, with assets of $9.3 billion, net loans of
$5.3 billion, and deposits of $7.1 billion. Its assets at such date comprised
approximately 83% of the consolidated assets of the Company. Including its
main office, First National operates 211 banking facilities in Maryland, the
District of Columbia and Virginia, including 159 full service offices, and
loan production offices in Washington, D.C., Easton, Maryland, and York,
Pennsylvania. It conducts international activities at its Baltimore
headquarters, a Cayman Islands branch and a representative office in London,
and maintains correspondent accounts with approximately 54 foreign banks.
First National offers investment, foreign exchange and securities brokerage
services, operates a brokerage subsidiary and, through a subsidiary, acts as
investment adviser to the ARK Funds, a family of proprietary mutual funds.
York Bank was acquired by the Company on December 31, 1991. It is a
Pennsylvania chartered commercial bank organized in 1960 as the product of a
consolidation of two banks chartered in 1810 and 1890. At March 31, 1997, York
Bank had assets of $1.1 billion, net loans of $675.1 million and deposits of
$887.9 million. York Bank operates 37 banking facilities, including 35 full
service offices in south central Pennsylvania. It is the largest banking
institution headquartered in York County, Pennsylvania, a market contiguous
with First National's principal market.
First Omni is a national banking subsidiary of the Company headquartered in
Millsboro, Delaware, which conducts retail bankcard services. It offers
MasterCard(R) and VISA(R) bankcards both directly and as agent for other
banks. At March 31, 1997, it managed bankcard receivables of $1.0 billion
(including $500 million of securitized bankcard receivables).
The Company operates various other subsidiaries, including First National
Mortgage Corporation, a mortgage banking company which originates, sells and
services residential mortgage loans through its network of offices in
Maryland, Virginia, Pennsylvania, Kentucky, Tennessee and Mississippi; First
Maryland Leasecorp, a commercial finance company specializing in equipment
financing; and First Maryland Mortgage Corporation, a commercial real estate
lender.
The Company has its principal executive office at 25 S. Charles Street,
Baltimore, Maryland 21201, telephone number (410) 244-4000.
3
<PAGE>
RECENT EVENTS
On January 21, 1997, the Company, AIB and Dauphin Deposit Corporation
("Dauphin") entered into a definitive Agreement and Plan of Merger (the
"Merger Agreement") pursuant to which AIB and the Company will acquire
Dauphin. In the Merger (defined below), Dauphin shareholders will receive cash
and AIB American Depository Shares ("AIB ADSs") having an aggregate value of
approximately $1.36 billion based on the market price of AIB ADSs on January
21, 1997. Dauphin is headquartered in Harrisburg, Pennsylvania and, through
its bank and nonbank subsidiaries, provides corporate, commercial,
correspondent and retail banking services, personal and corporate trust
services and related financial products and services to individuals,
businesses, governmental units and financial institutions, primarily in south-
central Pennsylvania. At March 31, 1997, Dauphin had consolidated total assets
of $5.8 billion, total deposits of $4.1 billion and total stockholders' equity
of $573.4 million.
Under the Merger Agreement, (i) Dauphin will merge into the Company (the
"Merger") and (ii) shareholders of Dauphin will receive per share of Dauphin
common stock either (a) $43.00 in cash or (b) that number (the "Exchange
Ratio") of AIB ADSs having a Closing Market Price (as defined below) of
$43.00, at each holder's election, but subject to certain limitations
described in the following sentences. If the Closing Market Price of an AIB
ADS shortly before the effective time of the Merger is below $37.00, then the
Exchange Ratio will equal 1.1620, and if the Closing Market Price is more than
$43.00, then the Exchange Ratio will be 1.0000. If the market price of an AIB
ADS as measured during a period shortly before the effective time of the
Merger is below $32.00, then Dauphin has the right to terminate the Merger
Agreement unless AIB adjusts the Exchange Ratio such that the value of the AIB
ADSs to be received by holders of Dauphin Common Stock is not less than
$37.19. "Closing Market Price" means the average closing price of the AIB ADSs
on the New York Stock Exchange for the ten New York Stock Exchange trading
days ending on the fifth business day prior to the closing date of the Merger.
At least 51% of the outstanding shares of Dauphin Common Stock must be
converted into AIB ADSs. If an insufficient number of Dauphin shareholders
elect to receive AIB ADSs, then a shareholder who elects to receive all cash
may have some or all of his shares converted into AIB ADSs. A shareholder who
makes no election may receive cash or AIB ADSs, in the discretion of AIB.
Consummation of the transaction is subject to, among other things, receipt
of regulatory approvals from the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), the Minister for Enterprise and
Employment of Ireland and the Central Bank of Ireland, and approval by the
shareholders of Dauphin and AIB. On May 19, 1997, the Federal Reserve Board
approved AIB's application to acquire Dauphin. On May 20, 1997, the
shareholders of Dauphin approved the Merger and on May 21, 1997, the
shareholders of AIB approved the acquisition of Dauphin, in each case by more
than the requisite percentage under applicable law. Consummation of the
transaction is expected to occur during the third quarter of 1997. Reference
is made to the Merger Agreement for additional information concerning the
Merger.
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, the Company is subject to the regulation and
supervision of the Federal Reserve Board. First National and First Omni, as
national banking associations, are subject to supervision and examination by
the Office of the Comptroller of the Currency (the "Comptroller"), and York
Bank is subject to supervision and examination by the Pennsylvania Department
of Banking and the Federal Deposit Insurance Company (the "FDIC"). First
National, First Omni and York Bank (the "Subsidiary Banks") are also subject
to various requirements and restrictions, including requirements to maintain
reserves against deposits, restrictions on the types and amounts of loans that
may be granted and the interest that may be charged thereon, and limitations
on the types of investments that may be made and the types of services that
may be offered. Various consumer laws and regulations also affect the
operations of the Subsidiary Banks. In addition to the impact of
4
<PAGE>
regulation, commercial banks are affected significantly by the actions of the
Federal Reserve Board as it attempts to control the money supply and credit
availability in order to influence the economy.
The federal banking agencies have broad enforcement powers over depository
institutions, including the power to terminate deposit insurance, to impose
substantial fines and other civil and criminal penalties, and to appoint a
conservator or receiver if any of a number of conditions are met. The federal
banking agencies also have broad enforcement powers over bank holding
companies, including the power to impose substantial fines and other civil and
criminal penalties.
Almost every aspect of the operations and financial condition of the
Subsidiary Banks is subject to extensive regulation and supervision and to
various requirements and restrictions under federal and state law, including
requirements governing capital adequacy, liquidity, earnings, dividends,
reserves against deposits, management practices, branching, loans, investments
and the provision of services. The activities and operations of the Company
also are subject to extensive federal supervision and regulation which, among
other things, limit non-banking activities, impose minimum capital
requirements and require approval to acquire 5% of any class of voting shares
or substantially all of the assets of a bank or other company. In addition to
the impact of regulation, banks and bank holding companies may be
significantly affected by legislation, which can change banking statutes in
substantial and unpredictable ways, and by the actions of the Federal Reserve
Board as it attempts to control the money supply and credit availability in
order to influence the economy.
PAYMENT OF DIVIDENDS AND OTHER RESTRICTIONS
The Company is a legal entity separate and distinct from its subsidiaries,
including the Subsidiary Banks. Accordingly, the right of the Company, and
thus the rights of the Company's creditors, to participate in any distribution
of the assets or earnings of any subsidiary other than in the Company's
capacity as a bona fide creditor of the subsidiary is necessarily subject to
the prior satisfaction of claims of creditors of the subsidiary.
There are various legal and regulatory limitations on the extent to which
the Company's subsidiaries, including its bank subsidiaries, can finance or
otherwise supply funds to the Company. The principal source of the Company's
cash revenues is dividends from its subsidiaries and there are certain legal
restrictions under federal and state law on the payment of dividends by such
subsidiaries. The prior approval of the Comptroller is required if the total
of all dividends declared by any national banking association in any calendar
year exceeds the bank's net income for that year combined with its retained
net income for the preceding two calendar years, less any required transfers
to surplus or a fund for the retirement of any preferred stock. In addition, a
dividend may not be paid in excess of a bank's "undivided profits then on
hand." The relevant regulatory agencies also have authority to prohibit a bank
holding company or a national banking association from engaging in what, in
the opinion of such regulatory body, constitutes an unsafe or unsound practice
in conducting its business. The payment of dividends could, depending upon the
financial condition of the subsidiary, be deemed to constitute such an unsafe
or unsound practice. In addition, the Subsidiary Banks and their subsidiaries
are subject to limitations under Section 23A of the Federal Reserve Act with
respect to extensions of credit to, investments in, and certain other
transactions with, the Company and its other subsidiaries. Furthermore, loans
and extensions of credit are also subject to various collateral requirements.
CAPITAL ADEQUACY
The federal bank regulatory agencies have adopted minimum risk-based and
leverage capital guidelines for United States banking organizations. The
minimum required risk-based capital ratio of qualifying total capital to risk-
weighted assets (including certain off-balance-sheet items, such as standby
letters of credit) is 8%, of which 4% must consist of Tier 1 capital. At March
31, 1997, the Company had a Tier 1 capital to risk-adjusted assets ratio of
15.71% and a total capital ratio of 18.75%. The minimum required leverage
capital ratio (Tier 1 capital to average total assets) is 3% for banking
organizations that meet certain specified criteria, including that they have
the highest regulatory rating. A higher leverage ratio may apply under certain
circumstances. At March 31, 1997, the Company's leverage capital ratio was
13.68%. Neither the Company nor any Subsidiary Bank has been advised by the
appropriate federal regulatory agency of any specific leverage ratio
applicable to it.
5
<PAGE>
Failure to meet capital guidelines can subject a banking organization to a
variety of enforcement remedies, including additional substantial restrictions
on its operations and activities, termination of deposit insurance by the
FDIC, and under certain conditions the appointment of a receiver or
conservator. Federal banking statutes establish five capital categories for
depository institutions ("well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized"), and impose significant restrictions on the operations of
an institution that is not at least adequately capitalized. Under certain
circumstances, an institution may be downgraded to a category lower than that
warranted by its capital levels, and subjected to the supervisory restrictions
applicable to institutions in the lower capital category. A depository
institution is generally prohibited from making capital distributions
(including paying dividends) or paying management fees to a holding company if
the institution would thereafter be undercapitalized. Adequately capitalized
institutions may accept brokered deposits only with a waiver from the FDIC,
while undercapitalized institutions may not accept, renew, or roll over
brokered deposits.
An undercapitalized depository institution is also subject to restrictions
in a number of areas, including asset growth, acquisitions, branching, new
lines of business, and borrowing from the Federal Reserve System. In addition,
an undercapitalized depository institution is required to submit a capital
restoration plan. A depository institution's holding company must guarantee
the capital plan up to an amount equal to the lesser of 5% of the depository
institution's assets at the time it becomes undercapitalized or the amount
needed to restore the capital of the institution to the levels required for
the institution to be classified as adequately capitalized at the time the
institution fails to comply with the plan and any such guarantee would be
entitled to a priority of payment in bankruptcy. A depository institution is
treated as if it is significantly undercapitalized if it fails to submit a
capital plan that is based on realistic assumptions and is likely to succeed
in restoring the depository institution's capital. Significantly
undercapitalized depository institutions may be subject to a number of
additional significant requirements and restrictions, including requirements
to sell sufficient voting stock to become adequately capitalized, to replace
or improve management, to reduce total assets, to cease acceptance of
correspondent bank deposits, to restrict senior executive compensation and to
limit transactions with affiliates. Critically undercapitalized depository
institutions are further subject to restrictions on paying principal or
interest on subordinated debt, making investments, expanding, acquiring or
selling assets, extending credit for highly-leveraged transactions, paying
excessive compensation, amending their charters or bylaws and making any
material changes in accounting methods. In general, a receiver or conservator
must be appointed for a depository institution within 90 days after the
institution is deemed to be critically undercapitalized.
SUPPORT OF SUBSIDIARY BANKS
Under Federal Reserve Board policy, the Company is expected to act as a
source of financial strength to, and to commit resources to support, each of
the Subsidiary Banks. This support may be required at times when, absent such
Federal Reserve Board policy, the Company may not have the resources to
provide it. Any capital loan by the Company to a Subsidiary Bank would be
subordinate in right of payment to deposits and certain other indebtedness of
the Subsidiary Bank. In the event of a bank holding company's bankruptcy, any
commitment by the bank holding company to a federal bank regulatory agency to
maintain the capital of a subsidiary bank will be assumed by the bankruptcy
trustee and entitled to a priority of payment.
A depository institution insured by the FDIC can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC in connection
with the default of a commonly controlled FDIC-insured depository institution
or any assistance provided by the FDIC to any commonly controlled, FDIC-
insured depository institution "in danger of default". "Default" is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions
indicating that a default is likely to occur in the absence of regulatory
assistance. Liability for the losses of commonly-controlled depository
institutions can lead to the failure of some or all depository institutions in
a holding company structure, if the remaining institutions are unable to pay
the liability assessed by the FDIC. Any obligation or liability owed by a
subsidiary bank to its parent company is subordinate to the subsidiary bank's
cross-guarantee liability for losses of commonly-controlled depository
institutions.
6
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The Company's consolidated ratio of earnings to fixed charges for each of
the periods indicated is set forth below:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEARS ENDED DECEMBER 31,
MARCH 31, ----------------------------
1997 1996 1995 1994 1993 1992
------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits..... 2.70x 2.78x 2.59x 3.16x 3.55x 3.22x
Including Interest on Deposits..... 1.65 1.64 1.57 1.69 1.73 1.49
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
represent net income plus applicable income taxes and fixed charges. Fixed
charges, excluding interest on deposits, represent interest expense on long-
term debt and short-term borrowings and the interest factor included in rents
(which is deemed to be one-third of rental expense). Fixed charges, including
interest on deposits, represent all interest expense and the interest factor
included in rents.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement (each, a
"Prospectus Supplement") setting forth the particular terms of the
Subordinated Debt Securities (the "Securities") to be offered, the net
proceeds from the sale of the Securities will be used for general corporate
purposes, principally to fund investments in, or extensions of credit to, the
Company's banking and nonbanking subsidiaries, including to allow its
subsidiaries to repay borrowings incurred by such subsidiaries. The precise
amount and timing of such investments in and extensions of credit to the
subsidiaries will depend upon their funding requirements and the availability
of other funds to the Company and its subsidiaries. If the Merger is
consummated, the Company may use all or a portion of the net proceeds from one
or more series of Securities to pay all or a portion of the cash consideration
payable in the Merger. In addition to the foregoing, the Company may also use
a portion of the net proceeds to fund possible acquisitions if suitable
opportunities develop in the future.
DESCRIPTION OF SECURITIES
The following sets forth certain general terms and provisions of the
Securities offered hereby. The particular terms of the Securities offered by
any Prospectus Supplement (the "Offered Securities") will be described in the
Prospectus Supplement relating to such Offered Securities. The Securities will
be issued under an Indenture, dated as of May 15, 1992 (the "Indenture"),
between the Company and Bankers Trust Company, as trustee (the "Trustee"). A
copy of the Indenture is included as an exhibit to the Registration Statement
of which this Prospectus is a part.
GENERAL
The following summaries of certain provisions of the Securities and the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Indenture,
including the definitions therein of certain terms. Wherever particular
Sections, Articles or defined terms of the Indenture is referred to, it is
intended that such Sections, Articles or defined terms shall be incorporated
herein by reference. Article and Section references used herein are references
to the Indenture. Capitalized terms not otherwise defined in this Prospectus
shall have the meanings given to them in the Indenture.
The Securities will be unsecured and will be subordinated and junior to all
Senior Indebtedness (as defined below under "Subordination of Securities").
The Indenture does not contain covenants prohibiting the Company from
disposing of voting stock of its subsidiaries, including the stock of any of
its banking subsidiaries.
7
<PAGE>
The Indenture does not limit the amount of Securities that may be issued
thereunder and provides that Securities may be issued thereunder from time to
time in one or more series (Section 3.1). Neither the Indenture nor the
Securities will limit or otherwise restrict the amount of other indebtedness
which may be incurred by the Company or any of its subsidiaries. In addition,
the Indenture and the Securities will not contain any provision that would
require the Company to repurchase or redeem or otherwise modify the terms of
the Securities upon a change in control or other events involving the Company
that may adversely affect the credit quality of the Company. Because the
Company is a holding company, its rights and the rights of its creditors,
including the holders of the Securities, to participate in the assets or
earnings of any subsidiary upon the liquidation or reorganization of such a
subsidiary will be subject to the prior claims of such subsidiaries' creditors
(including, in the case of a Subsidiary Bank, its depositors) except to the
extent that the Company may itself be a bona fide creditor of the subsidiary.
Claims on subsidiaries of the Company by creditors other than the Company
include claims with respect to long-term debt and substantial obligations with
respect to deposit liabilities, federal funds purchased, securities sold under
repurchase agreements and other short-term borrowings.
Unless otherwise indicated in the Prospectus Supplement relating to the
Offered Securities, principal of and premium, if any, and interest on the
Securities will be payable at the office or agency of the Trustee maintained
for such purpose in New York, New York, and at any other office or agency
maintained by the Company for such purposes, except that, at the option of the
Company, interest may be paid by mailing a check to the address of the person
entitled thereto as it appears on the Security Register. The transfer of
Securities (other than Book-Entry Securities) will be registrable for each
series of Securities at the corporate trust office of the Trustee. The
corporate trust offices of the Trustee are located in New York, New York.
Interest on the Securities will be payable to the person in whose name the
Securities are registered at the close of business on the Regular Record Date
designated for an Interest Payment Date (Section 3.7). If issued in
certificated form, the Securities will be issued only in fully registered form
without coupons and, unless otherwise indicated in the applicable Prospectus
Supplement, in denominations of $1,000 or integral multiples thereof (Section
3.2). No service charge will be required for any registration of transfer or
exchange of the Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith other than certain exchanges not involving any transfer (Section
3.5).
The applicable Prospectus Supplement will describe the following terms of
the Offered Securities: (a) the title of the Offered Securities; (b) any limit
on the aggregate principal amount of the Offered Securities; (c) the date or
dates on which the Offered Securities will mature; (d) the rate or rates
(which may be fixed or variable) per annum at which the Offered Securities
will bear interest, if any, the date or dates from which such interest, if
any, will accrue, the dates on which such interest, if any, will be payable
and the Regular Record Dates for such Interest Payment Dates; (e) the place or
places, if any, in addition to the office or agency of the Trustee, where the
principal of and premium, if any, and interest on the Offered Securities will
be payable; (f) the period or periods within which, the price or prices at
which and the terms and conditions upon which the Offered Securities may be
redeemed, in whole or in part, at the option of the Company; (g) the
obligation, if any, of the Company to redeem or purchase the Offered
Securities pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the price
or prices at which and the terms and conditions upon which Offered Securities
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation; (h) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Offered Securities will be
issuable; (i) the currency or currency unit of payment of principal of and
premium, if any, and interest on the Offered Securities if other than the
currency of the United States of America; (j) any index used to determine the
amount of payment of principal of, premium, if any, or interest on the Offered
Securities; (k) if other than the principal amount thereof, the portion of the
principal amount of the Offered Securities which will be payable upon the
declaration of acceleration of the Maturity thereof; (l) if the Offered
Securities are Global Securities, information with respect to book-entry
procedures, if any; (m) any other terms of the Offered Securities (Section
3.1); and (n) if applicable, a discussion of certain United States federal
income tax consequences.
8
<PAGE>
Securities may be issued as Original Issue Discount Securities to be offered
and sold at a substantial discount below their stated principal amount.
"Original Issue Discount Security" means any security which provides for an
amount less than the principal amount thereof to be due and payable upon the
declaration of acceleration of the Maturity thereof upon the occurrence of an
Event of Default and the continuation thereof. (Section 1.1)
GLOBAL SECURITIES
The Securities of a series may be issued in the form of one or more book-
entry securities in global form ("Global Securities") that will be deposited
with a Depositary or its nominee identified in the applicable Prospectus
Supplement (Section 3.1). In such a case, one or more Global Securities will
be issued in a denomination or aggregate denominations equal to the portion of
the aggregate principal amount of Outstanding Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Securities in definitive registered form, a
Global Security may not be transferred except as a whole by the Depositary for
such Global Security to a nominee of such Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee
of such successor. The specific terms of the depositary arrangement with
respect to any portion of a series of Securities to be represented by a Global
Security will be described in the applicable Prospectus Supplement.
The Company anticipates that the following provisions will apply to all
depositary arrangements. Upon the issuance of a Global Security, the
designated Depositary or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depositary ("participants"). Such accounts shall be
designated by the underwriters or agents with respect to such Securities or by
the Company if such Securities are offered and sold directly by the Company.
Participants include securities brokers and dealers, banks and trust
companies, clearing corporations and certain other organizations. Access to
the Depositary's system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants"). Persons who are not participants may beneficially own Global
Securities held by the Depositary only through participants or indirect
participants.
Ownership of beneficial interests in any Global Security will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the designated Depositary or its nominee (with respect to
interests of participants) and on the records of participants (with respect to
interests of indirect participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws, as well as the limits on participation in the
Depositary's book-entry system, may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary or its nominee is the registered owner of a Global
Security, such Depositary or such nominee will be considered the sole owner or
holder of the Securities represented by such Global Security for all purposes
under the Indenture. Except as provided below, owners of beneficial interests
in Securities represented by Global Securities will not be entitled to have
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
such Securities in definitive form, and will not be considered the owners or
holders thereof under the Indenture.
Payments of principal of and any premium and interest on Securities
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Security representing such Securities. The Company expects that the
Depositary for a series of Securities or its nominee, upon receipt of any
payment of principal, premium or interest, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Security
for such Securities, as shown on the records of such Depositary or its
nominee. The Company also expects that payments by participants and indirect
participants to owners of
9
<PAGE>
beneficial interests in such Global Security held through such persons will be
governed by standing instructions and customary practices, as is now the case
with securities registered in "street name," and will be the responsibility of
such participants and indirect participants. Neither the Company, the Trustee,
any Authenticating Agent, any Paying Agent nor the Security Registrar for such
Securities will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the Global Security for such Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests (Section 3.11).
If the Depositary for Securities of a series notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
ceases to be a clearing agency registered under the Exchange Act, and if the
Company has not appointed a successor depositary, then the Company will issue
Securities of such series in definitive registered form in exchange for the
Global Security representing such series of Securities. In addition, the
Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities and, in
such event, will issue Securities of such series in definitive registered form
in exchange for such Global Security or Securities representing such series of
Securities. Further, if the Company so specifies with respect to the
Securities of a series, or if an Event of Default, or an event which with
notice, lapse of time or both would be an Event of Default with respect to the
Securities of such series has occurred and is continuing, an owner of a
beneficial interest in a Global Security representing Securities of such
series may receive Securities of such series in definitive registered form. In
any such instance, an owner of a beneficial interest in a Global Security will
be entitled to physical delivery in definitive registered form of Securities
of the series represented by such Global Security equal in principal amount to
such beneficial interest and to have such Securities registered in its name
(Sections 3.5, 3.11). Securities so issued in definitive form will be issued
in denominations of $1,000 and integral multiples thereof and will be issued
in registered form only, without coupons.
RESTRICTIVE COVENANTS APPLICABLE TO SECURITIES
The Indenture contains a covenant that, with certain exceptions, the Company
will not directly or indirectly sell or permit to be issued any shares of
Voting Stock of a Major Constituent Bank (other than directors' qualifying
shares) or any securities convertible into or rights to subscribe to such
Voting Stock, unless, after giving effect to such transaction and to shares
issuable upon conversion or exercise of rights into such Voting Stock, at
least 80% of the outstanding shares of Voting Stock of each class of such
Major Constituent Bank shall be owned at the time, directly or indirectly, by
the Company (Section 10.6). The term "Major Constituent Bank" means any
Subsidiary Bank, the total assets of which constitute more than 30% of the
consolidated total assets of the Company and its Subsidiaries (Section 1.1).
At the date of this Prospectus, the only Subsidiary Bank which was a Major
Constituent Bank was The First National Bank of Maryland.
The Indenture also contains a covenant that the Company will not permit a
Major Constituent Bank to merge into or consolidate with, or to lease, sell,
assign or transfer all or substantially all of its properties or assets to,
any Person other than to the Company or to a Person the Voting Stock of which
is at least 80% owned by the Company (Section 10.7).
SUBORDINATION
The obligations of the Company to make any payment on account of the
principal of and premium, if any, and interest on the Subordinated Securities
will be subordinate and junior in right of payment to all Senior Indebtedness
of the Company (Article Thirteen).
"Senior Indebtedness" is defined in the Indenture to mean (a) all
indebtedness of the Company for money borrowed, whether now outstanding or
subsequently created, assumed or incurred, other than any indebtedness which
by its terms is expressly stated not to be superior in right of payment to the
Securities, and (b) any deferrals, renewals or extensions of any such Senior
Indebtedness. The term "indebtedness for money borrowed" means, when used with
respect to the Company, any obligation of, or any obligation guaranteed by,
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<PAGE>
the Company for repayment of borrowed money, whether or not evidenced by
bonds, debentures, notes or other written instruments, and any deferred
obligations for payment of the purchase price of property or assets acquired
other than in the ordinary course of business (Section 1.1). The Company's
outstanding 8 3/8% Subordinated Notes due 2002 in the aggregate principal
amount of $100 million and its 10 3/8% Subordinated Capital Notes due 1999 in
the aggregate principal amount of $60 million (together, "the Existing
Subordinated Notes") will rank on a parity with any of the Offered Securities.
The Company's Floating Rate Junior Subordinated Debentures due 2027 and its
Floating Rate Junior Subordinated Debentures due 2027, Series B, in the
aggregate principal amount of $300 million, will rank junior to any of the
Offered Securities.
The Securities will be subordinate in right of payment to all Senior
Indebtedness, as provided in the Indenture. No payment on account of the
principal of and premium, if any, or interest in respect of the Securities may
be made unless all amounts of principal, premium, if any, sinking funds and
interest then due on all Senior Indebtedness shall have been paid in full or
duly provided for and at the time of such payment pursuant to the Securities
or immediately thereafter, there shall not have occurred and be continuing a
default in payment with respect to Senior Indebtedness or an event of default
with respect to any Senior Indebtedness that would permit a holder thereof to
accelerate the maturity of such Senior Indebtedness. Upon any payment or
distribution of assets to creditors upon any insolvency, receivership,
conservatorship, reorganization, readjustment of debt, marshalling of assets
and liabilities or similar proceedings or any liquidation or winding-up of or
relating to the Company as a whole, whether voluntary or involuntary, the
holders of all Senior Indebtedness will first be entitled to receive payment
in full before the Holders of the Securities will be entitled to receive any
payment in respect of the principal of and premium, if any, sinking funds and
interest on the Securities. In the event the Holders of Securities receive
payment or distributions of assets of the Company and all Senior Indebtedness
has not been paid in full, then such payment or distribution shall be held in
trust for the benefit of the holders of Senior Indebtedness and shall be paid
over or delivered and transferred to the holders of Senior Indebtedness
(Section 13.3). By reason of such subordination, in the event of insolvency of
the Company, Holders of the Securities may recover less, ratably, than holders
of Senior Indebtedness.
EVENTS OF DEFAULT
The Indenture defines an "Event of Default" with respect to Securities of
any series as any one of the following events (whatever the reason and whether
it 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, and whether or not it be
occasioned by the subordination provisions of the Indenture): (a) failure to
pay any interest on any Security of that series when due and payable,
continued for 30 days; (b) failure to pay principal of or any premium on any
Security of that series when due; (c) failure to perform any other covenants
or warranties of the Company in the Indenture (other than a covenant included
in the Indenture solely for the benefit of a series of Securities thereunder
other than that series) continued for 90 days after written notice as provided
in the Indenture; (d) the entry of a decree or order for relief in respect of
the Company by a court having jurisdiction in the premises in an involuntary
case, or a decree or order adjudging the Company bankrupt or insolvent, or
approving as properly filed a petition seeking the reoganization of the
Company, under Federal or state bankruptcy laws and the continuance of any
such decree or order unstayed and in effect for a period of 90 consecutive
days; or (e) the commencement by the Company of a voluntary case under Federal
or state bankruptcy laws or the consent by the Company to the entry of a
decree or order for relief in an involuntary case under any such law (Section
5.1).
If an Event of Default with respect to Securities of a series occurs and is
continuing, then either the Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that series may,
or the Trustee if so directed by such Holders shall, declare the principal
amount (or, if the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms thereof) of all the Securities of that series to be due and payable
immediately. Upon the occurrence of an Event of Default described in clause
(d) or clause (e) of the first paragraph of this section, the principal of the
Securities of such series will become due and payable immediately, without any
action on the part of the Trustee or any Holder (Section 5.2).
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<PAGE>
At any time after a declaration of acceleration with respect to Securities
of any series has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority in aggregate
principal amount of Outstanding Securities of that series may, under certain
circumstances, rescind and annul such acceleration (Section 5.2).
In the event of a default in the payment of principal, premium, if any, or
interest, if any, or the performance of any covenant or agreement in the
Securities or the Indentures, the Trustee, subject to certain limitations and
conditions, may institute judicial proceedings to enforce payment of such
principal, premium, if any, or interest, if any, or to obtain the performance
of such covenant or agreement or any other proper remedy (Section 5.3). Under
certain circumstances, the Trustee may withhold notice to the Holders of the
Securities in a default if the Trustee in good faith determines that the
withholding of such notice is in the best interest of such Holders, and the
Trustee shall withhold such notice for certain defaults for a period of 30
days (Section 6.2).
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity (Section 6.3). Subject
to such provisions for the indemnification of the Trustee and to certain other
conditions, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of that series (Section 5.12).
No Holder of any series of Securities will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or trustee or for any remedy thereunder, unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default and unless the Holders of at least 25% in aggregate principal amount
of the Outstanding Securities of that series shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding
as trustee, and the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Outstanding Securities of that
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days (Section 5.7). However, such
limitations do not apply to a suit instituted by a Holder of a Security for
enforcement of payment of the principal of and premium, if any, or interest on
such Security on or after the respective due dates expressed in such Security
(Section 5.8).
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance (Section 10.8).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series issued
under the Indenture and affected by the modification or amendment; provided,
however, that no such modification or amendment may, without the consent of
the Holders of each Outstanding Security of the series affected thereby: (a)
change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security of such series, or reduce the
principal amount of or premium, if any, or interest on, any Security of any
series (including in the case of an Original Issue Discount Security the
amount payable upon acceleration of the maturity thereof), or change the place
or currency of payment of principal of or interest on any Security of such
series, or impair the right to institute suit for the enforcement of any
payment on any Security of such series on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date); or (b)
reduce the percentage in principal amount of Outstanding Securities of any
series, the consent of whose Holders is required for modification or amendment
of the Indenture or for waiver of compliance with certain provisions of the
Applicable Indenture or for waiver of certain defaults (Section 9.2).
12
<PAGE>
The Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of any series may, on behalf of all Holders of that
series of Securities, waive compliance by the Company with certain restrictive
provisions of the Applicable Indenture (Section 10.9). The Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series may, on behalf of all Holders of that series of Securities, waive any
past default under the Indenture, except a default in the payment of
principal, premium, if any, or interest and in respect of certain covenants
(Section 5.13).
CONSOLIDATION, MERGER AND SALE OF ASSETS
Under the Indenture, the Company may not consolidate with or merge into any
other Person or sell, convey, exchange, transfer or lease its properties and
assets substantially as an entirety to any Person, unless: (a) any successor
or purchaser is the Company or another corporation organized under the laws of
the United States, any state thereof or the District of Columbia; (b) any such
successor or purchaser expressly assumes the Company's obligations on such
Securities and under the Indentures; (c) immediately after giving effect to
such transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred
and be continuing; and (d) certain other conditions are met (Section 8.1).
TRUSTEE
Bankers Trust Company is the Trustee under the Indenture. Bankers Trust
Company maintains a deposit account and conducts other banking transactions
with the Company and its subsidiaries in the ordinary course of business, and
serves as trustee with respect to the Existing Subordinated Notes, which were
also issued under the Indenture. The Indenture provides for the
indemnification of the Trustee by the Company under certain circumstances.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters and also may sell
Securities directly to other purchasers or through agents.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they
may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act
as agents. Underwriters, dealers and agents that participate in the
distribution of Securities may be deemed to be underwriters, and any discounts
or commissions received by them and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Company will be described, in the applicable
Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
pursuant to delayed delivery contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension
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funds, investment companies, educational and charitable institutions and
others, but in all cases such institutions must be approved by the Company.
The obligations of any purchaser under any such contract will be subject to
the condition that the purchase of the Offered Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which
such purchaser is subject. The underwriters and such other agents will not
have any responsibility in respect of the validity or performance of such
contracts.
EXPERTS
The consolidated financial statements incorporated herein by reference from
the Company's Annual Report on Form 10-K for the years ended December 31, 1996
and 1995, except for the year ended December 31, 1994, have been audited by
Coopers & Lybrand L.L.P., independent auditors, as indicated in their report,
which is incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of the Company for the year ended
December 31, 1994, incorporated herein by reference, have been audited by KPMG
Peat Marwick LLP, independent auditors, as indicated in their report, which is
incorporated herein by reference, and are incorporated herein in reliance upon
the report of such firm given upon their authority as experts in accounting
and auditing.
The consolidated financial statements of Dauphin Deposit Company for the
year ended December 31, 1996 incorporated herein by reference from the
Company's Current Report on Form 8-K dated May 21, 1997, incorporated herein
by reference, have been audited by KPMG Peat Marwick LLP, independent
auditors, as indicated in their report, which is incorporated herein by
reference, and are incorporated herein in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing. Such
report contains an explanatory paragraph that states that Dauphin changed its
method of accounting for mortgage servicing rights and long-lived assets to
adopt the provisions of the Financial Accounting Standard Board's Statement of
Financial Accounting Standards No. 122, "Accounting for Mortgage Servicing
Rights, an amendment of FASB Statement No. 65," on January 1, 1995, and No.
121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets
to be Disposed of," on January 1, 1996.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Gregory K. Thoreson, Senior Vice President and General Counsel of the
Company, and for any underwriters or agents by Simpson Thacher &
Bartlett (a partnership which includes professional corporations), New York,
New York. As to matters of Maryland law, Simpson Thacher & Bartlett will rely
on the opinion of Mr. Thoreson.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMA-
TION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SE-
CURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCE, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
First Maryland Bancorp..................................................... S-2
Recent Events.............................................................. S-2
Use of Proceeds............................................................ S-2
Certain Terms of the Subordinated Notes.................................... S-3
Underwriting............................................................... S-6
Legal Matters.............................................................. S-7
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Recent Events.............................................................. 4
Certain Regulatory Considerations.......................................... 4
Ratio of Earnings to Fixed Charges......................................... 7
Use of Proceeds............................................................ 7
Description of Securities.................................................. 7
Plan of Distribution....................................................... 13
Experts.................................................................... 14
Legal Matters.............................................................. 14
</TABLE>
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$200,000,000
FIRST MARYLAND BANCORP
7.20% SUBORDINATED NOTES DUE JULY 1, 2007
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SALOMON BROTHERS INC
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