CONFORMED 1.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995 Commission file number 1-2940
HSBC Americas, Inc.
(Exact name of registrant as specified in its charter)
Delaware Corporation 22-1093160
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Marine Midland Center, Buffalo, N.Y. 14203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 841-2424
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
All voting stock (1,001 shares of Common Stock, $5 par value) is owned by HSBC
Holdings B.V., a wholly-owned indirect subsidiary of HSBC Holdings plc.
This report includes a total of 60 pages.
2.
Part I - FINANCIAL INFORMATION
Page
Item 1 - Financial Statements
Consolidated Balance Sheet
September 30, 1995 and December 31, 1994 3
Consolidated Statements of Income
For The Quarter and Nine Months
Ended September 30, 1995 and 1994 4
Consolidated Statement of Changes in
Shareholders' Equity For The Nine Months
Ended September 30, 1995 and 1994 5
Consolidated Statement of Cash Flows
For The Nine Months Ended
September 30, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 15
Signatures 16
6.
Notes to Consolidated Financial Statements
1. Basis of Presentation
HSBC Americas, Inc. (the Company) until October 1, 1995 was known as Marine
Midland Banks, Inc. The accounting and reporting policies of the Company and
its subsidiaries including its principal subsidiary, Marine Midland Bank,
conform to generally accepted accounting principles and to predominant
practice within the banking industry. Such policies, except as noted below,
are consistent with those applied in the presentation of the Company's annual
financial statements.
The interim financial information in this report has not been audited. In the
opinion of the Company's management, all adjustments necessary for a fair
presentation of financial position, results of operations and cash flows for
the interim periods have been made. The interim financial information should
be read in conjunction with the 1994 Annual Report on Form 10-K.
2. Pledged Financial Instruments
At September 30, 1995, securities, loans and other assets carried at
$2,364,870,000 were pledged as collateral for borrowings, to secure public
and trust deposits and for other purposes.
3. Significant Acquisition
The Company's results have been consolidated with Concord Leasing, Inc.
(Concord), which was merged into the Company on January 1, 1995 through the
contribution of Concord's outstanding common stock held by HSBC Holdings B.V.
to the Company. Concord provides equipment financing through loan and finance
lease transactions. Assets of Concord totaled $1.5 billion at December 31,
1994, including an aircraft exit portfolio of $428 million.
The merger transaction was accounted for as a transfer of assets between
companies under common control, with the assets and liabilities of Concord
combined with those of the Company at their historical carrying values. The
Company's consolidated financial statements reflect a restatement of prior
periods to include the accounts and results of operations of Concord as though
they had been combined as of the beginning of the earliest period presented.
4. New Accounting Standards
Effective January 1, 1995, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 114, Accounting by Creditors for Impairment
of a Loan (FAS 114) as amended by Statement of Financial Accounting Standards
No. 118, Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosures (FAS 118). FAS 114 applies to all loans, except large groups
of smaller-balance homogeneous loans that are collectively evaluated for
impairment (generally consumer loans), loans that are measured at fair value,
leases and debt securities. FAS 114 provides guidance in defining and
measuring loan impairment. A loan is considered impaired when, based on
current information and events, it is probable that a creditor will be unable
to collect all amounts due (principal and interest) according to the
contractual terms of the loan agreement. Impaired loans are measured at the
7.
present value of expected future cash flows, discounted at the loan's original
effective interest rate or, as a practical expedient, at the loan's observable
market price or the fair value of the collateral if the loan is collateral
dependent.
The adoption of FAS 114 had no impact upon the Company's financial condition
or results of operation except that insubstance foreclosed real estate (ISORE)
and insubstance foreclosed other assets are now classified as nonaccruing
loans. ISORE totaling $67 million and insubstance foreclosed other assets
totaling $3.2 million at December 31, 1994 have been reclassified to loans in
the accompanying 1994 balance sheet to reflect consistent presentation.
Interest income on impaired loans is recognized only to the extent of cash
received, with payments first applied to principal due.
The Company is required to adopt Statement of Financial Accounting Standards
No. 122, Accounting for Mortgage Servicing Rights (FAS 122), effective Janu-
ary 1, 1996. The Company does not expect that the adoption of FAS 122 will
have a material effect on its financial position or results of operation.
8.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
HSBC Americas, Inc. (the Company), formerly known as Marine Midland Banks,
Inc., reported third quarter net income of $76.6 million, compared with $48.2
million in the 1994 third quarter. For the first nine months of 1995, net
income was $210.9 million, compared with a net loss of $3.1 million for the
first nine months of last year. Net income in 1995 reflected improved net
interest income and lower operating expenses. Tax benefits of $86.0 million
were recognized in the first nine months of 1995 for the expected use of
Concord's net operating loss carryforward.
Net Interest Income
Net interest income for the third quarter of 1995 increased to $220.6 million
compared with $189.2 million for the third quarter of 1994. For the first
nine months of 1995, net interest income was $649.7 million compared with
$569.1 million for the first nine months of 1994.
Interest income of $373.5 million in the third quarter of 1995 was 22.0%
higher than the third quarter of 1994. Average earning assets of $17.3
billion for the third quarter of 1995 were 6.0% higher than a year ago. The
average rate earned on earning assets increased to 8.59% for the third quarter
of 1995 compared with 7.47% a year ago. Interest income of $1,088.0 million
for the first nine months of 1995 was 19.5% higher than the first nine months
of 1994. Average earning assets of $17.1 billion for the first nine months of
1995 were 1.6% higher than the first nine months of 1994. The average rate
earned on earning assets was 8.52% for the first nine months of 1995 compared
with 7.26% a year ago. The improvement in interest income is due to a number
of factors including increases in consumer and small and medium sized
commercial loans, a higher prime rate, lower nonaccruing loans and a better
yielding investment portfolio.
Interest expense for the third quarter of 1995 was $152.9 million,
representing a 30.7% increase over the third quarter of 1994. Average
interest bearing liabilities for the third quarter of 1995 were $13.6 billion,
compared with $12.5 billion a year ago. The average rate paid on interest
bearing liabilities was 4.47% compared with 3.71% a year ago. Interest
expense for the first nine months of 1995 was $438.3 million or 28.3% above
the first nine months of 1994. Average interest bearing liabilities for the
first nine months of 1995 were $13.4 billion, compared with $13.0 billion a
year ago. The average rate paid on interest bearing liabilities was 4.38% for
the first nine months of 1995 compared with 3.50% a year ago. The increase in
rate paid reflects a higher interest rate environment. Average outstanding
balances in domestic interest bearing deposits increased by $1.6 billion
during the first nine months of 1995 over 1994 while borrowed funds declined.
The taxable equivalent net yield on average total assets for the third quarter
of 1995 was 4.74%, compared with 4.33% a year ago. The taxable equivalent net
yield on average total assets for the first nine months of 1995 was 4.75%,
compared with 4.25% a year ago.
9.
Other Operating Income
For the third quarter of 1995, total other operating income was $81.5 million,
compared with $77.9 million in the 1994 third quarter. For the first nine
months of 1995, total other operating income was $239.7 million, compared with
$218.4 million for the first nine months of 1994. The major variance in other
operating income was an improvement in trading revenues which were $1.4
million in the third quarter of 1995 compared with a loss of $.6 million
during the same period in 1994. For the first nine months of 1995 trading
revenue was $4.2 million compared with a loss of $14.4 million during the same
period of 1994 primarily due to improved stability in the money markets.
Other Operating Expenses
Other operating expenses were $168.1 million in the 1995 third quarter
compared with $190.0 million for the 1994 third quarter. Other operating
expenses were $494.3 million for the first nine months of 1995 compared with
$567.2 million a year ago. Expenses for the third quarter of 1995 have been
reduced by $7.9 million as a result of a refund received from the FDIC
relating to its premium rate reduction for the period June 1995 to September
1995.
Operating expenses in the first nine months of 1994 included a $29.8 million
provision to cover the estimated costs of a voluntary early retirement
program.
Income Taxes
Contemplated in the merger of Concord and the Company was the availability of
net operating loss carryforwards and other temporary deductible differences of
Concord that can be used to offset future taxable income of the Company. At
December 31, 1994, Concord had net deferred tax assets of approximately $206
million resulting from loss carryforwards and deductible differences, which
were offset in full by a valuation allowance due to the uncertainty of Concord
realizing the tax benefits on a stand-alone basis. As a result of the merger,
Concord's net deferred tax asset of $73.5 million was recognized in the first
quarter of 1995 reflecting management's judgement that such asset was now more
likely than not to be realized.
During the third quarter of 1995, the Company's effective tax rate was further
reduced as a result of a decrease in the valuation reserve attributable to
deductible losses relating to Concord assets.
The deferred tax asset at September 30, 1995 was $96 million, net of valuation
reserve of $298 million.
10.
Asset Quality
The following tables provides a summary of the loan loss allowance and
nonaccruing loans.
<TABLE>
<CAPTION>
3rd 3rd 9 Months Year 9 Months
Quarter Quarter Ended Ended Ended
1995 1994 9/30/95 12/31/94 9/30/94
(in millions)
<S>
Allowance for Loan Losses
Balance at beginning <C> <C> <C> <C> <C>
of period $488.9 $541.4 $495.4 $473.3 $473.3
Allowance related to
acquired companies - - - 1.2 -
Provision charged to
income (recovery) 18.0 (.9) 155.0 150.6 137.2
Net charge offs 6.8 2.9 150.3 129.7 72.9
Balance at end of period $500.1 $537.6 $500.1 $495.4 $537.6
September 30, December 31, September 30,
1995 1994 1994
(in millions)
<S>
Nonaccruing Loans <C> <C> <C>
Balance at end of period $411.9 $855.4 $904.0
As a percent of loans
outstanding 3.13% 6.62% 7.21%
Nonperforming Loans and Assets*
Balance at end of period $524.3 $881.8 $941.8
As a percent of total assets 2.67% 4.72% 5.02%
*Includes nonaccruing loans, other real estate and other owned assets.
Allowance Ratios
Allowance for loan losses as a
percent of:
Loans 3.80% 3.84% 4.29%
Nonaccruing loans 121.42 57.92 59.47
</TABLE>
Provisions for loan losses were $18.0 million in the third quarter of 1995
compared with a recovery of $.9 million in the third quarter of 1994.
Provisions for loan losses for the first nine months of 1995 were $155.0
million compared with $137.2 million during the first nine months of 1994.
Nonaccruing loans were $411.9 million at September 30, 1995 compared with
$443.4 million at June 30, 1995 and $855.4 million at December 31, 1994.
The Company identified impaired loans as defined by FAS 114 totaling $358
million at September 30, 1995, of which $135 million had a specific loan loss
allowance of $74 million. No interest income was recognized on impaired loans
during the first nine months of 1995.
11.
Other owned assets totaled $100 million, $8 million and $22 million at
September 30, 1995, December 31, 1994 and September 30, 1994, respectively.
Other owned assets include foreclosed assets and other equipment previously
held under lease financing contracts recorded at fair value.
The Company has outstanding loans in highly leveraged transactions ("HLT").
An HLT occurs when credit is extended or investment is made involving the
buyout, acquisition, or recapitalization of an existing business resulting in
a high leverage ratio. Total committed amounts as of September 30, 1995 in
this category of loans were $173 million, including outstandings of $141
million, compared with commitments of $216 million, including outstandings of
$138 million at December 31, 1994. At September 30, 1995, $15 million of
these loans were on nonaccrual status, compared with $17 million at
December 31, 1994.
Derivative Financial Instruments
As principally an end-user of off-balance sheet financial instruments, the
Company uses various derivative financial instruments to manage its overall
interest rate risk and to reduce the risk associated with changes in the
income stream of certain on-balance sheet assets. At September 30, 1995,
$18.3 billion notional value of such positions, with an estimated positive
fair value of approximately $26.1 million were outstanding.
The Company also maintains various derivatives in its trading portfolio to
offset risk associated with changes in market value of certain trading assets,
and to satisfy the foreign currency requirements of retail customers. These
derivatives are carried at fair value. At September 30, 1995, $1.2 billion
notional value of such positions with an estimated negative fair value of $.9
million were outstanding.
The Company's credit risk associated with off-balance sheet positions is not
considered material, since almost all derivative contracts are executed with
counterparties affiliated through common ownership.
Liquidity
The Company maintains a strong liquidity position. Short-term investments and
trading assets were $2.4 billion at September 30, 1995 compared with $2.2
billion at December 31, 1994. Loans at September 30, 1995 were 67.0% of total
assets compared with 69.1% at December 31, 1994.
Deposits at September 30, 1995 were $14.8 billion, compared with $13.8 billion
at December 31, 1994. Deposits continue to exceed loans and were 112.6% of
loans at September 30, 1995. Short-term borrowings, including repurchase
agreements, were $2.1 billion at September 30, 1995 compared with $2.3 billion
at December 31, 1994. Long-term borrowings of $.7 billion at September 30,
1995 were at the same level as December 31, 1994.
12.
Capital
Shareholders' equity was $1.7 billion at September 30, 1995 compared with $1.5
billion at December 31, 1994.
Under risk-based capital guidelines, the Company's capital ratios were 11.29%
at the Tier 1 level and 17.11% at the total capital level at September 30,
1995. These ratios compare with 10.93% at the Tier 1 level and 17.25% at the
total capital level at December 31, 1994.
Under guidelines for leverage ratios, the Company's ratio of Tier 1 capital to
quarterly average total assets was 9.04% at September 30, 1995 compared with
8.16% at December 31, 1994.
15.
Part II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
(3) a. Registrant's Restated Certificate of Incorporation and
Amendments thereto
b. Registrant's By-Laws, as Amended to Date
(b) Report on Form 8-K
A current report on Form 8-K dated October 2, 1995 was filed with
the Securities and Exchange Commission on October 2, 1995,
reporting that the Company had changed its name from Marine
Midland Banks, Inc. to HSBC Americas, Inc.
16.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HSBC Americas, Inc.
(Registrant)
Date: November 1, 1995 /s/ Gerald A. Ronning
Gerald A. Ronning
Executive Vice President & Controller
(On behalf of Registrant and
as Chief Accounting Officer)
<TABLE>
<CAPTION>
3.
CONSOLIDATED BALANCE SHEET HSBC AMERICAS, INC.
September 30, December 31,
dollars in thousands 1995 1994 *
- -------------------------------------------------------------------------
<S>
ASSETS <C> <C>
Cash and due from banks $ 1,078,738 $ 1,050,558
Interest bearing deposits with banks 1,060,020 1,231,757
Federal funds sold and securities purchased
under resale agreements 769,700 599,993
Trading assets 537,539 404,300
Securities held to maturity (market value
$2,644,528 and $1,907,650) 2,626,453 1,967,638
Securities available for sale 74,067 80,232
Loans 13,154,908 12,914,445
Less - allowance for loan losses 500,128 495,434
- -------------------------------------------------------------------------
Loans, net 12,654,780 12,419,011
Premises and equipment 176,606 185,211
Customers' acceptance liability 23,854 24,746
Accrued interest receivable 160,314 124,967
Other real estate and other owned assets 112,470 26,381
Other assets 364,460 583,517
- -------------------------------------------------------------------------
TOTAL ASSETS $ 19,639,001 $ 18,698,311
=========================================================================
LIABILITIES
Deposits in domestic offices:
Noninterest bearing $ 3,077,812 $ 3,213,845
Interest bearing 10,203,585 9,660,674
Interest bearing deposits in foreign offices 1,527,441 909,629
- -------------------------------------------------------------------------
Total deposits 14,808,838 13,784,148
Federal funds purchased and securities sold
under repurchase agreements 1,582,899 729,169
Other short-term borrowings 524,910 1,526,720
Interest, taxes and other liabilities 281,785 420,435
Acceptances outstanding 23,854 24,746
Long-term debt 710,237 713,104
- -------------------------------------------------------------------------
TOTAL LIABILITIES 17,932,523 17,198,322
- -------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Preferred stock 98,063 98,063
Common shareholder's equity:
Common stock 5 5
Capital surplus 1,531,127 1,531,127
Retained earnings (accumulated deficit) 77,283 (129,206)
- -------------------------------------------------------------------------
Total common shareholder's equity 1,608,415 1,401,926
- -------------------------------------------------------------------------
Total shareholders' equity 1,706,478 1,499,989
- -------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 19,639,001 $ 18,698,311
=========================================================================
* Restated to include the accounts and results of Concord Leasing, Inc.
merged with the Company on January 1, 1995.
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<TABLE>
<CAPTION>
4.
CONSOLIDATED STATEMENT OF INCOME HSBC AMERICAS, INC.
Quarter ended Nine months ended
dollars in thousands September 30 September 30
- ------------------------------------------------------------------------------
1995 1994 * 1995 1994 *
<S>
Interest income: <C> <C> <C> <C>
Loans $ 307,710 $ 255,785 $ 891,493 $ 745,397
Securities 36,906 22,734 102,901 72,922
Trading assets 9,030 11,413 23,702 46,749
Deposits with banks 13,170 8,093 38,810 28,562
Federal funds sold and
purchased under resale
agreements 6,660 8,044 31,070 17,180
- --------------------------------------------------------------------------------
Total interest income 373,476 306,069 1,087,976 910,810
- --------------------------------------------------------------------------------
Interest expense:
Deposits:
In domestic offices 102,804 72,257 288,909 197,702
In foreign offices 19,294 5,976 50,861 17,798
Federal funds purchased and
securities sold under
repurchase agreements 9,737 2,793 21,386 15,106
Other short-term borrowings 8,532 15,929 38,813 46,027
Long-term debt 12,518 19,981 38,321 65,099
- --------------------------------------------------------------------------------
Total interest expense 152,885 116,936 438,290 341,732
- --------------------------------------------------------------------------------
Net interest income 220,591 189,133 649,686 569,078
Provision for loan
losses (recovery) 18,000 (855) 155,000 137,207
- --------------------------------------------------------------------------------
Net interest income, after
provision for loan losses 202,591 189,988 494,686 431,871
- --------------------------------------------------------------------------------
Other operating income:
Trust income 11,162 11,006 34,065 35,760
Service charges 21,274 20,924 62,702 62,121
Mortgage servicing income 3,769 4,692 12,654 14,215
Other fees and commissions 31,097 31,646 91,439 96,853
Trading revenues (loss) 1,420 (542) 4,251 (14,359)
Other income 12,765 10,250 34,625 23,859
- --------------------------------------------------------------------------------
Total other operating income 81,487 77,976 239,736 218,449
- --------------------------------------------------------------------------------
284,078 267,964 734,422 650,320
- --------------------------------------------------------------------------------
Other operating expenses:
Salaries 72,339 72,082 211,741 214,667
Pension and other employee
benefits 15,823 16,667 54,829 59,167
- --------------------------------------------------------------------------------
Total personnel expense 88,162 88,749 266,570 273,834
Net occupancy expense 20,056 18,853 55,238 54,232
Other expenses 59,889 82,410 172,519 239,126
- --------------------------------------------------------------------------------
Total other operating expenses 168,107 190,012 494,327 567,192
Provision for ORE and other
owned asset losses 3,466 - 5,101 -
- --------------------------------------------------------------------------------
Total operating expenses after
provision for ORE and other
owned assets 171,573 190,012 499,428 567,192
- --------------------------------------------------------------------------------
Income before taxes 112,505 77,952 234,994 83,128
Applicable income tax expense 35,900 29,700 24,100 86,200
- --------------------------------------------------------------------------------
Net income $ 76,605 $ 48,252 $ 210,894 $ (3,072)
================================================================================
* Restated to include the accounts and results of Concord Leasing, Inc.
merged with the Company on January 1, 1995.
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<TABLE>
<CAPTION>
5.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY HSBC AMERICAS,INC.
-------------------------------------------------------------------------------
Nine months ended September 30
dollars in thousands 1995 1994 *
-------------------------------------------------------------------------------
<S> <C> <C>
At beginning of period $ 1,499,989 $ 1,438,705
Net income (loss) 210,894 (3,072)
Capital contribution from parent - 25,000
Cash dividends declared on preferred stock (4,405) (4,405)
Cash dividends declared on common stock - (50,000)
-------------------------------------------------------------------------------
At end of period $ 1,706,478 $ 1,406,228
===============================================================================
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine months ended September 30
-------------------------------------------------------------------------------
dollars in thousands 1995 1994 *
Cash flows from operating activities:
Net income (loss) $ 210,894 $ (3,072)
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation, amortization and deferred taxes (70,990) 49,986
Provision for loan losses 155,000 137,207
Net change in other accrual accounts (150,379) 117,822
Net change in loans originated for sale (63,112) 193,280
Net change in trading assets 12,400 1,099,992
Other, net (88,474) 1,247
-------------------------------------------------------------------------------
Net cash provided (used) by operating activities 5,339 1,596,462
-------------------------------------------------------------------------------
Cash flows from investing activities:
Net change in interest bearing deposits with banks 171,737 765,439
Net change in federal funds sold and
securities purchased under resale agreements (169,707) (1,094,848)
Purchases of securities (1,192,004) (153,156)
Sales of securities 24,292 18,006
Maturities of securities 527,604 416,871
Net change in credit card receivables (140,916) (105,704)
Net change in other short-term loans 12,312 (51,788)
Net originations and maturities of long-term loans (310,869) (650,951)
Expenditures for premises and equipment (12,306) (11,357)
Other, net 111,570 71,045
-------------------------------------------------------------------------------
Net cash provided (used) by investing activities (978,287) (796,443)
-------------------------------------------------------------------------------
Cash flows from financing activities:
Net change in deposits 1,024,690 946,356
Net change in federal funds purchased and
securities sold under repurchase agreement 853,730 (920,255)
Net change in other short-term borrowings
and acceptances (872,840) (493,218)
Repayment of long-term debt (47) (500,294)
Capital contribution from parent - 25,000
Dividends paid (4,405) (54,405)
-------------------------------------------------------------------------------
Net cash provided (used) by financing activities 1,001,128 (996,816)
-------------------------------------------------------------------------------
Net change in cash and due from banks 28,180 (196,797)
Cash and due from banks at beginning of period 1,050,558 1,088,520
-------------------------------------------------------------------------------
Cash and due from banks at end of period $ 1,078,738 $ 891,723
===============================================================================
* Restated to include the accounts and results of Concord Leasing, Inc.
merged with the Company on January 1, 1995.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
13.
CONSOLIDATED AVERAGE BALANCES AND INTEREST RATES* HSBC AMERICAS, INC.
Third Quarter 1995 Third Quarter 1994**
----------------------- ----------------------
Balance Interest Rate Balance Interest Rate
- ----------------------------------------------------------------------------
dollars in millions
<S>
Assets
Interest bearing deposits <C> <C> <C> <C> <C> <C>
with banks $ 862 $ 13.2 6.07 % $ 703 $ 8.0 4.57 %
Federal funds sold and
securities purchased
under resale agreements 439 6.7 6.02 682 8.1 4.68
Trading assets 534 9.1 6.79 745 11.5 6.12
Securities:
U.S. Government and
federal agency obligations 2,187 33.5 6.09 1,426 19.1 5.36
Other securities 237 3.4 5.79 269 3.6 5.29
- ----------------------------------------------------------------------------
Total securities 2,424 36.9 6.06 1,695 22.7 5.35
Loans:
Domestic:
Commercial 6,400 145.5 9.02 6,390 117.4 7.30
Consumer 6,119 154.1 10.02 5,545 131.0 9.42
- ----------------------------------------------------------------------------
Total domestic 12,519 299.6 9.51 11,935 248.4 8.28
International 532 9.1 6.76 575 9.0 6.21
- ----------------------------------------------------------------------------
Total loans 13,051 308.7 9.39 12,510 257.4 8.16
- ----------------------------------------------------------------------------
Total earning assets 17,310 $ 374.6 8.59 % 16,335 $ 307.7 7.47 %
- ----------------------------------------------------------------------------
Less - allowance for loan
losses (492) (537)
Cash and due from banks 909 925
Other assets 845 744
- ----------------------------------------------------------------------------
Total assets $ 18,572 $ 17,467
============================================================================
Liabilities and Shareholders' Equity
Interest bearing demand
deposits $ 1,588 $ 7.7 1.92 % $ 1,592 $ 6.8 1.71 %
Consumer savings deposits 3,727 31.3 3.33 3,943 27.2 2.74
Other consumer time deposits 3,152 45.0 5.66 2,352 27.1 4.57
Commercial and public savings
and other time deposits 1,750 18.8 4.27 1,382 11.0 3.17
Deposits in foreign offices 1,482 19.3 5.16 552 6.1 4.29
- ----------------------------------------------------------------------------
Total time deposits 11,699 122.1 4.14 9,821 78.2 3.16
- ----------------------------------------------------------------------------
Short-term borrowings 1,147 18.3 6.32 1,425 18.9 5.21
Long-term debt 711 12.5 6.99 1,264 20.0 6.27
- ----------------------------------------------------------------------------
Total funds borrowed 1,858 30.8 6.58 2,689 38.9 5.71
- ----------------------------------------------------------------------------
Total interest bearing
liabilities 13,557 $ 152.9 4.47 % 12,510 $ 117.1 3.71 %
- ----------------------------------------------------------------------------
Interest rate spread 4.12 % 3.76 %
- ----------------------------------------------------------------------------
Demand deposits 3,032 2,995
Other liabilities 315 550
Total shareholders' equity 1,668 1,412
- ----------------------------------------------------------------------------
Total liabilities and
shareholders' equity $ 18,572 $ 17,467
============================================================================
Net interest income $ 221.7 $ 190.6
Net yield on average earning assets 5.08 % 4.63 %
Net yield on average total assets 4.74 4.33
- ----------------------------------------------------------------------------
Net interest income/net yield on average earning assets:
Domestic $ 210.7 5.24 % $ 184.7 4.92 %
International 11.0 3.23 5.9 1.75
============================================================================
* Interest and rates are presented on a taxable equivalent basis.
**Restated to include the accounts and results of Concord Leasing, Inc.
merged with the Company on January 1, 1995.
</TABLE>
<TABLE>
<CAPTION>
14.
CONSOLIDATED AVERAGE BALANCES AND INTEREST RATES HSBC AMERICAS, INC.
Nine Months 1995 Nine Months 1994**
------------------------ ----------------------
Balance Interest Rate Balance Interest Rate
- -----------------------------------------------------------------------------
dollars in millions
<S>
Assets
Interest bearing deposits <C> <C> <C> <C> <C> <C>
with banks $ 837 $ 38.8 6.20 % $ 981 $ 28.5 3.89 %
Federal funds sold and
securities purchased
under resale agreements 686 31.1 6.06 560 17.2 4.10
Trading assets 452 23.8 7.01 1,135 46.8 5.50
Securities:
U.S. Government and
federal agency obligations 2,053 94.2 6.13 1,491 60.7 5.44
Other securities 208 8.8 5.65 306 12.3 5.36
- -----------------------------------------------------------------------------
Total securities 2,261 103.0 6.08 1,797 73.0 5.42
Loans:
Domestic:
Commercial 6,356 419.5 8.82 6,459 344.9 7.14
Consumer 5,992 446.9 9.97 5,364 378.8 9.42
- -----------------------------------------------------------------------------
Total domestic 12,348 866.4 9.38 11,823 723.7 8.18
International 542 28.3 6.98 555 25.1 6.05
- -----------------------------------------------------------------------------
Total loans 12,890 894.7 9.28 12,378 748.8 8.09
- -----------------------------------------------------------------------------
Total earning assets 17,126 $ 1,091.4 8.52 % 16,851 $ 914.3 7.26 %
- -----------------------------------------------------------------------------
Less - allowance for loan
losses (504) (507)
Cash and due from banks 896 929
Other assets 854 753
- -----------------------------------------------------------------------------
Total assets $18,372 $ 18,026
=============================================================================
Liabilities and Shareholders' Equity
Interest bearing demand
deposits $ 1,578 $ 22.8 1.93 % $ 1,589 $ 18.8 1.58 %
Consumer savings deposits 3,759 91.0 3.24 3,989 75.8 2.54
Other consumer time deposits 3,028 123.6 5.46 2,214 73.9 4.46
Commercial and public savings
and other time deposits 1,643 51.5 4.19 1,384 29.1 2.81
Deposits in foreign offices 1,390 50.9 4.89 654 17.9 3.64
- -----------------------------------------------------------------------------
Total time deposits 11,398 339.8 3.99 9,830 215.5 2.93
- -----------------------------------------------------------------------------
Short-term borrowings 1,271 60.2 6.33 1,802 61.2 4.54
Long-term debt 712 38.3 7.20 1,410 65.1 6.17
- -----------------------------------------------------------------------------
Total funds borrowed 1,983 98.5 6.64 3,212 126.3 5.25
- -----------------------------------------------------------------------------
Total interest bearing
liabilities 13,381 $ 438.3 4.38 % 13,042 $ 341.8 3.50 %
- -----------------------------------------------------------------------------
Interest rate spread 4.14 % 3.76 %
- -----------------------------------------------------------------------------
Demand deposits 3,013 3,060
Other liabilities 377 480
Total shareholders' equity 1,601 1,444
- -----------------------------------------------------------------------------
Total liabilities and
shareholders' equity $18,372 $ 18,026
=============================================================================
Net interest income $ 653.1 $ 572.5
Net yield on average earning assets 5.10 % 4.54 %
Net yield on average total assets 4.75 4.25
- -----------------------------------------------------------------------------
Net interest income/net yield on average earning assets:
Domestic $ 619.0 5.27 % $ 554.9 4.87 %
International 34.1 3.20 17.6 1.43
=============================================================================
*Interest and rates are presented on a taxable equivalent basis.
**Restated to include the accounts and results of Concord Leasing, Inc.
merged with the Company on January 1, 1995.
</TABLE>
RESTATED CERTIFICATE OF INCORPORATION 17.
OF
HSBC AMERICAS, INC.
HSBC Americas, Inc. a corporation organized and
existing under the laws of the State of Delaware (the
"Corporation"), hereby certifies as follows:
1. The name of the Corporation is HSBC Americas, Inc.
HSBC Americas, Inc. was originally incorporated under the name
of Marine Midland Corporation, and the original Certificate of
Incorporation of the Corporation was filed with the Secretary of
State of the State of Delaware on September 23, 1929.
2. Pursuant to Sections 242 and 245 of the General
Corporation Law of the State of Delaware, this Restated
Certificate of Incorporation restates and integrates and also
further amends the provisions of the Certificate of Incorporation
of this Corporation, and has been duly adopted in accordance with
Sections 228, 242, and 245 of the General Corporation Law of the
State of Delaware pursuant to a written consent adopted by the
sole holder of all outstanding shares of common stock, par value
$5.00 per share, of the Corporation.
3. The text of the Restated Certificate of
Incorporation as heretofore amended or supplemented is hereby
restated and further amended to read in its entirety as follows:
First: The name of this corporation is HSBC Americas, Inc.
Second: Its registered office in the State of Delaware
is located at 32 Loockerman Square, Suite L-100, Dover, Kent
County, Delaware. The name and address of its registered agent
is The Prentice-Hall Corporation System, Inc., 32 Loockerman
Square, Suite L-100, Dover, Kent County, Delaware 19901.
Third: The nature of the business and the objects and
purposes proposed to be transacted, promoted and carried on, are
to do any or all of the things herein mentioned as fully and to
the same extent as natural persons might or could do in any part
of the world as set forth below. (Wherever used in this Article
Third, the expression "evidence of indebtedness" or "evidences of
indebtedness" shall mean and include, without limiting its
generality, any and all bonds, debentures, notes, coupons,
mortgages, commercial paper and/or any other instruments
evidencing indebtedness, however created, issued or granted and
whether fully paid or subject to further payments; and the
expression "certificate of interest," or "certificates of
interest" shall mean and include, without limiting its
generality, any and all certificates or shares of stock, scrip, 18.
interim receipts, participation certificates, voting trust
certificates, subscription warrants, option warrants and/or any
other instruments evidencing interest in share capital or other
property, however created, issued or granted and whether fully
paid or subject to further payments.)
(1) To acquire by purchase, subscription,
contract or otherwise, hold for investment or
otherwise, own, sell, exchange, mortgage, pledge or
otherwise dispose of, and generally deal in and with
evidences of indebtedness and/or certificates of
interest issued or created in any and all parts of the
world by banks, trust companies, financial institutions
of every kind and description, corporations,
associations, partnerships, firms, trustees,
syndicates, individuals, governments, states,
municipalities or other political or governmental
divisions or subdivisions, or by any combinations,
organizations or entities whatsoever, irrespective of
their form or the name by which they may be described,
and to issue in exchange therefor or in payment
thereof, in any manner permitted by law, its own
evidences of indebtedness and/or certificates of
interest, or to make payment therefor by any other
lawful means of payment whatsoever; and to exercise any
and all of said powers, either on its own account, or
with or as agent for other persons, firms, corporations
or organizations.
(2) To receive, collect and dispose of interest,
dividends and income upon, of and from any evidence of
indebtedness or certificate of interest and any other
property held or owned by it, and to exercise any and
all rights, powers and privileges of individual
ownership or interest in respect of any and all such
evidences of indebtedness or certificates of interest,
including the right to vote thereon for any and all
purposes.
(3) To endorse or guarantee the payment of
principal and/or interest or dividends upon, and to
guarantee the performance of sinking fund or other
obligations of, any evidences of indebtedness or
certificates of interest, and to guarantee the
performance of any of the contracts or other
undertakings in which the corporation may otherwise be
or become interested, of any corporation, association,
partnership, firm, trustee, syndicate, individual,
government, state, municipality or other political or
governmental division or subdivision, domestic or
foreign, in so far as may be permitted by law to a
corporation of this character.
(4) To enter into, make, perform and carry out or 19.
cancel and rescind contracts relating to or
underwritings of evidences of indebtedness or
certificates of interest, of any corporation,
association, partnership, firm, trustee, syndicate,
individual, government, state, municipality or other
political or governmental division or subdivision,
domestic or foreign, or of any combination,
organization, or entity, domestic or foreign, and to
act as manager of any underwriting or purchasing or
selling syndicate.
(5) To lend money, whether or not secured by
mortgages or other liens on real estate or personal
property, and to negotiate and make, either as
principal or broker or agent, contracts or other
agreements in connection therewith.
(6) To borrow money with or without security, to
make, accept, endorse, guarantee, execute and issue
evidences of indebtedness and to secure the same by a
mortgage, pledge, deed of trust, other lien or
otherwise, upon all or any part of the property of the
corporation, wherever situated.
(7) To act as agent or representative of
individuals, firms and corporations, and as such to
develop and extend the business interests of
individuals, firms and corporations.
(8) To purchase, hold, sell and transfer the
shares of its own capital stock, provided it shall not
use its funds or property for the purchase of its own
shares of capital stock when such use would cause any
impairment of its capital, and provided that shares of
its own capital stock belonging to it shall not be
voted upon, directly or indirectly, but nothing in this
subdivision shall be construed as limiting the exercise
of the rights given by Section 243 of the General
Corporation Law of the State of Delaware.
(9) To take, lease, purchase or otherwise acquire
and to own, use, hold, sell, convey, lease, exchange,
mortgage, improve, develop, cultivate and otherwise
handle, deal in and dispose of real estate, real
property and any interest or right therein.
(10) To purchase, manufacture, acquire, hold,
own, mortgage, pledge, lease, sell, assign and
transfer, and to invest, trade, deal in and with goods,
wares, merchandise, patents, trade-marks, rights,
privileges, franchises, grants and property of every
kind and description; to carry on any of the above
businesses or any other business connected therewith,
wherever the same may be permitted by law, and to the 20.
same extent as the laws of this State will permit and
as fully and with all the powers that the laws of this
State confer upon corporations and organizations under
the General Corporation Law of the State of Delaware.
(11) To acquire and take over as a going concern
and/or carry on the business of any person, firm,
association or corporation engaged in any business
which this corporation is authorized to carry on.
(12) To render service, assistance, counsel and
advice to any person, firm, association or corporation
in the conduct of his or its business.
(13) To do all and everything necessary, suitable
and proper for the accomplishment of any of the
purposes or the attainment of any of the objects or the
furtherance of any of the powers hereinbefore set
forth, either as principal or agent, either alone or
associated with other corporations or with firms or
individuals, and either directly or indirectly through
one or more subsidiary company or companies organized
or utilized for the purpose, and to do any other act or
acts, thing or things, incidental or pertaining to or
growing out of, or connected with the aforesaid
business, or powers, or any parts thereof, provided the
same be not inconsistent with the law under which this
corporation is organized.
(14) The business or purpose of the corporation
is from time to time to do any one or more acts and
things herein set forth; and it may conduct such
business in all its branches or any part thereof either
within or outside the State of Delaware, and in other
states and territories and dependencies of the United
States and in foreign countries.
The foregoing enumeration of specific powers shall not
be deemed to limit or restrict in any manner the general powers
of the corporation and the enjoyment and exercise thereof as
conferred by the laws of the State of Delaware upon corporations
formed under the General Corporation Law of said State, and the
doing of any or all the things hereinbefore set forth to the same
extent as natural persons might or could do; but this corporation
shall not, by any implication or construction, be deemed to
possess the power of issuing bills, notes, or other evidences of
debt for circulation as money, or the power of carrying on the
business of receiving deposits of money, or the business of
buying gold and silver bullion or foreign coins.
Fourth: The total number of shares of all classes of
stock which the Corporation shall have authority to issue is ten
million, fifty thousand, two hundred, fifty-eight (10,050,258)
shares of which forty-nine thousand, one hundred, fifty-eight 21.
(49,158) shares without par value are to be of a class designated
Cumulative Preferred Stock, ten million (10,000,000) shares of
the par value of $1.00 each are to be designated Preferred Stock
and one thousand, one hundred (1,100) of the par value of $5.00
each are to be of a class designated Common Stock.
The designations and the voting powers, preferences,
and relative, participating, optional and other special rights of
the Cumulative Preferred Stock and the Common Stock, and the
qualifications, limitations and restrictions thereof, are as
follows:
1. Issue of Cumulative Preferred Stock in Series.
The Cumulative Preferred Stock shall be issued from time to time
in series as hereinafter provided. All shares of Cumulative
Preferred Stock, regardless of series, shall be of equal rank
with each other and shall be identical with each other in all
respects except as provided in this Article Fourth; and the
shares of Cumulative Preferred Stock of any one series shall be
identical with each other in all respects except as to the dates
from and after which dividends thereon shall be cumulative.
2. $5.50 Convertible Preferred Stock. There is
hereby established a first series of Cumulative Preferred Stock,
which shall consist (and shall not be increased to a number in
excess) of 24,579 shares. Such first series shall have the
designation, voting powers, preferences and rights, and the
qualifications, limitations and restrictions thereof, which are
set forth in this Article Fourth in respect of the Cumulative
Preferred Stock of all series and in addition, the following:
(a) The designation of such first series of
Cumulative Preferred Stock shall be "$5.50 Convertible Preferred
Stock" (hereinafter called the $5.50 Preferred Stock).
(b) The dividend rate for the $5.50 Preferred
Stock shall be $5.50 per share per annum, and the date from and
after which dividends on each share of the $5.50 Preferred Stock
shall be cumulative is the date of issue of the $5.50 Preferred
Stock.
(c) The $5.50 Preferred Stock may not be redeemed
prior to the fifth anniversary of the date of issue thereof. On
and after such anniversary the $5.50 Preferred Stock shall be
redeemable at the option of the corporation at the following
respective redemption prices per share during the year commencing
on the indicated anniversary of the above-mentioned date of
issue:
<TABLE>
<CAPTION>
Redemption Redemption
Price Per Price Per
Anniversary Share Anniversary Share
<S> <C> <S> <C>
Fifth . . . . .$105.00 Tenth . . . .$102.50 22.
Sixth . . . . . 104.50 Eleventh . . 102.00
Seventh . . . . 104.00 Twelfth . . . 101.50
Eighth . . . . 103.50 Thirteenth . 101.00
Ninth . . . . . 103.00 Fourteenth . 100.50
</TABLE>
and thereafter at the redemption price of $100.00 per share,
plus, in each case, an amount equal to all accrued and unpaid
dividends thereon to the date fixed for redemption.
(d) In the event of any liquidation, dissolution
or winding up of the affairs of the corporation, the holders of
the $5.50 Preferred Stock then outstanding shall be entitled to
receive out of the assets of the corporation, before any
distribution or payment shall be made to the holders of any
junior stock, (i) if such liquidation, dissolution or winding up
shall be voluntary, (A) prior to the second anniversary of the
date of issue of the $5.50 Preferred Stock, $111.00 per share or
(B) thereafter and prior to the fifth anniversary of the date of
issue of the $5.50 Preferred Stock, $105.00 per share or (C) on
or after such fifth anniversary, an amount equal to the
redemption price set forth in paragraph (c) of this subdivision 2
then in effect, and (ii) if such liquidation, dissolution or
winding up shall be involuntary, the amount of $100.00 per share,
plus, in each case, an amount equal to all accrued and unpaid
dividends thereon to the date fixed for payment of such
distributive amounts.
(e) So long as any shares of the $5.50 Preferred
Stock shall be outstanding, the corporation shall not, without
the consent, given in writing or by resolution adopted at a
meeting duly called for that purpose, of the holders of record of
at least a majority of that number of shares of the $5.50
Preferred Stock then outstanding, reduce its capital in respect
of the $5.50 Preferred Stock below an amount equal to $100 times
the number of shares of the $5.50 Preferred Stock then
outstanding.
3. Provisions Applicable to all Series of Cumulative
Preferred Stock. The voting powers, preferences and rights, and
the qualifications, limitations and restrictions thereof,
applicable to the Cumulative Preferred Stock of all series, are
as follows:
(a) Dividends on Cumulative Preferred Stock. The
holders of the Cumulative Preferred Stock of each series shall be
entitled to receive, in preference to the holders of any junior
stock, when and as declared by the Board of Directors, but only
out of net profits or net assets of the corporation legally
available for the payment of dividends, cumulative cash dividends
at the annual rate for such series fixed in this Article FOURTH,
and no more, payable on the first days of January, April, July,
and October in each year (such days being herein called "dividend
payment dates" and the quarterly periods ending on such days
being herein called "dividend periods"), to stockholders of 23.
record on the respective dates, which shall be the same dates for
all series, fixed for the purpose by the Board of Directors in
advance of payment of each particular dividend. The holders of
shares of the Cumulative Preferred Stock shall not be entitled to
receive any dividends thereon other than the dividends referred
to in this paragraph (a).
No dividends shall be paid upon, or declared or set
apart for, any share of Cumulative Preferred Stock of any series
for any dividend period unless at the same time a like
proportionate dividend for the same dividend period, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall be paid upon, or declared and set apart for, all
shares of Cumulative Preferred Stock of all series then issued
and outstanding and entitled to receive such dividend.
(b) Dividends on Junior Stock. So long as any
shares of the Cumulative Preferred Stock shall be outstanding,
the corporation will not declare or pay any dividend on any
junior stock (other than dividends payable solely in junior
stock) or make any other distribution of any sort, either
directly or indirectly, in respect of any junior stock or make
any payment on account of the purchase, redemption or other
acquisition of any junior stock, unless, at the date of such
declaration in the case of a dividend or at the date of such
distribution or other payment
(i) all cumulative dividends on the then
outstanding shares of Cumulative Preferred Stock
for all past dividend periods shall have been paid
or declared and a sum sufficient for the payment
thereof set apart; and
(ii) after giving effect, as if paid, to the
proposed dividend, distribution or payment, the
aggregate amount of all such dividends,
distributions and payments declared or made after
December 31, 1963 does not exceed the sum of
(A) Consolidated Net Operating Income
from December 31, 1963 to such date of
declaration, distribution or payment,
(B) the net proceeds to the
corporation, valued where other than cash by
the Board of Directors, from the issuance or
sale after June 30, 1964 of any shares of
junior stock and of any convertible
securities (other than junior stock) which
have been converted into junior stock, and
(C) $17,000,000.
Subject to the foregoing provisions of this 24.
paragraph (b), such dividends (payable in cash, stock or
otherwise) as may be determined by the Board of Directors may be
declared and paid on any junior stock from time to time out of
the net profits or net assets of the corporation legally
available therefor, and the Cumulative Preferred Stock shall not
be entitled to participate in any such dividends.
(c) Redemption of Cumulative Preferred Stock.
Subject to the provisions of paragraph (d) of this subdivision 3,
the corporation at its option (expressed by resolution of the
Board of Directors) may (except as provided in subdivision 2 in
respect of the $5.50 Preferred Stock) redeem the outstanding
shares of Cumulative Preferred Stock, or of any series thereof,
at any time in whole, or from time to time in part, upon notice
duly given as hereinafter specified, at the applicable redemption
price or prices for such shares fixed in subdivision 2 of this
Article Fourth, plus, in each case, an amount equal to all
accrued and unpaid dividends thereon to the date fixed for
redemption. Notice of every such redemption of Cumulative
Preferred Stock, in form approved by the Board of Directors,
shall be given by mailing such notice not less than thirty nor
more than sixty days prior to the date fixed for such redemption
to each holder of record of shares so to be redeemed at his
address as the same shall appear on the books of the corporation.
In case of redemption of a part only of the Cumulative Preferred
Stock of any series at the time outstanding, the redemption may
be either pro rata or by lot, as determined by the Board of
Directors. Subject to the foregoing, the Board of Directors
shall have full power and authority to prescribe the manner in
which the drawings by lot or the pro rata redemption shall be
conducted and the terms and conditions upon which the Cumulative
Preferred Stock shall be redeemed from time to time.
If any such notice of redemption shall have been duly
given, then, from and after the date fixed in such notice as the
redemption date (unless default be made by the corporation in
providing funds for the payment of the redemption price, and
accrued and unpaid dividends to the date fixed for redemption),
notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation, all
shares so called for redemption shall no longer be deemed
outstanding on and after such redemption date, and the right to
receive dividends thereon and all other rights with respect to
such shares shall forthwith on such redemption date cease and
terminate, except only the right of the holders thereof to
receive the amount payable on redemption thereof, without
interest.
If any such notice of redemption shall have been duly
given or if the corporation shall have given to the bank or trust
company hereinafter referred to irrevocable written authorization
promptly to give or complete such notice, and if on or before the
redemption date specified therein the funds necessary for such
redemption shall have been deposited by the corporation with a 25.
bank or trust company designated in such notice, doing business
in the Borough of Manhattan, the City of New York, State of New
York, and having a capital, surplus and undivided profits
aggregating at least $5,000,000 according to its last published
statement of condition, in trust for the pro rata benefit of the
holders of the shares so called for redemption, then,
notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation, from
and after the time of such deposit all shares so called for
redemption shall no longer be deemed outstanding and all rights
with respect to such shares shall forthwith cease and terminate,
except only the right of the holders thereof to receive from such
bank or trust company at any time after the time of such deposit
the funds so deposited, without interest, and the right to
exercise, before the date fixed for redemption, all privileges of
conversion or exchange, if any, not theretofore expired. Any
interest accrued on such funds shall be paid to the corporation
from time to time. Any funds so deposited and unclaimed at the
end of six years from such redemption date shall be repaid to the
corporation, after which the holders of the shares so called for
redemption shall look only to the corporation for payment
thereof; provided that any funds so deposited which shall not be
required for redemption because of the exercise of any privilege
of conversion or exchange subsequent to the date of deposit shall
be repaid to the corporation forthwith.
None of the shares of Cumulative Preferred Stock of any
series redeemed pursuant to the foregoing provisions or converted
into or exchanged for other shares of the corporation or
purchased or otherwise acquired by the corporation shall be
reissued, and the corporation may from time to time take such
appropriate corporate action as may be necessary to eliminate
such shares from its authorized capital stock.
(d) Limitation of Right to Redeem or Purchase
Cumulative Preferred Stock. If and so long as all cumulative
dividends on the outstanding shares of Cumulative Preferred Stock
of all series for all past dividend periods shall not have been
paid or declared and a sum sufficient for the payment thereof set
apart, the corporation shall not redeem less than all of the
Cumulative Preferred Stock at the time outstanding, and neither
the corporation nor any subsidiary shall purchase or otherwise
acquire for value any of the Cumulative Preferred Stock at the
time outstanding unless such purchase or other acquisition shall
be pursuant to tenders called for on at least twenty days'
previous notice by mail to all the holders of record of the
Cumulative Preferred Stock at their respective addresses as the
same shall appear on the books of the corporation, and the shares
so purchased or otherwise acquired shall be those tendered at the
lowest prices pursuant to such call for tenders; provided,
however, that if some, but less than all, of the shares tendered
at a particular price are to be purchased or otherwise acquired
pursuant to such call for tenders, the number of shares to be
purchased or acquired from each holder who has tendered shares at 26.
such price shall be in the proportion which the number of shares
he has tendered at such price bears to the total number of shares
tendered at such price.
(e) Voting Rights. Except as otherwise provided
by law and as otherwise provided in this Article Fourth, and
subject to the provisions of the by-laws of the corporation, as
from time to time amended, with respect to the closing of the
transfer books and the fixing of a record date for the
determination of stockholders entitled to vote, the holders of
the Common Stock shall exclusively possess voting power for the
election of directors and for all other purposes, and the holders
of the Cumulative Preferred Stock shall have no voting power and
shall not be entitled to any notice of any meeting of
stockholders; provided, however, that if at the time of the
giving of notice of any annual meeting of stockholders for the
election of directors a default in preferred dividends, as
hereinafter defined, shall exist, the holders of the Cumulative
Preferred Stock, voting separately as a class and without regard
to series, shall have the right at such annual meeting to elect
two members of the Board of Directors but shall not be entitled
to vote in the election of any of the other directors of the
corporation, and the holders of the Common Stock, voting
separately as a class, shall be entitled to elect the remaining
members of the Board of Directors but shall not be entitled to
vote in the election of the two directors of the corporation so
to be elected by the holders of the Cumulative Preferred Stock.
Any director elected by the holders of the Cumulative Preferred
Stock, voting as a class as aforesaid, together with each
director elected to fill a vacancy in the office of a Preferred
Director as hereinafter provided (hereinafter called a "Preferred
Director"), shall continue to serve as such director until the
next annual meeting of stockholders and until his successor shall
be elected and qualified, notwithstanding that prior to the end
of such term a default in preferred dividends shall cease to
exist. Any Preferred Director may be removed with or without
cause by, and shall not be removed except by, the vote of the
holders of the Cumulative Preferred Stock, voting separately as a
class without regard to series, at a meeting of stockholders or
at a meeting of the holders of shares of Cumulative Preferred
Stock called for the purpose. So long as a default in preferred
dividends shall exist (i) any vacancy in the office of a
Preferred Director may, except as provided in the following
clause (ii), be filled for the unexpired term by the remaining
Preferred Director or, if there shall at the time be no Preferred
Director in office, by the remaining members of the Board of
Directors, and (ii) in the case of the removal of any Preferred
Director, the vacancy may be filled for the unexpired term by the
vote of the holders of the Cumulative Preferred Stock, voting
separately as a class without regard to series, at the same
meeting at which such removal shall be voted or at any subsequent
meeting. So long as there is a Preferred Director in office (i)
if there shall be an executive or similar committee of the Board
of Directors, at least one Preferred Director shall be a member 27.
of such committee, (ii) notice of each special meeting of the
Board of Directors shall be given to each Preferred Director not
less than three days by mail or one day by telegraph or telephone
prior to the meeting, and (iii) notice of each special meeting of
the executive or similar committee of the Board of Directors, if
any, shall be given to each Preferred Director who is a member
thereof not less than three days by mail or one day by telegraph
or telephone prior to the meeting. Preferred Directors need not
be stockholders. For the purposes of this paragraph (e), a
default in preferred dividends shall be deemed to have occurred
whenever at the time of giving of notice of any annual meeting of
stockholders for the election of directors the amount of accrued
and unpaid dividends upon any shares of any series of the
Cumulative Preferred Stock shall be equivalent to four quarterly
dividends or more, and, having so occurred, such default in
preferred dividends shall be deemed to exist thereafter until,
but only until, all cumulative dividends on all shares of
Cumulative Preferred Stock then outstanding, of each and every
series, for all past dividend periods shall have been paid or
declared and set apart for payment. Nothing herein contained
shall be deemed to prevent an amendment of the by-laws of the
corporation, in the manner therein provided, which shall increase
the number of directors of the corporation so as to provide
additional places on the Board of Directors for either one or
both of the two directors so to be elected by the holders of the
Cumulative Preferred Stock, or so as to increase the number of
directors to be elected by the holders of the Common Stock, or to
prevent any other change in the number of the directors of the
corporation.
So long as a default in preferred dividends shall exist
(i) the presence in person or by proxy of the holders of twenty-
five percent of the outstanding shares of the Cumulative
Preferred Stock, considered as a class without regard to series,
shall be (except as provided above in respect of the filling of a
vacancy caused by the removal of a Preferred Director) required
to constitute a quorum of such class at any meeting of
stockholders or at any meeting of the holders of shares of
Cumulative Preferred Stock called for the purpose of electing a
Preferred Director or Preferred Directors; provided, however,
that a majority of the holders of the Cumulative Preferred Stock
who are present in person or represented by proxy at any such
meeting at which there shall be no quorum of such class shall
have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, solely for the
purpose of electing a Preferred Director or Preferred Directors
at an adjourned session of such meeting at which there shall be a
quorum of such class; and (ii) the presence in person or by proxy
of the holders of a majority (or such lesser number as may at the
time be specified in the by-laws of the corporation) of the
outstanding shares of Common Stock shall be required to
constitute a quorum of such class at any meeting of stockholders
at which the holders of the Common Stock, voting as a class
aforesaid, shall be entitled to vote for the election of 28.
directors of the corporation. No delay or failure by the holders
of the Cumulative Preferred Stock to elect a Preferred Director
shall invalidate the election of the members of the Board of
Directors elected by the holders of the Common Stock. Holders of
Cumulative Preferred Stock shall be entitled to notice of each
meeting of stockholders at which they shall have the right to
elect a Preferred Director, such notice to be mailed to such
holders at least 10 days prior to such meeting.
Each stockholder entitled to vote at any particular
time in accordance with the provisions of this Article Fourth
shall have one vote for each share of stock held of record by him
and at the time entitled to voting power.
(f) Restrictions on Certain Capital Changes. So
long as any shares of the Cumulative Preferred Stock of any
series shall be outstanding, the corporation shall not, without
the consent, given in writing or by resolution adopted at a
meeting duly called for that purpose, of the holders of record of
at least two-thirds of the number of shares of the Cumulative
Preferred Stock of all series then outstanding, considered as a
class without regard to series,
(i) create or issue any shares of any new
class of stock ranking prior to the Cumulative
Preferred Stock or alter or change the
designations or the voting powers, preferences or
rights, or the qualifications, limitations or
restrictions thereof, of the Cumulative Preferred
Stock or of any series thereof; provided, however,
that any such alteration or change of the
designations or of the voting powers, preferences
or rights, or the qualifications, limitations or
restrictions thereof, of any particular series of
the Cumulative Preferred Stock which does not
affect the holders of the Cumulative Preferred
Stock of any other series may be effected with the
consent, given as aforesaid, of the holders of
record of at least two-thirds of the number of
shares of the particular series of Cumulative
Preferred Stock affected by such alteration or
change; and provided, further, that nothing in
this clause (i) shall require the vote or consent
of the holders of the Cumulative Preferred Stock
for or in respect of the creation or increase in
the authorized number of shares of any junior
stock or any stock (other than the Cumulative
Preferred Stock) ranking on a parity with the
Cumulative Preferred Stock; or
(ii) create or issue any shares of any new
class of stock ranking on a parity with the
Cumulative Preferred Stock, unless, after giving
effect to the issue of such shares, (A) the sum of 29.
(1) the aggregate par value (or stated value in
the case of shares without par value) of all
outstanding shares of stock of the corporation,
(2) the aggregate amount of the surplus (whether
capital, earned or other) and the contingency or
other surplus reserves of the corporation, all as
determined in accordance with generally accepted
accounting principles applicable to banks and bank
holding companies, and (3) the sum of the combined
reserves for possible loan losses and other
valuation reserves of the constituent banks, as
determined in accordance with generally accepted
accounting principles applicable to banks, will be
at least 250% of the aggregate par value (or
stated value in the case of shares without par
value) of all shares of the Cumulative Preferred
Stock and all shares of stock of the corporation
of every other class ranking prior to or on a
parity with the Cumulative Preferred Stock, and
(B) the Consolidated Net Operating Income earned
during the three calendar years immediately
preceding such issue shall have averaged at least
four times the annual dividend requirements on all
shares of Cumulative Preferred Stock and all
shares of stock of the corporation of every other
class ranking prior to or on a parity with the
Cumulative Preferred Stock which will be
outstanding.
(g) Rights on Liquidation. In the event of any
liquidation, dissolution or winding up of the affairs of the
corporation, the holders of the Cumulative Preferred Stock of
each series shall be entitled to receive out of the assets of the
corporation, before any distribution or payment shall be made to
the holders of any junior stock, the amount per share specified
in this Article FOURTH with respect thereto, and the holders of
the junior stock shall be entitled, to the exclusion of the
holders of the Cumulative Preferred Stock of any and all series,
to share ratably in all the remaining assets of the corporation
in accordance with their respective rights. If upon any
liquidation, dissolution or winding up of the affairs of the
corporation the assets available for distribution shall be
insufficient to pay the holders of all outstanding shares of
Cumulative Preferred Stock the full amounts to which they
respectively shall be entitled, the holders of shares of
Cumulative Preferred Stock of all series shall share ratably in
any distribution of assets in accordance with the sums which
would be payable on such distribution if all sums payable were
paid in full. Neither the consolidation or merger of the
corporation with or into any other corporation, nor any sale,
lease or conveyance of all or any part of the property or
business of the corporation, shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the corporation
within the meaning of this paragraph (g). 30.
(h) Preemptive Rights. No holder of Cumulative
Preferred Stock of any series shall be entitled as such, as a
matter of right, to subscribe for or purchase any part of any new
or additional issue of stock of any class whatsoever, or of
obligations or other securities convertible into, or exchangeable
for, any stock of any class whatsoever, whether now or hereafter
authorized and whether issued for cash or other consideration or
by way of dividend.
4. Definitions. For all purposes of this Article
Fourth:
The term "accrued and unpaid dividends" when used with
reference to any share of any series of the Cumulative Preferred
Stock shall mean (whether or not in any dividend period there
shall have been net profit or net assets of the corporation
legally available for the payment of dividends) an amount
computed at the annual dividend rate for the shares of such
series from the date on which dividends on such share become
cumulative to and including the date to which such dividends are
to be accrued, less the aggregate amount of all dividends
theretofore paid on such share; but no interest shall be payable
upon any arrearages.
The term "Board of Directors" shall mean the Board of
Directors of the corporation.
The term "Consolidated Net Operating Income" shall mean
the consolidated net operating income of the corporation, the
constituent banks and such subsidiaries the accounts of which are
in fact consolidated with those of the corporation in its annual
report to stockholders, all as determined from time to time in
accordance with generally accepted accounting principles
applicable to banks and bank holding companies.
The term "constituent banks" shall mean all commercial
banks and trust companies, whether organized under Federal or
State law, at least a majority of the shares of voting stock of
which shall at the time be owned, directly or indirectly, by the
corporation or by one or more subsidiaries or by the corporation
and one or more subsidiaries.
The term "junior stock", when used with reference to
the Cumulative Preferred Stock, shall mean the Common Stock and
any other stock of the corporation, now or hereafter authorized,
over which the Cumulative Preferred Stock has preference or
priority either in the payment of dividends or in the
distribution of assets upon any liquidation, dissolution or
winding up of the affairs of the corporation.
The term "stock ranking on a parity with the Cumulative
Preferred Stock" shall mean any stock of the corporation, now or
hereafter authorized, which has preference on a parity with the 31.
Cumulative Preferred Stock either in the payment of dividends or
in the distribution of assets upon any liquidation, dissolution
or winding up of the affairs of the corporation.
The term "stock ranking prior to the Cumulative
Preferred Stock" shall mean any stock of the corporation, now or
hereafter authorized, which has preference over the Cumulative
Preferred Stock either in the payment of dividends or in the
distribution of assets upon any liquidation, dissolution or
winding up of the affairs of the corporation.
The term "subsidiary" shall mean any corporation,
association or business trust at least a majority of the shares
of the voting stock of which shall at the time be owned, directly
or indirectly, by the corporation or by one or more subsidiaries
or by the corporation and one or more subsidiaries.
The term "voting stock", as applied to the stock (or
the equivalent thereof, in the case of corporations incorporated
outside the continental limits of the United States of America)
of any corporation, shall mean stock (or such equivalent) of any
class or classes, however designated, having ordinary voting
power for the election of a majority of the directors of such
corporation, other than stock (or such equivalent) having such
power only by reason of the happening of a contingency.
5. Class Voting. Except as otherwise required by law
or by the provisions of the Certificate of Incorporation, the
vote of the holders of all or any portion of any class of stock,
as a class, shall not be required for any action whatsoever to be
taken or authorized by the stockholders of the corporation,
including any amendment of the Certificate of Incorporation.
6. Preferred Stock. The Preferred Stock may be
issued from time to time in one or more series and with such
designation for each such series as shall be stated and expressed
in the resolution or resolutions providing for the issue of each
such series adopted by the Board of Directors. The Board of
Directors in any such resolution or resolutions is expressly
authorized to state and express for each such series:
(i) the voting powers, if any, of the
holders of stock of such series;
(ii) the rate per annum and the times at and
conditions upon which the holders of stock of such
series shall be entitled to receive dividends, and
whether such dividends shall be cumulative or non-
cumulative and if cumulative the terms upon which
such dividends shall be cumulative;
(iii) the price or prices and the time or
times at and the manner in which the stock of such
series shall be redeemable; 32.
(iv) the terms, if any, upon which shares of
stock of such series shall be convertible into, or
exchangeable for, shares of stock of any other
class or classes or of any other series of the
same or any other class or classes; including the
price or prices or the rate or rates of conversion
or exchange and the terms of adjustment, if any;
(v) the rights to which the holders of the
shares of stock of such series shall be entitled
upon any voluntary or involuntary liquidation,
dissolution or winding up of the corporation,
provided, however, that in no event shall they be
entitled to receive upon any such liquidation,
dissolution or winding up more than $120 per
share, plus in respect of each such share a sum
computed at the annual dividend rate for such
series from and after the date on which dividends
on such shares become cumulative to and including
the date fixed for such payment, less the
aggregate of dividends theretofore paid thereon;
and
(vi) any other designations, preferences and
relative, participating, optional or other special
rights, and qualifications, limitations or
restrictions thereof so far as they are not
inconsistent with the provisions of the
certificate of incorporation, as amended, and to
the full extent now or hereafter permitted by the
laws of Delaware, provided, however, that in no
event shall any series of Preferred Stock rank
prior to the Cumulative Preferred Stock.
7. Adjustable Rate Cumulative Preferred Stock, Series
A. Pursuant to authority conferred by this Article Fourth on
the Board of Directors of the corporation, the Board of
Directors, pursuant to a Certificate of Designations filed in the
Office of the Secretary of State of the State of Delaware on
March 7, 1983, established a series of Preferred Stock of the
corporation ("Preferred Stock") to consist of 2,000,000 shares.
Such series has the voting powers, designation, preferences and
relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions, in addition to
those set forth in this Article Fourth in respect of the
Preferred Stock of all series as follows:
(a) Designation. The designation of this
series of Preferred Stock shall be "Adjustable
Rate Cumulative Preferred Stock, Series A"
(hereinafter called this "Series") and the number
of shares constituting this Series is Two Million
(2,000,000). The number of authorized shares of 33.
this Series may be reduced by further resolution
duly adopted by the Board of Directors of the
corporation and by the filing of a certificate
pursuant to the provisions of the General
Corporation Law of the State of Delaware stating
that such reduction has been so authorized, but
the number of authorized shares of this Series
shall not be increased.
(b) Dividend Rate.
(1) Dividend rates on the shares of
this Series shall be: (i) for the periods
(the "Initial Dividend Periods") (A) from the
date of their original issue to and including
March 31, 1983, (B) from April 1, 1983 to and
including June 30, 1983, and (C) from July 1,
1983 to and including September 30, 1983, at
a rate per annum of 10% on the liquidation
preference thereof, and (ii) for each
quarterly dividend period (hereinafter
referred to as a "Quarterly Dividend Period";
and any Initial Dividend Period or any
Quarterly Dividend Period being hereinafter
individually referred to as a "Dividend
Period" and collectively referred to as
"Dividend Periods") thereafter, which
quarterly dividend periods shall commence on
January 1, April 1, July 1 and October 1 in
each year and shall end on and include the
day next preceding the first day of the next
Quarterly Dividend Period, at a rate per
annum on the liquidation preference thereof
equal to the Applicable Rate (as defined in
paragraph (2) of this Section (b)) in respect
of such Quarterly Dividend Period. Such
dividends shall be cumulative from the date
of original issue of such shares and shall be
payable, when and as declared by the Board of
Directors or by a committee of said Board
duly authorized by said Board to declare such
dividends, on January 1, April 1, July 1, and
October 1 of each year, commencing April 1,
1983. Each such dividend shall be paid to
the holders of record of shares of this
Series as they appear on the stock register
of the corporation on such record date, not
exceeding 30 days preceding the payment date
thereof, as shall be fixed by the Board of
Directors of the corporation or by a
committee of said Board of Directors duly
authorized to fix such date. Dividends on
account of arrears for any past Dividend
Periods may be declared and paid at any time, 34.
without reference to any regular dividend
payment date, to holders of record on such
date, not exceeding 30 days preceding the
payment date thereof, as may be fixed by the
Board of Directors of the corporation or by a
committee of said Board of Directors duly
authorized to fix such date.
(2) Except as provided below in
this paragraph, the "Applicable Rate"
for any Quarterly Dividend Period shall
be (a) 2% less than (b) the highest of
the Treasury Bill Rate, the Ten Year
Constant Maturity Rate and the Twenty
Year Constant Maturity Rate (each as
hereinafter defined) for such Dividend
Period. In the event that the
corporation determines in good faith
that for any reason
(i) any one of the Treasury
Bill Rate, the Ten Year Constant
Maturity Rate and the Twenty Year
Constant Maturity Rate cannot be
determined for any Quarterly
Dividend Period, then the
Applicable Rate for such Dividend
Period shall be 2% less than the
higher of whichever two of such
Rates can be so determined;
(ii) only one of the Treasury
Bill Rate, the Ten Year Constant
Maturity Rate and the Twenty Year
Constant Maturity Rate can be
determined for any Quarterly
Dividend Period, then the
Applicable Rate for such Dividend
Period shall be 2% less than
whichever such Rate can be so
determined; or
(iii) None of the Treasury Bill
Rate, the Ten Year Constant
Maturity Rate and the Twenty Year
Constant Maturity Rate can be
determined for any Quarterly
Dividend Period, then the
Applicable Rate in effect for the
preceding Dividend Period shall be
continued for such Dividend Period.
Anything herein to the contrary notwithstanding,
the Applicable Rate for any Quarterly Dividend 35.
Period shall in no event be less than 6% per annum
or greater than 12% per annum.
(3) Except as provided below in
this paragraph, the "Treasury Bill Rate"
for each Quarterly Dividend Period shall
be the arithmetic average of the two
most recent weekly per annum market
discount rates (or the one weekly per
annum market discount rate, if only one
such rate shall be published during the
relevant Calendar Period (as defined
below)) for three-month U.S. Treasury
bills, as published weekly by the
Federal Reserve Board during the
Calendar Period immediately prior to the
last ten calendar days of March, June,
September or December, as the case may
be, prior to the Quarterly Dividend
Period for which the dividend rate on
this Series is being determined. In the
event that the Federal Reserve Board
does not publish such a weekly per annum
market discount rate during such
Calendar Period, then the Treasury Bill
Rate for such Dividend Period shall be
the arithmetic average of the two most
recent weekly per annum market discount
rates (or the one weekly per annum
market discount rate, if only one such
rate shall be published during the
relevant Calendar Period) for three-
month U.S. Treasury bills, as published
weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S.
Government department or agency selected
by the corporation. In the event that a
per annum market discount rate for
three-month U.S. Treasury bills shall
not be published by the Federal Reserve
Board or by any Federal Reserve Bank or
by any U.S. Government department or
agency during such Calendar Period, then
the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average
of the two most recent weekly per annum
market discount rates (or the one weekly
per annum market discount rate, if only
one such rate shall be published during
the relevant Calendar Period as provided
below) for all of the U.S. Treasury
bills then having maturities of not less
than 80 nor more than 100 days, as
published during such Calendar Period by 36.
the Federal Reserve Board or, if the
Federal Reserve Board shall not publish
such rates, by any Federal Reserve Bank
or by any U.S. Government department or
agency selected by the corporation. In
the event that the corporation
determines in good faith that for any
reason no such U.S. Treasury bill rates
are published as provided above during
such Calendar Period, then the Treasury
Bill Rate for such Dividend Period shall
be the arithmetic average of the per
annum market discount rates based upon
the closing bids during such Calendar
Period for each of the issues of
marketable noninterest bearing U.S.
Treasury securities with a maturity of
not less than 80 nor more than 100 days
from the date of each such quotation, as
chosen and quoted daily for each
business day in New York City (or less
frequently if daily quotations shall not
be generally available) to the
corporation by at least three recognized
dealers in U.S. Government securities
selected by the corporation. In the
event that the corporation determines in
good faith that for any reason the
corporation cannot determine the
Treasury Bill Rate for any Quarterly
Dividend Period as provided above in
this paragraph, the Treasury Bill Rate
for such Dividend Period shall be the
arithmetic average of the per annum
market discount rates based upon the
closing bids during such Calendar Period
for each of the issues of marketable
interest-bearing U.S. Treasury
securities with a maturity of not less
than 80 nor more than 100 days, as
chosen and quoted daily for each
business day in New York City (or less
frequently if daily quotations shall not
be generally available) to the
corporation by at least three recognized
dealers in U.S. Government securities
selected by the corporation.
(4) Except as provided below in
this paragraph, the "Ten Year Constant
Maturity Rate" for each Quarterly
Dividend Period shall be the arithmetic
average of the two most recent weekly
per annum Ten Year Average Yields (or 37.
the one weekly per annum Ten Year
Average Yield, if only one such Yield
shall be published during the relevant
Calendar Period as provided below), as
published weekly by the Federal Reserve
Board during the Calendar Period
immediately prior to the last ten
calendar days of March, June, September
or December, as the case may be, prior
to the Quarterly Dividend Period for
which the dividend rate on this Series
is being determined. In the event that
the Federal Reserve Board does not
publish such a weekly per annum Ten Year
Average Yield during such Calendar
Period, then the Ten Year Constant
Maturity Rate for such Dividend Period
shall be the arithmetic average of the
two most recent weekly per annum Ten
Year Average Yields (or the one weekly
per annum Ten Year Average Yield, if
only one such Yield shall be published
during the relevant Calendar Period as
provided below), as published weekly
during such Calendar Period by any
Federal Reserve Bank or by any U.S.
Government department or agency selected
by the corporation. In the event that a
per annum Ten Year Average Yield shall
not be published by the Federal Reserve
Board or by any Federal Reserve Bank or
by any U.S. Government department or
agency during such Calendar Period, then
the Ten Year Constant Maturity Rate for
such Dividend Period shall be the
arithmetic average of the two most
recent weekly per annum average yields
to maturity (or the one weekly average
yield to maturity, if only one such
yield shall be published during the
relevant Calendar Period as provided
below) for all of the actively traded
marketable U.S. Treasury fixed interest
rate securities (other than Special
Securities) then having maturities of
not less than eight nor more than twelve
years, as published during such Calendar
Period by the Federal Reserve Board or,
if the Federal Reserve Board shall not
publish such yields, by any Federal
Reserve Bank or by any U.S. Government
department or agency selected by the
corporation. In the event that the
corporation determines in good faith 38.
that for any reason the corporation
cannot determine the Ten Year Constant
Maturity Rate for any Quarterly Dividend
Period as provided above in this
paragraph, then the Ten Year Constant
Maturity Rate for such Dividend Period
shall be the arithmetic average of the
per annum average yields to maturity
based upon the closing bids during such
Calendar Period for each of the issues
of actively traded marketable U.S.
Treasury fixed interest rate securities
(other than Special Securities) with a
final maturity date not less than eight
nor more than twelve years from the date
of each such quotation, as chosen and
quoted daily for each business day in
New York City (or less frequently if
daily quotations shall not be generally
available) to the corporation by at
least three recognized dealers in U.S.
Government securities selected by the
corporation.
(5) Except as provided below in this
paragraph, the "Twenty Year Constant Maturity
Rate" for each Quarterly Dividend Period shall be
the arithmetic average of the two most recent
weekly per annum Twenty Year Average Yields (or
the one weekly per annum Twenty Year Average
Yield, if only one such Yield shall be published
during the relevant Calendar Period as provided
below), as published weekly by the Federal Reserve
Board during the Calendar Period immediately prior
to the last ten calendar days of March, June,
September or December, as the case may be, prior
to the Quarterly Dividend Period for which the
dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does
not publish such a weekly per annum Twenty Year
Average Yield during such Calendar Period, then
the Twenty Year Constant Maturity Rate for such
Dividend Period shall be the arithmetic average of
the two most recent weekly per annum Twenty Year
Average Yields (or the one weekly per annum Twenty
Year Average Yield, if only one such Yield shall
be published during the relevant Calendar Period
as provided below), as published weekly during
such Calendar Period by any Federal Reserve Bank
or by any U.S. Government department or agency
selected by the corporation. In the event that a
per annum Twenty Year Average Yield shall not be
published by the Federal Reserve Board or by any
Federal Reserve Bank or by any U.S. Government 39.
department or agency during such Calendar Period,
then the Twenty Year Constant Maturity Rate for
such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum
average yields to maturity (or the one weekly
average yield to maturity, if only one such yield
shall be published during the relevant Calendar
Period as provided below) for all of the actively
traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities)
then having maturities of not less than eighteen
nor more than twenty-two years, as published
during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board shall not
publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency
selected by the corporation. In the event that
the corporation determines in good faith that for
any reason the corporation cannot determine the
Twenty Year Constant Maturity Rate for any
Quarterly Dividend Period as provided above in
this paragraph, then the Twenty Year Constant
Maturity Rate for such Dividend Period shall be
the arithmetic average of the per annum average
yields to maturity based upon the closing bids
during such Calendar Period for each of the issues
of actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special
Securities) with a final maturity date not less
than eighteen nor more than twenty-two years from
the date of each such quotation, as chosen and
quoted daily for each business day in New York
City (or less frequently if daily quotations shall
not be generally available) to the corporation by
at least three recognized dealers in U.S.
Government securities selected by the corporation.
(6) The Treasury Bill Rate, the Ten Year
Constant Maturity Rate and the Twenty Year
Constant Maturity Rate shall each be rounded to
the nearest five one-hundredths of a percentage
point.
(7) The Applicable Rate with respect to each
Quarterly Dividend Period will be calculated as
promptly as practicable by the corporation
according to the appropriate method described
herein. The corporation will cause each
Applicable Rate to be published in a newspaper of
general circulation in New York City prior to the
commencement of the Quarterly Dividend Period to
which it applies and will cause notice of such
Applicable Rate to be enclosed with the dividend
payment checks next mailed to the holders of 40.
shares of this Series.
(8) For purposes of this Section (b), the
term
(i) "Calendar Period" shall mean
14 calendar days;
(ii) "Special Securities" shall mean
securities which can, at the option of the
holder, be surrendered at face value in
payment of any Federal estate tax or which
provide tax benefits to the holder and are
priced to reflect such tax benefits or which
were originally issued at a deep or
substantial discount;
(iii) "Ten Year Average Yield" shall mean
the average yield to maturity for actively
traded marketable U.S. Treasury fixed
interest rate securities (adjusted to
constant maturities of ten years); and
(iv) "Twenty Year Average Yield" shall
mean the average yield to maturity for
actively traded marketable U.S. Treasury
fixed interest rate securities (adjusted to
constant maturities of 20 years).
(9) So long as any shares of this Series are
outstanding, the corporation shall not (a) declare
or pay or set apart for payment any dividend or
other distribution (other than dividends or
distributions payable in shares of stock of the
corporation ranking junior to this Series as to
dividends and upon liquidation) for any period
upon any stock of the corporation ranking on a
parity with, or any stock of the corporation
ranking junior to, this Series as to dividends or
upon liquidation or (b) redeem, purchase or
otherwise acquire for any consideration any stock
of the corporation ranking on a parity with, or
any stock of the corporation ranking junior to,
this Series as to dividends or upon liquidation,
unless, in either case, all dividends payable to
holders of shares of this Series and of any stock
of the corporation ranking on a parity therewith
as to dividends for its current dividend period
and all past dividend periods have been paid, are
contemporaneously being paid or have been declared
and a sum sufficient for the payment thereof set
aside for such payment, except that
notwithstanding clause (a) above the corporation
may pay dividends on the shares of this Series and 41.
shares of stock of the corporation ranking on a
parity therewith as to dividends ratably in
accordance with the sums which would be payable on
such shares if all dividends, including
accumulations, if any, were declared and paid in
full. Holders of shares of this Series shall not
be entitled to any dividends, whether payable in
cash, property or stock, in excess of full
cumulative dividends, as herein provided, on this
Series. No interest, or sum of money in lieu of
interest, shall be payable in respect of any
dividend payment or payments on this Series which
may be in arrears.
(10) Dividends payable on this Series for
each full Quarterly Dividend Period shall be
computed by analyzing the Applicable Rate and
dividing by four. Dividends payable on this
Series for any period less than a full Dividend
Period shall be computed on the basis of a 360-day
year of 30-day months and the actual number of
days elapsed in the period for which payable.
(c) Redemption.
(1) The shares of this Series shall not be
redeemable prior to April 1, 1988. On and after
April 1, 1988, the corporation, at its option, may
redeem shares of this Series, as a whole or in
part, at any time or from time to time, at a
redemption price (i) in the case of any redemption
on a redemption date occurring on or after
April 1, 1988, and prior to April 1, 1993, of
$51.50 per share and (ii) in the case of any
redemption on a redemption date occurring on or
after April 1, 1993, of $50 per share, plus, in
each case, accrued and unpaid dividends thereon to
the date fixed for redemption.
(2) In the event that fewer than all the
outstanding shares of this Series are to be
redeemed, the number of shares to be redeemed
shall be determined by the Board of Directors and
the shares to be redeemed shall be determined by
lot or pro rata as may be determined by the Board
of Directors or by any other method as may be
determined by the Board of Directors in its sole
discretion to be equitable.
(3) In the event the corporation shall
redeem shares of this Series, notice of such
redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 nor more
than 60 days prior to the redemption date, to each 42.
holder of record of the shares to be redeemed, at
such holder's address as the same appears on the
stock register of the corporation. Each such
notice shall state: (i) the redemption date;
(ii) the number of shares of this Series to be
redeemed and, if fewer than all the shares held by
such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where
certificates for such shares are to be surrendered
for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease
to accrue on such redemption date.
(4) Notice having been mailed as aforesaid,
from and after the redemption date (unless default
shall be made by the corporation in providing
money for the payment of the redemption price)
dividends on the shares of this Series so called
for redemption shall cease to accrue, and said
shares shall no longer be deemed to be
outstanding, and all rights of the holders thereof
as stockholders of the corporation (except the
right to receive from the corporation the
redemption price) shall cease. Upon surrender in
accordance with said notice of the certificates
for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors
of the corporation shall so require and the notice
shall so state), such shares shall be redeemed by
the corporation at the redemption price aforesaid.
In case fewer than all the shares represented by
any such certificate are redeemed, a new
certificate shall be issued representing the
unredeemed shares without cost to the holder
thereof.
(5) Any shares of this Series which shall at
any time have been redeemed shall, after such
redemption, have the status of authorized but
unissued shares of Preferred Stock, without
designation as to series until such shares are
once more designated as part of a particular
series by the Board of Directors.
(6) Notwithstanding the foregoing provisions
of this Section (c), if any dividends on this
Series are in arrears, no shares of Preferred
Stock shall be redeemed, and the corporation shall
not purchase or otherwise acquire any shares of
this Series; provided, however, that the foregoing
shall not prevent the purchase or acquisition of
shares of this Series pursuant to a purchase or
exchange offer made on the same terms to all 43.
holders of Preferred Stock and any other shares of
stock of the Company ranking on a parity therewith
as to dividends.
(d) Conversion or Exchange. The holders of
shares of this Series shall not have any rights herein
to convert such shares into or exchange such shares for
shares of any other class or classes or of any other
series of any class or classes of capital stock of the
corporation.
(e) Voting. The shares of this Series shall not
have any voting powers either general or special,
except as expressly required by applicable law and
except that
(1) The consent of the holders of at least
66-2/3% of all of the shares of this Series at the
time outstanding, given in person or by proxy,
either in writing or by a vote at a meeting called
for the purpose at which the holders of shares of
this Series shall vote together as a separate
class, shall be necessary for authorizing,
effecting or validating the amendment, alteration
or repeal of any of the provisions of the
Certificate of Incorporation or of any certificate
amendatory thereof or supplemental thereto
(including any Certificate of Designation and
Terms or any similar document relating to any
series of Preferred Stock) so as to materially
adversely affect the powers, preferences,
privileges or rights of this Series;
(2) The consent of the holders of at least
66-2/3% of all of the shares of this Series and
all other series of Preferred Stock ranking on a
parity with shares of this Series, either as to
dividends or upon liquidation, at the time
outstanding, given in person or by proxy, either
in writing or by a vote at a meeting called for
the purpose at which the holders of shares of this
Series and such other series of Preferred Stock
shall vote together as a single class without
regard to series, shall be necessary for
authorizing, effecting or validating the creation,
authorization, increase in the authorized amount
of or issue of any shares of any class or series
of stock of the corporation ranking prior to the
shares of this Series as to dividends or upon
liquidation, or the reclassification of any
authorized stock of the corporation into any such
prior shares, or the creation, authorization or
issue of any obligation or security convertible
into or evidencing the right to purchase any such 44.
prior shares;
(3) The consent of the holders of at least a
majority of all of the shares of this Series and
all other series of Preferred Stock ranking on a
parity with this Series, either as to dividends or
upon liquidation, at the time outstanding, given
in person or by proxy, either in writing or by a
vote at a meeting called for the purpose at which
the holders of shares of this Series and such
other series of Preferred Stock shall vote
together as a single class without regard to
series, shall be necessary for authorizing,
effecting or validating the sale, lease or
conveyance of all or substantially all the
property or business of the corporation or the
merger or consolidation of the corporation into or
with any other corporation; provided, however,
that no such vote or consent of the holders of
shares of this Series and such other series of
Preferred Stock, voting as a class without regard
to series, shall be required for the merger or
consolidation of another corporation into or with
the corporation if none of the preferences,
rights, powers or privileges of this Series or
such other series of Preferred Stock or the
holders thereof will be adversely affected thereby
and there shall not be authorized or outstanding
after such merger or consolidation any class of
stock or other securities (except such stock or
securities of the corporation as may have been
authorized or outstanding immediately preceding
such merger or consolidation) ranking prior to the
shares of this Series and such other series of
Preferred Stock as to dividends or upon
liquidation; and provided further, however, that
there shall not be authorized or outstanding after
such merger or consolidation more than 10,000,000
shares of Preferred Stock or any class of stock or
other securities (except such stock or securities
of the corporation as may have been authorized or
outstanding immediately preceding such merger or
consolidation) ranking on a parity with the shares
of this Series as to dividends or upon
liquidation, in which case the vote specified by
this paragraph (3) shall be required;
(4) If at the time of any annual meeting of
stockholders for the election of directors a
default in preference dividends on the Preferred
Stock shall exist, the number of directors
constituting the Board of Directors of the
corporation shall be increased by two, and the
holders of the Preferred Stock of all series 45.
(whether or not the holders of such series of
Preferred Stock would be entitled to vote for the
election of directors if such default in
preference dividends did not exist), shall have
the right at such meeting, voting together as a
single class without regard to series, to the
exclusion of the holders of Common Stock, to elect
two directors of the corporation to fill such
newly created directorships. Such right shall
continue until there are no dividends in arrears
upon the Preferred Stock. Each director elected
by the holders of shares of Preferred Stock
(herein called a "Preferred Director"), shall
continue to serve as such director for the full
term for which he shall have been elected,
notwithstanding that prior to the end of such term
a default in preference dividends shall cease to
exist. Any Preferred Director may be removed by,
and shall not be removed except by, the vote of
the holders of record of the outstanding shares of
Preferred Stock, voting together as a single class
without regard to series, at a meeting of the
stockholders, or of the holders of shares of
Preferred Stock, called for the purpose. So long
as a default in any preference dividends on the
Preferred Stock shall exist (A) any vacancy in the
office of a Preferred Director may be filled
(except as provided in the following clause (B))
by an instrument in writing signed by the
remaining Preferred Director and filed with the
corporation and (B) in the case of the removal of
any Preferred Director, the vacancy may be filled
by the vote of the holders of the outstanding
shares of Preferred Stock, voting together as a
single class without regard to series, at the same
meeting at which such removal shall be voted.
Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for
all purposes hereof, to be a Preferred Director.
Whenever the term of office of the Preferred
Directors shall end and a default in preference
dividends shall no longer exist, the number of
directors constituting the Board of Directors of
the corporation shall be reduced by two. For the
purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed
to have occurred whenever the amount of accrued
dividends upon any series of the Preferred Stock
shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such
default shall be deemed to exist thereafter until,
but only until, all accrued dividends on all
shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end 46.
of the last preceding Quarterly Dividend Period;
(f) Liquidation Rights.
(1) Upon the dissolution, voluntary or
involuntary liquidation or winding up of the
corporation, the holders of the shares of this
Series shall be entitled to receive out of the
assets of the corporation, before any payment or
distribution shall be made on the Common Stock or
on any other class of stock of the corporation
ranking junior to the Preferred Stock upon
liquidation, the amount of $50 per share, plus a
sum equal to all dividends (whether or not earned
or declared) on such shares accrued and unpaid
thereon to the date of final distribution.
(2) For the purposes of this Section (f), a
voluntary or involuntary liquidation, dissolution
or winding up of the corporation shall include
neither the consolidation or merger of the
corporation with or into any other corporation,
nor any sale, lease or conveyance of all or any
part of the property or business of the
corporation.
(3) After the payment to the holders of the
shares of this Series of the full preferential
amounts provided for in this Section (f), the
holders of this Series as such shall have no right
or claim to any of the remaining assets of the
corporation.
(4) In the event the assets of the
corporation available for distribution to the
holders of shares of this Series upon any
dissolution, liquidation or winding up of the
corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts
to which such holders are entitled pursuant to
paragraph (1) of this Section (f), no such
distribution shall be made on account of any
shares of stock of the corporation ranking on a
parity with the shares of this Series upon such
dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid
on account of the shares of this Series, ratably,
in proportion to the full distributable amounts
for which holders of all such parity shares are
respectively entitled upon such dissolution,
liquidation or winding up.
(5) Upon the dissolution, liquidation or
winding up of the corporation, the holders of 47.
shares of this Series then outstanding shall be
entitled to be paid out of the assets of the
corporation available for distribution to its
stockholders all amounts to which such holders are
entitled pursuant to paragraph (1) of this
Section (f) before any payment shall be made to
the holders of any class of capital stock of the
corporation ranking junior upon liquidation to
this Series.
(g) For purposes of this Series, any stock of any
class or classes of the corporation shall be deemed to
rank:
(1) prior to the shares of this Series,
either as to dividends or upon liquidation, if the
holders of such class or classes shall be entitled
to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or
winding up of the corporation, as the case may be,
in preference or priority to the holders of shares
of this Series;
(2) on a parity with shares of this Series,
either as to dividends or upon liquidation,
whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices
per share or sinking fund provisions, if any, be
different from those of this Series, if the
holders of such stock shall be entitled to the
receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the
corporation, as the case may be, in proportion to
their respective dividend rates or liquidation
prices, without preference or priority, one over
the other, as between the holders of such stock
and the holders of shares of this Series; and
(3) junior to shares of this Series, either
as to dividends or upon liquidation, if such class
shall be Common Stock or if the holders of shares
of this Series shall be entitled to receipt of
dividends or of amounts distributable upon
dissolution, liquidation or winding up of the
corporation, as the case may be, in preference or
priority to the holders of shares of such class or
classes.
(4) The Series shall rank on a parity as to
dividends and upon liquidation with the Cumulative
Preferred Stock of the corporation.
Fifth: The minimum amount of capital with which the 48.
corporation will commence business is One Thousand Dollars
($1,000.00).
Sixth: This corporation is to have perpetual
existence.
Seventh: The private property of the stockholders
shall not be subject to payment of corporate debts to any extent
whatsoever.
Eighth: No holder of shares of stock of the
corporation of any class, now or hereafter authorized, shall have
any preemptive right to subscribe for, purchase or receive any
shares of stock of the corporation of any class, now or hereafter
authorized, or any options or warrants for such shares, or any
rights to subscribe to or purchase such shares, or any securities
convertible into or exchangeable for such shares, which may at
any time be issued, sold or offered for sale by the corporation.
Ninth: Subject to the provisions of law and in
furtherance and not in limitation of the powers conferred by law,
the Board of Directors of the corporation is hereby empowered by
resolution or resolutions:
1. To provide for the issuance from time to time of
its shares of stock of any class, whether now or hereafter
authorized, and securities convertible into shares of its stock
of any class, and/or securities whether now or hereafter
authorized carrying a privilege to subscribe for or receive
shares of its stock of any class, for such considerations and
upon such terms and conditions as the Board of Directors may fix
from time to time.
2. To determine that only a part of the consideration
which shall be received by the corporation in excess of the par
value of its shares of capital stock or any thereof, which it
shall issue from time to time, shall be capital.
3. Without the consent of the stockholders of any
class, to authorize the issuance and sale from time to time of
evidences of indebtedness (as defined in Article Third hereof) of
the corporation for such considerations as it may deem advisable,
to provide that such evidences of indebtedness be issued in such
series, in such denomination or denominations, and with such
interest rate or rates, redemption price or prices, and maturing
at such time or times and otherwise varying as it may determine;
and likewise without such consent to mortgage, pledge and/or
hypothecate all or any part of the corporation's property, real,
personal or mixed (except its corporate franchises), and its
rents, revenues and income, whether now owned or hereafter
acquired, and to authorize the execution, delivery, filing and
recording of all mortgages, deeds of trust or other indentures,
in such form as shall be determined by it, to secure the payment
of all or any of such evidences of indebtedness, the principal 49.
and interest thereof, the premium, if any, thereon, and any and
all amounts or sums payable in respect thereof or in connection
therewith.
4. To make, alter, amend, change, add to or repeal
the by-laws of this corporation, without any action on the part
of the stockholders.
5. By resolution passed by a majority of the whole
board, to designate two or more of its number to constitute an
executive committee, which committee, so far as is provided in
said resolution or in the by-laws of this corporation, shall have
and may exercise the powers of the Board of Directors in the
management of the business and affairs of this corporation, and
have power to authorize the seal of this corporation to be
affixed to all papers which may require it.
6. When and as authorized by the affirmative vote of
the holders of a majority of the stock issued and outstanding
having voting power given at a stockholders' meeting duly called
for that purpose, or when authorized by the written consent of
the holders of a majority of the voting stock issued and
outstanding, to sell, lease or exchange all of the property and
assets of the corporation, including its good will and its
corporate franchises, upon such terms and conditions and for such
consideration, which may be in whole or in part evidences of
indebtedness and/or certificates of interest (as defined in
Article Third hereof), as its Board of Directors shall deem
expedient and for the best interests of the corporation.
7. From time to time, to determine whether and to
what extent and at what times and places and under what
conditions and regulations the accounts and books of this
corporation (other than the stock ledger) or any of them shall be
open to the inspection of stockholders; and no stockholder shall
have any right of inspecting any account, book or document of
this corporation, except as conferred by statute, unless
authorized by resolution of stockholders or directors.
8. To set apart out of any of the funds or assets of
this corporation, available for dividends, a reserve or reserves
for any proper purpose, and to abolish any such reserve or
reserves. Against any such reserve or reserves and/or surplus so
established, there may be charged losses at any time incurred by
this corporation, also dividends or other distribution upon
stock. Such reserve or reserves and/or surplus may be reduced
from time to time by the Board of Directors by transfer from such
reserve or reserves and/or surplus to capital account.
9. At any time or from time to time to create and
issue (without any action by the stockholders of the
corporation), whether or not in connection with the issue and
sale of any shares of stock or other securities of the
corporation, rights or options entitling the holders thereof to 50.
purchase from the corporation shares of its capital stock, such
rights or options to be evidenced by or in such instrument or
instruments as shall be approved by the Board of Directors. The
terms upon which, the time or times, which may be limited or
unlimited in duration, at or within which, and the price or
prices at which any such shares may be purchased from the
corporation upon the exercise of any such right or option shall
be such as shall be fixed and stated in a resolution or
resolutions adopted by the Board of Directors providing for the
creation and issue of such rights or options, and set forth or
incorporated by reference in the instrument or instruments
evidencing such rights or options.
Tenth: The number of Directors which shall constitute
the whole Board shall be such from time to time as shall be fixed
by the by-laws, but in no case shall the Board be less than three
(3). In case of any increase in the number of Directors, such
additional Directors shall be chosen by the Directors or
stockholders at the time entitled to vote, as may be prescribed
in the by-laws of this corporation. Directors need not be
stockholders. This corporation may in its by-laws confer powers
upon its directors in addition to those conferred in this
certificate of incorporation and in addition to the powers and
authorities expressly conferred upon them by statute.
Eleventh: The corporation shall be entitled to treat
the person in whose name any share is registered as the owner
thereof for all purposes, and shall not be bound to recognize any
equitable or other claim to or interest in such share on the part
of any other person, whether or not the corporation shall have
notice thereof, save as expressly provided by the laws of the
State of Delaware.
Twelfth: Both stockholders and directors shall have
power, if the by-laws so provide, to hold their meetings and to
have one or more offices within or without the State of Delaware
and to keep the books of this corporation (subject to the
provisions of the General Corporation Law of said State) outside
the State of Delaware, at such places as may be from time to time
designated by the Board of Directors.
Thirteenth: All the powers of this corporation in so
far as the same may be lawfully vested by this certificate of
incorporation in the Board of Directors, are hereby conferred
upon the Board of Directors of this corporation, provided,
however, that by resolution of the Board of Directors adopted
either by a quorum disinterested in the subject matter of the
resolution or interested therein, as the case may be, any matter
concerning the management of the corporation or its affairs may
be referred to the stockholders of the corporation for decision
and in such cases such matters may be authorized by vote adopted
by the majority of a quorum of the stockholders entitled to vote
at a meeting thereof duly held.
Fourteenth: A Director of the corporation shall not in 51.
the absence of fraud be disqualified by his office from dealing
or contracting with the corporation either as a vendor, purchaser
or otherwise, nor in the absence of fraud shall any transaction
or contract of the corporation be void or voidable or affected by
reason of the fact that any director, or any firm of which any
director is a member, or any corporation or association of which
any director is an officer, director or stockholder, is in any
way interested in such transaction or contract; provided that at
the meeting of the Board of Directors or of a committee thereof
having authority in the premises, authorizing or confirming said
contract or transaction, the existence of an interest of such
director, firm, corporation or association is disclosed or made
known (or shall have been disclosed and spread upon the records
at a previous meeting at which a quorum was present) and there
shall be present a quorum of the Board of Directors or of the
directors constituting such committee, and such contract or
transaction shall be approved by a majority of such quorum, which
majority shall consist of directors not so interested or
connected. Nor shall any director be liable to account to the
corporation for any profit realized by him from or through any
such transaction or contract of the corporation ratified or
approved as aforesaid, by reason of the fact that he or any firm
of which he is a member, or any corporation or association of
which he is an officer, director or stockholder, was interested
in such transaction or contract. Anything herein contained to
the contrary notwithstanding, all or any of the Directors of the
corporation, in connection with the organization of this
corporation and the issuance of its stock for cash and/or
properties, may vote to approve and authorize Plans and
Agreements for the acquisition by this corporation, through the
issuance of its own stock in exchange therefor, of stock in banks
and/or trust companies of which said Directors, or any of them,
may be stockholders, directors, or officers, and to approve and
authorize an underwriting agreement or agreements for the sale of
stock of this corporation, in which they or any of them may be
interested, with the same force and effect as though not so
interested. Directors so interested may be counted when present
at meetings of the Board of Directors or of such committee for
the purpose of determining the existence of a quorum. Any
contract, transaction or act of the corporation or of the Board
of Directors or of any committee thereof (whether or not approved
or ratified as hereinabove provided) which shall be ratified by a
majority in interest of a quorum of the stockholders entitled to
vote at any annual meeting or any special meeting called for such
purpose or approved in writing by a majority in interest of the
stockholders entitled to vote without a meeting, shall be as
valid and as binding as though ratified by every stockholder of
the corporation.
Fifteenth: To the fullest extent that the General
Corporation Law of the State of Delaware, as the same exists or
may hereafter be amended, permits, elimination or limitation of
the liability of directors, no director of the corporation shall
be liable to the corporation or its shareholders for monetary 52.
damages for breach of his fiduciary duty as a director. Any
repeal or modification of this Article by the shareholders of the
corporation shall be prospective only and shall not adversely
affect any limitation on the personal liability of a director of
the corporation for acts or omissions occurring prior to the
effective date of such repeal or modification.
Sixteenth: This corporation reserves the right to
amend, alter, change or repeal any provision contained in this
certificate of incorporation in the manner now or hereafter
prescribed by statute, and all rights conferred on officers,
directors and stockholders herein are granted subject to this
reservation.
IN WITNESS WHEREOF, said HSBC Americas, Inc., has
caused this certificate to be signed by James H. Cleave, its
President, and attested by Philip S. Toohey, its secretary this
17th day of August, 1995.
HSBC AMERICAS, INC.
By__________________________
President
(SEAL)
ATTEST:
By___________________________
Secretary
IDwt
218307.01
(Restated as amended as of April 12, 1990)
BY-LAWS
of
HSBC Americas, Inc.
ARTICLE I
SHAREHOLDERS' MEETINGS
Section 1.1 Annual Meeting. The Annual Meeting of the
shareholders for the election of directors and the transaction of
such other business as may properly come before the meeting, shall
be held in April each year at the Office of the Corporation, One
Marine Midland Center, City of Buffalo, State of New York, or at
such other place and at such time and on such day as may be
designated from time to time by the Board of Directors.
Section 1.2 Special Meetings. Except as otherwise
specifically provided by statute, special meetings of the
shareholders may be called for any purpose at any time by the
Board, the Chairman of the Board, the President, the Chief
Executive Officer or the Secretary. Business transacted at all
special meetings of shareholders shall be confined to the purposes
stated in the Notice of Meeting.
Section 1.3 Quorum. The holders of a majority of the stock
issued and outstanding, and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all
meetings of shareholders unless otherwise provided by law.
Section 1.4 Voting. At any meeting of the shareholders each
shareholder may vote in person or by proxy duly authorized in
writing. Each shareholder shall at every meeting of shareholders
be entitled to one vote for each share of stock held by such share-
holder. A majority of the votes cast shall decide every question
or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Certificate of Incorporation.
Any action required to be taken at an annual or special
meeting of shareholders may be taken without a meeting by written
consent setting forth the action and signed by the holders of
outstanding shares having not less than the minimum number of
shares necessary to authorize or to take such action at a meeting
at which all shares entitled to vote thereon were present and
voted.
Section 1.5 Notice of Meeting. Written notice of each
meeting of shareholders stating the place, date, and hour of the
meeting, and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered
personally or shall be mailed postage prepaid to each share-
holder entitled to vote at such meeting, directed to the
shareholder at his address as it appears on the records of the
Corporation, not less than ten days before the date of the meeting.
ARTICLE II
DIRECTORS
Section 2.1 Board of Directors. The Board of Directors
(hereinafter referred to as the "Board"), shall have the power to
manage and administer the business and affairs of the Corporation,
and, except as expressly limited by law, all corporate powers of
the Corporation shall be vested in and may be exercised by said
Board unless such powers are required by statute, by the Certif-
icate of Incorporation, or by these By-Laws to be done by the
shareholders.
Section 2.2 Number and Term. The Board shall consist of not
less than five nor more than twenty-five directors, the exact
number within such minimum and maximum limits to be fixed and
determined from time to time by resolution of a majority of the
full Board or by resolution of the shareholders at any meeting of
shareholders. Unless sooner removed or disqualified, each director
shall hold office until the next annual meeting of the shareholders
and until his successor has been elected and qualified.
Section 2.3 Organization Meeting. At its first meeting
after each annual meeting of shareholders, the Board shall choose
a Chairman of the Board, a President and a Chief Executive Officer
from its own members and otherwise organize the new Board and
appoint officers of the Corporation for the succeeding year.
Section 2.4 Chairman of the Board. The Chairman of the
Board shall preside at all meetings of the Board and of
shareholders and perform such duties as shall be assigned to him
from time to time by the Board. In the absence of the Chairman of
the Executive Committee, the Chairman of the Board shall act as
Chairman of the Executive Committee. Except as may be otherwise
provided by the By-Laws or the Board, he shall be a member ex
officio of all committees authorized by these By-Laws or the Board.
He shall be kept informed by the executive officers about the
affairs of the Corporation.
Section 2.5 Regular Meetings. The Regular Meetings of the
Board shall be held each month at the time and location designated
by the Board. No notice of a Regular Meeting shall be required if
the meeting is held according to a Schedule of Regular Meetings
approved by the Board.
Section 2.6 Special Meetings. Special meetings of the Board
may be called by the Chairman of the Board, the President, the
Chief Executive Officer or the Secretary or at the written request
of any three or more directors. Each member of the Board shall be
given notice stating the time and place of each such special
meeting by telegram, telephone, or similar electronic means, or in
person, at least one day prior to such meeting, or by mail at least
three days prior.
Section 2.7 Quorum. One-third of the directors shall
constitute a quorum at any meeting, except when otherwise provided
by law. If a quorum is not present at any meeting, the directors
present may adjourn the meeting, and the meeting may be held, as
adjourned, without further notice provided that a quorum is then
present. The act of a majority of the directors present at any
meeting at which there is a quorum, shall be the act the Board,
unless otherwise specifically provided by statute, by the
Certificate of Incorporation, or by these By-Laws.
Section 2.8 Vacancies. When any vacancy occurs among the
directors, the remaining members of the Board may appoint a
director to fill each such vacancy at any regular meeting of the
Board, or at a special meeting called for that purpose. Any
director so appointed shall hold office until the next an- nual
meeting of the shareholders and until his successor has been
elected and qualified, unless sooner displaced.
Section 2.9 Removal of Directors. Any director may be
removed either with or without cause, at any time, by a vote of the
holders of a majority of the shares of the Corporation at any
meeting of shareholders called for that purpose. A director may be
removed for cause by a vote of a majority of the full Board.
Section 2.10 Compensation of Directors. The Board shall fix
the amounts to be paid directors for their services as directors
and for their attendance at the meetings of the Board or of
committees or otherwise. No director who receives a salary from
the Corporation shall receive any fee for attending meetings of the
Board or of any of its committees.
Section 2.11 Action of the Board. Except as otherwise
provided by law, corporate action to be taken by the Board shall
mean such action at a meeting of the Board or the Executive
Committee of the Board. Any action required or permitted to be
taken by the Board, the Executive Committee or any other committee
of the Board may be taken without a meeting if all members of the
Board or the committee consent in writing to a resolution
authorizing the action. The resolution and the written consents
thereto shall be filed with the minutes of the proceedings of the
Board or committee. Any one or more members of the Board or any
committee may participate in a meeting of the Board or committee by
means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear
each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
Section 2.12 Waiver of Notice. Notice of the Meeting need
not be given to any director who submits a signed Waiver of Notice
whether before or after the meeting, or who attends the meeting
without protesting, prior thereto or at its commencement, a lack of
such notice.
ARTICLE III
COMMITTEES OF THE BOARD
Section 3.1 Executive Committee. There shall be an
Executive Committee which shall be composed of at least three
members elected by the Board from among its members at its first
meeting following the Annual Meeting to serve for the ensuing year
and shall include the Chairman of the Board, the President, the
Chief Executive Officer, and the Chairman of the Executive
Committee, all of which offices may be held by one person. The
Chairman of the Board may appoint one or more directors as
alternate members to serve in place of any absent members of the
Executive Committee. Any vacancy in the Executive Committee shall
be filled by the Board but until its next regular Board meeting may
be filled temporarily by the Chairman of the Board.
The Executive Committee shall possess and exercise all of the
powers of the Board except when the latter is in session.
Section 3.2 Chairman of the Executive Committee. The Board
shall appoint one of its members to be Chairman of the Executive
Committee. The Chairman of the Board, the President or the Chief
Executive Officer may at the same time be appointed Chairman of the
Executive Committee. The Chairman of the Executive Committee shall
preside at all meetings of the Executive Committee, and he shall,
in the absence of the Chairman of the Board, the President and the
Chief Executive Officer, preside at all meetings of share- holders
and the Board. He shall also perform such other duties and be
vested with such other powers as may from time to time be conferred
upon him by these By-Laws or as shall be assigned to him from time
to time by the Board or the Chief Executive Officer.
Section 3.3 Meetings of the Executive Committee. Meetings
of the Executive Committee may be called by the Chairman of the
Board, the Chairman of the Executive Committee, the President, the
Chief Executive Officer or the Secretary, and may be held at any
place and at any time designated in the notice thereof. Each
member of the Executive Committee shall be given notice stating the
time and place of each such meeting, by telegram, telephone, or
similar electronic means, or in person, at least one day prior to
such meeting, or by mail at least three days prior.
Section 3.4 Audit Committee. The Board shall designate an
Audit Committee, which shall hold office until the next annual
meeting, consisting of not less than three of its members, other
than officers of the Corpora- tion. The Committee shall meet with
the Corporation's independent auditors and review with them the
scope of their examination, and their findings and recommendations.
The Audit Committee shall also meet with and receive reports from
the Corporation's internal auditors. The Committee shall oversee
the accounting policies used in the preparation of the financial
statements of the Corporation and its affiliates. The Committee
will report the results of their meetings and reviews to the Board.
Section 3.5 Other Committees. The Board may appoint, from
time to time, from its own members, committees of the Board of one
or more persons, for such purposes and with such powers as the
Board may determine.
ARTICLE IV
OFFICERS
Section 4.1 President. The Board shall appoint one of its
members to be President. In the absence of the Chairman of the
Board, the President shall preside at all meetings of the Board and
of shareholders and in the absence of the Chairman of the Executive
Committee and the Chairman of the Board at all meetings of the
Executive Committee. Except as may be otherwise provided by the
By-Laws or the Board, he shall be a member ex officio of all
committees authorized by these By-Laws or the Board. The President
shall have general executive powers, shall participate actively in
all major policy decisions and shall have and may exercise any and
all other powers and duties pertaining by law, regulation, or
practice, to the Office of President, or imposed by these By-Laws.
The President shall also have and may exercise such further powers
and duties as from time to time may be conferred, or assigned by
the Board or the Chief Executive Officer.
Section 4.2 Chief Executive Officer. The Board shall
appoint one of its members to be Chief Executive Officer of the
Corporation. The Chairman of the Board or the President may at the
same time be appointed Chief Executive Officer. The Chief
Executive Officer shall exercise general supervision over the
policies and business affairs of the Corporation and the carrying
out of the policies adopted or approved by the Board. Except as
otherwise provided by these By-Laws, he shall have power to
determine the duties to be performed by the officers appointed as
provided in Section 4.5 of these By-Laws, and to employ and
discharge officers and employees. Except as otherwise provided by
the By-Laws or the Board, he shall be a member ex officio of all
committees authorized by these By-Laws or created by the Board. In
the absence of the Chairman of the Board and the President, he
shall preside at all meetings of the Board and of shareholders.
Section 4.3 Executive and Other Senior Officers. The Board
shall by resolution determine from time to time those officers
whose appointment shall require approval by the Board or a
committee of the Board. Each such officer shall have such powers
and duties as may be assigned by the Board, a committee of the
Board, the President or the Chief Executive Officer.
Section 4.4 Secretary. The Board shall appoint a Secretary
who shall be the Secretary of the Board and of the Corporation and
shall keep accurate minutes of all the meetings of shareholders and
of the Board. The Secretary shall attend to the giving of all
notices required to be given by these By- Laws; shall be custodian
of the corporate seal, records, documents, and papers of the
Corporation; shall provide for the keeping of proper records of all
transactions of the Corporation; shall have and may exercise any
and all other powers and duties pertaining by law, regulation or
practice, to the Office of Secretary, or imposed by these By-Laws;
and shall also perform such other duties as may be asssigned from
time to time by the Board, the President or the Chief Executive
Officer.
Section 4.5 Other Officers. The President or the Chief
Executive Office or his designee may appoint all officers whose
appointment does not require approval by the Board or a committee
of the Board, and assign to them such titles, as from time to time
may appear to be required or desirable to transact the business of
the Corporation. Each such officer shall have such powers and
duties as may be assigned by the Board, the President or the Chief
Executive Officer.
Section 4.6 Tenure of Office. The Chairman of the Board,
the President, the Chief Executive Officer and the Chairman of the
Executive Committee shall hold office for the current year for
which the Board was elected, unless they shall resign, become
disqualified, or be removed. All other officers shall hold office
until their successors have been appointed and qualify unless they
shall resign, become disqualified or be removed. The Board shall
have the power to remove the Chairman of the Board, the President,
the Chief Executive Officer and the Chairman of the Executive
Committee. The Board or the Chief Executive Officer or his
designee shall have the power to remove all other officers and
employees. Any vacancy occurring in the offices of Chairman of the
Board, President or Chief Executive Officer shall be filled
promptly by the Board.
Section 4.7 Compensation. The Board shall by resolution
determine from time to time the officers whose compensation will
require approval by the Board or a committee of the Board. The
Chief Executive Officer shall fix the compensation of all officers
and employees whose compensation does not require approval by the
Board or the Compensation and Nominating Committee.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 5.1 Transfers. Shares of stock shall be
transferable on the books of the Corporation only by the person
named in the certificate or by an attorney, lawfully constituted in
writing, and upon surrender of the certifi- cate therefor. Every
person becoming a shareholder by such transfer shall, in proportion
to his shares, succeed to all rights of the prior holder of such
shares.
Section 5.2 Stock Certificates. The certificates of stock
of the Corporation shall be numbered and shall be entered in the
books of the Corpor- ation as they are issued. They shall exhibit
the holder's name and number of shares and shall be signed by the
Chairman of the Board, the President, the Chief Executive Officer,
a Vice President or any other officer appointed by the Board for
this purpose, and the Secretary or an Assistant Secretary.
ARTICLE VI
CORPORATE SEAL
Section 6.1 Corporate Seal. The Chairman of the Board, the
President, the Chief Executive Officer, the Secretary, any
Assistant Secretary, Vice President, Assistant Vice President, or
other officer thereunto designated by the Board or the Chief
Executive Officer or his designee, shall have authority to affix
the corporate seal to any document requiring such seal, and to
attest the same. Such seal shall be substantially in the following
form:
(impression )
( of )
( Seal )
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Fiscal Year. The Fiscal Year of the
Corporation shall be the calendar year.
Section 7.2. Execution of Instruments. All agreements,
indentures, mortgages, deeds, conveyances, transfers, certificates,
declarations, receipts,
discharges, releases, satisfactions, settlements, petitions,
schedules, accounts, affidavits, bonds, undertakings, proxies and
other instruments or documents may be signed, executed,
acknowledged, verified, delivered or accep- ted in behalf of the
Corporation by the Chairman of the Board, or the Presi- dent, or
the Chief Executive Officer, or the Secretary, or any Vice
President, or any other officer or employee designated by the Board
or the Chief Execu- tive Officer or his designee. Any such
instruments may also be executed, acknowledged, verified, delivered
or accepted in behalf of the Corporation in such other manner and
by such other officers as the Board may from time to time direct.
The provisions of this Section 7.2 are supplementary to any other
provision of these By-Laws. Each of the foregoing authorizations
shall be at the pleasure of the Board, and each such authorization
by the Chief Executive Officer or his designee also shall be at the
pleasure of the Chief Executive Officer.
Section 7.3. Records. The By-Laws and the proceedings of
all meet- ings of the shareholders, the Board, and standing
committees of the Board, shall be recorded in appropriate minute
books provided for the purpose. The minutes of each meeting shall
be signed by the Secretary or other officer appointed to act as
Secretary of the meeting.
Section 7.4 Emergency Operations. In the event of war or
warlike damage or disaster of sufficient severity to prevent the
conduct and management of the affairs, business, and property of
the Corporation by its directors and officers as contemplated by
these By-Laws, any two or more available members of the then
incumbent Executive Committee shall constitute a quorum of that
committee for the full conduct and management of the affairs,
business, and property of the Corporation. In the event of the
unavailability at such time of a minimum of two members of the then
incumbent Executive Committee, any three available directors shall
constitute the Executive Committee for the full conduct and
management of the affairs, business, and property of the
Corporation. This By-Law shall be subject to implementation by
resolutions of the Board passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and
any resolutions which are contrary to the provisions of this
Section or to the provisions of any such implementary resolutions
shall be suspended until it shall be determined by any interim
Executive Committee acting under this Section that it shall be to
the advantage of the Corporation to resume the conduct and
management of its affairs, business, and property under all of the
other provisions of these By-Laws.
Section 7.5 (a) Right to Indemnification. Each person who
was or is made a party or is threatened to be made a party to or is
otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the
fact that he is or was a director or officer of the Corporation or,
while a director or officer of the Corporation is or was serving at
the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to an
employee benefit plan (an "Indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving
as a director or officer, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be
amended, against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by
such Indemnitee in connection therewith and such indemnification
shall continue as to an Indemnitee who has ceased to be a director
or officer and shall inure to the benefit of the Indemnitee's
heirs, executors and administrators; provided, however, that,
except as provided in Section 7.5(b) hereof with respect to
proceedings to enforce rights to indemnification, the Corporation
shall indemnify any such Indemnitee in connection with a proceeding
(or part thereof) initiated by such Indemnitee only if such
proceeding (or part thereof) was authorized by the Board. The
right to indemnification conferred in this Section 7.5 shall be a
contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding
in advance of its final disposition; provided, however, that, if
the Delaware General Corporation Law so requires, an advancement of
expenses incurred by an Indemnitee shall be made only upon delivery
to the Corporation of an undertaking, by or on behalf of such
Indemnitee, to repay all amounts so advanced if it shall ultimately
be determined by final judicial decision from which there is no
further right to appeal that such Indemnitee is not entitled to be
indemnified for such expenses
under this Section or otherwise.
(b) Right of Indemnitee to Bring Suit. If a claim under
paragraph (a) of this Section 7.5 is not paid in full by the
Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall
be twenty days, the Indemnitee may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the
claim. If successful in whole or in part in any such suit, or in
a suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of such Indemnitee's undertaking,
the Indemnitee shall be entitled to be paid the expense of
prosecuting or defending such suit. In any suit brought by the
Indemnitee to enforce a right to indemnification hereunder it shall
be a defense that, and in any suit by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking the
Corporation shall be entitled to recover such expenses upon a final
adjudication that, the Indemnitee has not met the applicable
standard of conduct set forth in the Delaware General Corporation
Law. Neither the failure of the Corporation to have made a
determination prior to the commencement of such suit that
indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct
set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation that the Indemnitee has not met
such applicable standard of conduct, shall create a presumption
that the Indemnitee has not met the applicable standard of conduct
or, in the case of such a suit brought by the Indemnitee, be a
defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnifi- cation or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking by the
Indemnitee, the Corporation shall have the burden of proving that
the Indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Section 7.5 or otherwise.
(c) Non-Exclusivity of Rights. The rights to indemnification
and to the advancement of expenses conferred in this Section 7.5
shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, the Corporation's
Certificate of Incorporation, By-Law, agreement, vote of
shareholders or disinterested directors or otherwise.
(d) Indemnification of Employees and Agents of the
Corporation. The Corporation may, to the extent authorized from
time to time by the Board, grant rights to indemnification, and to
the advancement of expenses to any employee or agent of the
Corporation to the fullest extent of the provisions of this Section
7.5 with respect to the indemnification and advancement of expenses
of directors and officers of the Corporation.
(e) Insurance. The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer, employee
or agent of the Corporation or another corporation, partnership,
joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law, as
the same exists or may hereafter be amended.
Section 7.6 Amendments. The By-Laws may be added to,
amended, altered or repealed at any regular meeting of the Board,
by a vote of a majority of the total number of the directors, or at
any meeting of shareholders, duly called and held, by a majority of
the stock represented at such meeting.
I, , CERTIFY that: (1) I am the duly constituted
Secretary of HSBC Americas, Inc. and as such officer
have access to its official records; (2) the foregoing By-Laws are the By-Laws
of said Corporation, and all of them are now lawfully in force and effect.
IN TESTIMONY WHEREOF, I have hereunto affixed my official
signature and the seal of the said Corporation, in the city of
, New York, on this day of , 19 .
Gea Tung
Assistant Secretary
5126d
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