<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 12, 1993)
$1,000,000,000
NATIONSBANK(Register mark)
SENIOR MEDIUM-TERM NOTES, SERIES C
SUBORDINATED MEDIUM-TERM NOTES, SERIES C
DUE FROM NINE MONTHS TO THIRTY YEARS FROM DATE OF ISSUE
NationsBank Corporation ("NationsBank" or the "Corporation") may from time
to time offer up to $1,000,000,000 aggregate initial offering price of its
Senior Medium-Term Notes, Series C (the "Senior Notes"), and Subordinated
Medium-Term Notes, Series C (the "Subordinated Notes" and, collectively with the
Senior Notes, the "Notes"), subject to reduction from time to time after the
date hereof at the option of NationsBank, including reduction as a result of the
sale of other Securities (as defined in the accompanying Prospectus) of
NationsBank pursuant to the accompanying Prospectus. The Senior Notes will rank
equally with all other unsubordinated and unsecured indebtedness of the
Corporation. The Subordinated Notes will be subordinated in right of payment to
all senior indebtedness of the Corporation. Payment of principal of the
Subordinated Notes may be accelerated only in the case of the bankruptcy of
NationsBank. See "Description of Debt Securities -- Subordination" and
"Description of Debt Securities -- Defaults and Rights of Acceleration" in the
accompanying Prospectus.
Each Note will mature on a Business Day from nine months to thirty years
from its date of issue and, as set forth in an applicable pricing supplement to
this Prospectus Supplement (a "Pricing Supplement"), may be subject to
redemption at the option of the Corporation or repaid at the option of the
registered holder thereof prior to its stated maturity. Each Note will bear
interest at a fixed rate (a "Fixed Rate Note") or at a floating rate (a
"Floating Rate Note"), as set forth in the applicable Pricing Supplement. The
interest rate or interest rate formula for each Note will be established by the
Corporation at the time of issuance of such Note (the "Original Issue Date") and
will be set forth therein and specified in the applicable Pricing Supplement.
See "Description of Notes."
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be issued only in minimum denominations of $1,000 and any larger amount
that is an integral multiple of $1,000. Notes will be issued in book-entry only
form, subject to certain exceptions listed herein, and will be represented by
one or more global notes registered in the name of The Depository Trust Company
("DTC") or its nominee. Beneficial interests in Notes issued in book-entry form
will be shown on, and transfer thereof will be effected only through, records
maintained by DTC or its nominee and its participants. See "Description of
Notes -- Book-Entry System."
THE NOTES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS, ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH
CAROLINA OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION, THE COMMISSIONER OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO, OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
[CAPTION]
<TABLE>
<S> <C> <C>
PRICE TO AGENT'S DISCOUNTS OR
PUBLIC (1) COMMISSIONS (1)(2)
<S> <C> <C>
Per Note........................ 100% .125%-.750%
Total........................... $1,000,000,000 $1,250,000-7,500,000
<CAPTION>
PROCEEDS TO THE
CORPORATION (1)(3)
<S> <C>
Per Note........................ 99.875%-99.250%
Total........................... $998,750,000-992,500,000
</TABLE>
(1) Unless otherwise agreed with the Corporation, NationsBanc Capital Markets,
Inc., Lehman Brothers, Lehman Brothers Inc. (including its affiliate Lehman
Government Securities Inc.), Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, or Salomon
Brothers Inc (each, an "Agent" and, together, the "Agents") will purchase
the Notes, as principal, from the Corporation, for resale to investors and
other purchasers at varying prices relating to prevailing market prices at
the time of resale as determined by the applicable Agent or, if so specified
in an applicable Pricing Supplement, for resale at a fixed public offering
price. Unless otherwise specified in an applicable Pricing Supplement, any
Note sold to an Agent as principal will be purchased by such Agent at a
price equal to 100% of the principal amount thereof less a percentage of the
principal amount equal to the commission applicable to an agency sale (as
described below) of a Note of identical maturity. If agreed to by the
Corporation and the applicable Agent, such Agent may utilize its reasonable
efforts on an agency basis to solicit offers to purchase the Notes at 100%
of the principal amount thereof, unless otherwise specified in an applicable
Pricing Supplement. For each Note sold through an Agent as agent, the
Corporation will pay a commission in the form of a discount to such Agent,
ranging from .125% to .750% of the principal amount of the Note, depending
upon its stated maturity date. See "Plan of Distribution."
(2) The Corporation has also agreed to indemnify the Agents against certain
liabilities under the Securities Act of 1933, as amended (the "Act").
(3) Before deducting expenses payable by the Corporation estimated at $300,000,
including reimbursement of certain expenses of the Agents.
The Notes are being offered on a continuous basis by the Corporation through
the Agents. The Notes will not be listed on any securities exchange, and there
can be no assurance that the Notes offered by this Prospectus Supplement will be
sold or that there will be a secondary market for the Notes or liquidity in the
secondary market if one develops. The Corporation reserves the right to
withdraw, cancel or modify the offer made hereby without notice. The Corporation
or any Agent, if it solicits an offer on an agency basis, may reject any offer
to purchase Notes, whether or not solicited, in whole or in part. See "Plan of
Distribution."
NATIONSBANC CAPITAL MARKETS, INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
The date of this Prospectus Supplement is December 20, 1994.
<PAGE>
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes supplements,
and to the extent inconsistent therewith, replaces, the description of the
general terms and provisions of the Debt Securities (as defined in the
accompanying Prospectus) set forth under the heading "Description of Debt
Securities" in the accompanying Prospectus. The following description will apply
to all the Notes unless otherwise specified in the applicable Pricing
Supplement.
GENERAL
The Notes will be limited to $1,000,000,000 in aggregate principal amount,
subject to reduction as a result of the sale of other Securities pursuant to the
accompanying Prospectus. The Notes will be either Senior Notes or Subordinated
Notes (referred to in the accompanying Prospectus as "Senior Debt Securities"
and "Subordinated Debt Securities," respectively). The Senior Notes will
constitute a single series of Senior Debt Securities to be issued under the
Indenture dated as of January 1, 1992, between the Corporation and BankAmerica
National Trust Company (successor to BankAmerica Trust Company of New York), as
Trustee (the "Senior Trustee"), as amended by the First Supplemental Indenture
thereto dated as of July 1, 1993 (as so amended and from time to time hereafter
amended, the "Senior Indenture"). The Subordinated Notes will constitute a
single series of Subordinated Debt Securities to be issued under the Indenture
dated as of November 1, 1992 between the Corporation and The Bank of New York,
as Trustee (the "Subordinated Trustee" and, together with the Senior Trustee,
the "Trustees"), as amended by the First Supplemental Indenture thereto dated as
of July 1, 1993 (as so amended and from time to time hereafter amended, the
"Subordinated Indenture"). The Senior Indenture and the Subordinated Indenture
are collectively referred to herein as the "Indentures."
The Senior Notes will be unsecured and unsubordinated obligations of the
Corporation and will rank equally with all unsecured senior debt of the
Corporation. The Subordinated Notes will be unsecured and will be subordinate
and junior in the right of payment, to the extent and in the manner set forth in
the Subordinated Indenture, to all Senior Indebtedness (as described in the
accompanying Prospectus) of the Corporation. There is no limitation on the
issuance of additional Senior Indebtedness of the Corporation. See "Description
of Debt Securities -- Subordination" in the accompanying Prospectus. The
Corporation had issued and outstanding $4.4 billion of unsecured, senior debt
instruments and $3.2 billion of unsecured, subordinate debt instruments at
November 30, 1994, including medium term notes.
There is no right of acceleration of the payment of principal of the
Subordinated Notes upon a default in the payment of principal of or interest on
such Notes or in the performance of any covenant of the Corporation contained in
the Subordinated Indenture. Payment of the principal of the Subordinated Notes
may be accelerated only in the case of the bankruptcy of the Corporation. See
"Description of Debt Securities -- Defaults and Rights of Acceleration" in the
accompanying Prospectus.
The Notes will be issued in fully registered form only, without coupons.
Unless otherwise specified in the applicable Pricing Supplement, the Notes will
be issued in book-entry only form and will be represented by one or more global
notes registered in the name of DTC or its nominee. Except as set forth herein,
Notes issued in book-entry form will not be issuable in certificated form
("Certificated Notes"). With respect to Notes issued in book-entry form, all
references herein to "Registered Holders" or "Holders" will be to DTC or its
nominee, and not to owners of beneficial interests in such Notes, except as
otherwise provided. See "Description of Notes -- Book-Entry System" below.
Unless otherwise specified in the applicable Pricing Supplement, the authorized
denominations of Notes will be $1,000 and any larger amount that is an integral
multiple of $1,000, and the principal of and any premium and interest on the
Notes will be denominated and payable in U.S. dollars only.
The Notes will be offered on a continuous basis and will mature on a
Business Day (as hereinafter defined) from nine months to thirty years from its
date of issue, as selected by the purchaser thereof and agreed to by the
Corporation. In addition, Floating Rate Notes will mature on an Interest Payment
Date (as hereinafter defined).
The Pricing Supplement relating to a Note will describe the following
terms: (i) whether such Note is a Fixed Rate Note or a Floating Rate Note; (ii)
the price (expressed as a percentage of the aggregate principal amount thereof)
at which such Note will be issued; (iii) the Original Issue Date; (iv) the
stated maturity date; (v) if such Note is a Fixed Rate Note, the rate per annum
at which such Note will bear interest; (vi) if such Note is a Floating Rate
Note, the Base Rate, the Initial Interest Rate, the Interest Reset Period, the
Interest Payment Dates, the Index Maturities, the Maximum Interest Rate, if any,
the Minimum Interest Rate, if any, the Spread and/or Spread Multiplier, if any
(each as hereinafter defined), and any other terms relating to the particular
method of calculating the interest rate for such Note; (vii) whether such Note
may be redeemed by the Corporation or repaid at the option of the registered
holder prior to its stated maturity date and, if so, the provisions
S-2
<PAGE>
relating to such redemption or repayment; (viii) whether such Note is a Senior
Note or a Subordinated Note; and (ix) any other terms of such Note not
inconsistent with the provisions of the applicable Indenture.
Unless otherwise specified in a Pricing Supplement, "Business Day" with
respect to any Note means any day, other than a Saturday or Sunday, that is (i)
not a day on which banking institutions are authorized or required by law or
regulation to be closed in The City of New York and (ii) if such Note is a LIBOR
Note (as hereinafter defined), a London Banking Day. "London Banking Day" with
respect to any Note means any day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.
PAYMENT OF PRINCIPAL AND INTEREST
The Notes will bear interest at a fixed rate, at floating rates determined
by reference to one or more of the Base Rates described below (which may be
adjusted by a Spread and/or Spread Multiplier applicable to such Floating Rate
Notes) or at any combination of fixed and floating rates until the principal
thereof is paid. Interest, if any, will be payable as specified under "Fixed
Rate Notes" and "Floating Rate Notes" below. Interest payable and punctually
paid on any date on which interest is payable (an "Interest Payment Date") and
on the stated maturity date or upon earlier redemption or repayment (such stated
maturity date or date of redemption or repayment, as the case may be, being
collectively hereinafter referred to as the "Maturity Date"), or on a later date
on which payment may be made hereunder in respect of such Interest Payment Date,
will be paid to the Registered Holder at the close of business on the Regular
Record Date (as hereinafter defined) next preceding such Interest Payment Date;
PROVIDED, HOWEVER, that the first payment of interest on any Note with an
Original Issue Date (as set forth in the applicable Pricing Supplement) between
a Regular Record Date and an Interest Payment Date or on an Interest Payment
Date will be made on the Interest Payment Date following the next succeeding
Regular Record Date to the Registered Holder on such next succeeding Regular
Record Date; PROVIDED, FURTHER, that interest payable at the Maturity Date will
be payable to the person to whom principal shall be payable.
Unless otherwise specified in the applicable Pricing Supplement, (i)
payments of principal of and any premium and interest on Notes issued in
book-entry form will be made in accordance with the arrangements from time to
time in place between the Paying Agent (as hereinafter defined) and DTC or its
nominee as Holder and (ii) payments of interest on Certificated Notes (other
than interest payable at the Maturity Date) generally will be made by check
mailed to the Holders of such Notes. Unless otherwise specified in the
applicable Pricing Supplement, principal and any premium and interest payable at
the Maturity Date of a Certificated Note will be paid by wire transfer of
immediately available funds upon surrender of such Note at the corporate trust
office or agency of the applicable Trustee.
Unless otherwise specified in the applicable Pricing Supplement, the
"Regular Record Date" with respect to any Interest Payment Date for a Note will
be the date (whether or not a Business Day) fifteen calendar days preceding such
Interest Payment Date, except that the Regular Record Date for a March 15
Interest Payment Date for a Fixed Rate Note will always be the February 28
(whether or not a Business Day) immediately preceding such Interest Payment
Date.
BOOK-ENTRY SYSTEM
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be issued in book-entry only form and will be represented by one or more
fully registered global securities (each, a "Global Book-Entry Note"). DTC will
act as securities depository for the Notes, and each Global Book-Entry Note will
be registered in the name of DTC or its nominee. Upon issuance, all Fixed Rate
Notes issued in book-entry form and having the same Original Issue Date and
otherwise identical terms will be represented by a single Global Book-Entry
Note, and all Floating Rate Notes issued in book-entry form and having the same
Original Issue Date and otherwise identical terms will be represented by a
single Global Book-Entry Note. So long as DTC or its nominee is the registered
owner of a Global Book-Entry Note, DTC or such nominee, as the case may be, will
be considered the sole owner or holder of the Notes represented by such Global
Book-Entry Note for all purposes under the applicable Indenture governing the
Notes.
Under DTC's book-entry system, purchases of Notes must be made by or
through persons that have accounts with DTC ("Participants") or persons that may
hold interests through Participants ("Indirect Participants"). Upon the issuance
of a Global Book-Entry Note, DTC or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the
individual Notes represented by such Global Book-Entry Note to the accounts of
Participants as designated by the applicable Agent. The ownership of beneficial
interests in each such Global Book-Entry Note will be shown on, and the transfer
of that ownership will be effected only through, records maintained by DTC or
its nominee (with respect to interests of Participants), the records of
Participants (with respect to interests of Indirect Participants) or on the
records of Indirect Participants. Except as provided below, owners of beneficial
interests in a Global Book-Entry Note will
S-3
<PAGE>
not be entitled to have Notes that are represented by such Global Book-Entry
Note registered in their names and will not receive or be entitled to receive
physical delivery of such Notes in certificated form. The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in certificated form. Such transfer restrictions and such laws may
impair the ability to own, transfer or pledge beneficial interests in a Global
Book-Entry Note.
Payments of principal of and any premium and interest on individual Notes
represented by a Global Book-Entry Note registered in the name of DTC or its
nominee will be made only to DTC or its nominee, as the case may be, as the
Registered Holder of the Global Book-Entry Note representing such Notes. DTC has
advised the Corporation and the Agents that it is DTC's practice to credit
Participants' accounts on the payable date in accordance with their respective
holdings with respect to a Global Book-Entry Note as shown on DTC's records,
unless DTC has reason to believe that it will not receive payment on such date.
Payments by Participants to beneficial owners are governed by standing
instructions and customary practices, as is the case with securities held in
"street name." Such instructions will be the responsibility of such Participant
and not of DTC, the Agents or the Corporation, subject to any statutory or
regulatory requirements as may be in effect from time to time. The Corporation
will in every case be discharged by payment to, or to the order of, DTC or its
nominee, as the Holder of such Global Book-Entry Note, of the amount so paid.
Each of the persons shown in the records of DTC or its nominee as an owner of a
beneficial interest therein must look solely to DTC or its nominee, as the case
may be, for its share of any such payment so made by the Corporation. Neither
the Corporation, the Trustee for such Notes, nor any Paying Agent, Registrar or
Transfer Agent for such Notes will have any responsibility or liability for any
aspect of the records relating to or payments made on account of owners of
beneficial interests in a Global Book-Entry Note or for maintaining, supervising
or reviewing any records relating to such beneficial interests.
DTC has advised the Corporation and the Agents as follows: DTC is a
limited-purpose trust company organized under New York law, a "banking
organization" within the meaning of New York law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code as in effect in the State of New York and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC was created to hold securities deposited by its
Participants and to facilitate the clearance and settlement of securities
transactions among its Participants in such securities through electronic
computerized book-entry changes in accounts of the Participants, thereby
eliminating the need for physical movement of securities certificates. DTC's
direct Participants include securities brokers and dealers (including one or
more of the Agents), banks (including certain subsidiaries of the Corporation),
trust companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) have ownership interests in DTC. DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Indirect access to DTC's book-entry system is also
available to Indirect Participants, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly. The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
To facilitate subsequent transfers, all securities deposited by a
Participant with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual beneficial owners of securities deposited with it such as the Notes;
DTC's records reflect only the identity of the Participants to whose accounts
such securities are credited, which may or may not be the beneficial owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers. Conveyance of notices and other communications by DTC
to Participants, by Participants to Indirect Participants, and by Participants
and Indirect Participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time. Neither DTC nor Cede & Co. will consent or vote with
respect to securities held by DTC. Under its usual procedures, DTC mails an
Omnibus Proxy to an issuer as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Participants to whose accounts the securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
DTC can act only on behalf of Participants, who in turn act on behalf of
Indirect Participants. Owners of beneficial interests in a Global Book-Entry
Note that are not Participants or Indirect Participants but desire to purchase,
sell or otherwise transfer ownership of such interests may do so only through
Participants and Indirect Participants. In addition, the ability of owners of
beneficial interests in a Global Book-Entry Note to pledge such interests to
persons or entities that do not participate in the DTC system may be limited due
to the lack of certificates for the Notes. Currently, DTC may only transmit and
receive payments in U.S. dollars.
S-4
<PAGE>
If DTC is at any time unwilling, unable or ineligible to continue as
depository and a successor depository is not appointed by the Corporation within
90 days, the Corporation will issue individual registered Certificated Notes in
exchange for Notes issued in book-entry form. In addition, the Corporation may
at any time determine not to have Notes represented by one or more Global
Book-Entry Notes and, in such event, will issue individual registered
Certificated Notes in place of each Note represented by all such Global
Book-Entry Notes. In either instance, an owner of a beneficial interest in a
Global Book-Entry Note will be entitled to physical delivery of Certificated
Notes equal in principal amount to such beneficial interest and to have such
Notes registered in its name. Individual Notes so issued in certificated form
will be issued in denominations of $1,000 or integral multiples thereof.
PAYING AGENT, REGISTRAR AND TRANSFER AGENT
Until the Notes are paid, the Corporation will, at all times, maintain a
Paying Agent, Registrar and Transfer Agent, which may or may not be the same
person, for the Senior Notes and the Subordinated Notes. The Corporation has
initially appointed NationsBank of Georgia, National Association, as Paying
Agent, Registrar and Transfer Agent with respect to each of the Senior Notes and
Subordinated Notes. The Corporation reserves the right at any time to vary or
terminate the appointment of any Paying Agent, Registrar and Transfer Agent, to
appoint additional Paying Agents, Registrars and Transfer Agents and to approve
any change in the office through which the Paying Agent, Registrar or Transfer
Agent shall act.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date at the
rate per annum stated on the face thereof until the principal amount thereof is
paid. Unless otherwise specified in the applicable Pricing Supplement, interest
on each Fixed Rate Note will be computed on the basis of a 360-day year of
twelve 30-day months and will be payable semi-annually in arrears on June 15 and
December 15 of each year during the term of the Note (each an "Interest Payment
Date") and on the Maturity Date. If any Interest Payment Date or the Maturity
Date of a Fixed Rate Note falls on a day that is not a Business Day, the payment
will be made on the next succeeding Business Day as if it were made on the date
such payment was due, and no additional interest will accrue on the amount so
payable for the period from and after such Interest Payment Date or the Maturity
Date, as the case may be. Interest payments will be in the amount of interest
accrued from and including the next preceding Interest Payment Date in respect
of which interest has been paid or duly provided for (or from and including the
Original Issue Date if no interest has been paid or duly provided for with
respect to such Note) to but excluding the Interest Payment Date or Maturity
Date, as the case may be.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Original Issue Date at
the rates determined as described below until the principal amount thereof is
paid. Unless otherwise specified in the applicable Pricing Supplement, interest
on Floating Rate Notes will be determined by reference to an interest rate basis
(the "Base Rate"), which may be (i) the CD Rate (a "CD Rate Note"), (ii) the
Commercial Paper Rate (a "Commercial Paper Rate Note"), (iii) LIBOR (a "LIBOR
Note"), (iv) the Federal Funds Rate (a "Federal Funds Rate Note"), (v) the Prime
Rate (a "Prime Rate Note"), (vi) the Treasury Rate (a "Treasury Rate Note") or
(vii) such other Base Rate as may set forth in the applicable Pricing Supplement
and in such Note. The Base Rate will be based upon one or more selected Index
Maturities (as hereinafter defined) and adjusted by a Spread and/or Spread
Multiplier (each as hereinafter defined), if any, as specified in the applicable
Pricing Supplement. The interest rate on each Floating Rate Note will be
calculated by reference to the specified Base Rate, plus or minus the Spread
and/or multiplied by the Spread Multiplier, if any. The "Index Maturity" is the
period to maturity of the instrument or obligation with respect to which the
Base Rate is calculated. The "Spread" is the number of basis points above or
below the Base Rate applicable to such Floating Rate Note, and the "Spread
Multiplier" is the percentage of the Base Rate applicable to the interest rate
for such Floating Rate Note. The Spread, Spread Multiplier, Index Maturity and
other variable terms of the Floating Rate Notes are subject to change by the
Corporation from time to time, but no such change will affect any Floating Rate
Note previously issued or as to which an offer to purchase has been accepted by
the Corporation.
As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following (in each case expressed as a rate per
annum on a simple interest basis): (i) a maximum rate at which interest may
accrue during any interest period ("Maximum Interest Rate") and (ii) a minimum
rate at which interest may accrue during any interest period ("Minimum Interest
Rate"). In addition to any such Maximum Interest Rate, the interest rate on a
Floating Rate Note will in no event be higher than the maximum rate permitted by
applicable law, as the same may be modified by United States law of general
application. Under current New York law, the maximum rate of interest (for any
loan in the
S-5
<PAGE>
amount of $250,000 or more) is 25% per annum on a simple interest basis. This
limit may not apply to Notes in which $2,500,000 or more has been invested.
The interest rate on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually (such period being the "Interest
Reset Period" for such Note and the first day of each Interest Reset Period
being an "Interest Reset Date"), as specified in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing Supplement, the
Interest Reset Date will be (i) in the case of Floating Rate Notes that reset
daily, each Business Day; (ii) in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, Wednesday of each week; (iii) in the
case of Treasury Rate Notes that reset weekly, Tuesday of each week; (iv) in the
case of Floating Rate Notes that reset monthly, the third Wednesday of each
month; (v) in the case of Floating Rate Notes that reset quarterly, the third
Wednesday of March, June, September and December of each year; (vi) in the case
of Floating Rate Notes that reset semi-annually, the third Wednesday of each of
two months of each year specified in the applicable Pricing Supplement; and
(vii) in the case of Floating Rate Notes that reset annually, the third
Wednesday of one month of each year specified in the applicable Pricing
Supplement. If an Interest Reset Date for any Floating Rate Note would otherwise
be a day that is not a Business Day, such Interest Reset Date will be postponed
to the next succeeding Business Day, except that in the case of a LIBOR Note, if
the next succeeding Business Day is in the next succeeding calendar month, such
Interest Reset Date will be the next preceding Business Day. If a Treasury bill
auction (as described below) will be held on any day that would otherwise be an
Interest Reset Date for a Treasury Rate Note, then such Interest Reset Date will
instead be the Business Day following such auction date.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate in effect with respect to a Floating Rate Note during the period
commencing on an Interest Reset Date will be the rate determined on the
"Interest Determination Date." The "Interest Determination Date" with respect to
an Interest Reset Date for a CD Rate Note, Commercial Paper Rate Note, Federal
Funds Rate Note or Prime Rate Note will be the second Business Day preceding
such Interest Reset Date. The Interest Determination Date with respect to an
Interest Reset Date for a LIBOR Note will be the second London Banking Day
preceding such Interest Reset Date. The Interest Determination Date with respect
to an Interest Reset Date for a Treasury Rate Note will be the day of the week
in which such Interest Reset Date falls on which Treasury bills of the Index
Maturity specified on the face of such Treasury Rate Note are auctioned.
Treasury bills are normally sold at auction on Monday of each week. If such day
is a legal holiday, the auction is normally held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Interest Determination Date with respect to the Interest Reset Date
occurring in the succeeding week.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate in effect with respect to a Floating Rate Note on each day that is
not an Interest Reset Date will be the interest rate determined as of the
Interest Determination Date pertaining to the immediately preceding Interest
Reset Date, and the interest rate in effect on any day that is an Interest Reset
Date will be the interest rate determined as of the Interest Determination Date
pertaining to such Interest Reset Date, subject in either case to any Maximum or
Minimum Interest Rate limitation referred to above; PROVIDED, HOWEVER, that the
interest rate in effect with respect to a Floating Rate Note for the period from
the Original Issue Date to the initial Interest Reset Date (the "Initial
Interest Rate") will be specified in the applicable Pricing Supplement, if
available, and, unless otherwise specified in the applicable Pricing Supplement,
the interest rate in effect for the ten calendar days immediately prior to the
Maturity Date (with respect to any amount to be redeemed or repaid) will be the
interest rate in effect on the tenth calendar day preceding such Maturity Date.
The interest rate on a Floating Rate Note for the initial Interest Payment
Period and for the final Interest Payment Period may be based upon a different
Index Maturity and therefore result in a different interest rate for such
Interest Payment Periods.
Interest on each Floating Rate Note will be payable monthly, quarterly,
semi-annually or annually (the "Interest Payment Period"), as specified in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement and except as provided below, the date or dates on which
interest will be payable (each an "Interest Payment Date") will be (i) in the
case of Floating Rate Notes with a monthly Interest Payment Period, the third
Wednesday of each month; (ii) in the case of Floating Rate Notes with a
quarterly Interest Payment Period, the third Wednesday of March, June, September
and December of each year; (iii) in the case of Floating Rate Notes with a
semi-annual Interest Payment Period, the third Wednesday of each of two months
of each year specified in the applicable Pricing Supplement; (iv) in the case of
Floating Rate Notes with an annual Interest Payment Period, the third Wednesday
of one month of each year specified in the applicable Pricing Supplement; and
(v) in each case, on the Maturity Date.
Interest payments will be in the amount of interest accrued from and
including the next preceding Interest Payment Date in respect of which interest
has been paid or duly provided for (or from and including the Original Issue
Date if no interest
S-6
<PAGE>
has been paid or duly provided for with respect to such Note) to but excluding
the Interest Payment Date or the Maturity Date, as the case may be. However, in
the case of Floating Rate Notes on which the interest rate is reset daily or
weekly, unless otherwise specified in the applicable Pricing Supplement,
interest payments on each Interest Payment Date will be in the amount of
interest accrued from but excluding the Regular Record Date through which
interest has been paid (or from and including the Original Issue Date if no
interest has been paid or duly provided for with respect to such Note) to and
including the Regular Record Date next preceding the applicable Interest Payment
Date, except that the interest payment due on the Maturity Date will include
interest accrued to but excluding such date.
If any Interest Payment Date for any Floating Rate Note would fall on a day
that is not a Business Day with respect to such Note, such Interest Payment Date
will be the following day that is a Business Day with respect to such Note,
except that, in the case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date will be the immediately
preceding day that is a Business Day with respect to such LIBOR Note. If the
Maturity Date of any Floating Rate Note falls on a day that is not a Business
Day, the payment of principal and any premium or interest may be made on the
next Business Day as if it were made on the date such payment was due, and no
additional interest will accrue on the amount so payable for the period from and
after the Maturity Date.
Unless otherwise specified in the applicable Pricing Supplement, accrued
interest on any Floating Rate Note will be calculated by multiplying the
principal amount of such Note by an accrued interest factor. Such accrued
interest factor will be computed by adding the interest factor calculated for
each day from and including the Original Issue Date, or from but excluding the
last date to which interest has been paid, as the case may be, to and including
the date for which accrued interest is being calculated. Unless otherwise
specified in the applicable Pricing Supplement, the interest factor (expressed
as a decimal) for each such day is computed by dividing the interest rate in
effect on such day by the actual number of days in the year, in the case of
Treasury Rate Notes, and by 360, in the case of other Floating Rate Notes.
Unless otherwise specified in the applicable Pricing Supplement,
NationsBank of Georgia, National Association, will be the calculation agent for
each Senior Note or Subordinated Note which is a Floating Rate Note (referred to
herein as the "Calculation Agent"). Upon the request of the holder of any
Floating Rate Note, the Calculation Agent will provide the interest rate then in
effect and, if determined, the interest rate that will become effective as a
result of a determination made for the next Interest Reset Date with respect to
such Floating Rate Note. The Calculation Agent will also make certain
calculations, specified below, on or prior to the "Calculation Date." Unless
otherwise specified in the applicable Pricing Supplement, the "Calculation
Date," if applicable, pertaining to any Interest Determination Date will be the
earlier of (i) the tenth calendar day after such Interest Determination Date or,
if such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day next preceding the applicable Interest Payment Date or Maturity
Date, as the case may be.
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation on Floating Rate Notes will be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upward (E.G., 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts
used or resulting from such calculation on Floating Rate Notes will be rounded
to the nearest cent (with one-half cent being rounded upward).
The interest rate that will become effective on each subsequent Interest
Reset Date will be determined by the Calculation Agent (calculated with
reference to the Base Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable Pricing Supplement) as follows (such determination,
in the absence of manifest error, to be binding upon all parties):
CD RATE: Unless otherwise specified in the applicable Pricing Supplement,
"CD Rate" means, with respect to an Interest Determination Date relating to a CD
Rate Note (the "CD Rate Interest Determination Date"), the rate on such CD Rate
Interest Determination Date for negotiable certificates of deposit having the
Index Maturity specified in the applicable Pricing Supplement, as such rate is
published by the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") in "Statistical Release H.15(519), Selected Interest Rates," or
any successor publication of the Federal Reserve Board ("H.15(519)"), under the
heading "CDs (Secondary Market)." If H.15(519) is not so published by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such CD Rate Interest
Determination Date, the CD Rate will be the rate on such CD Rate Interest
Determination Date for negotiable certificates of deposit of the Index Maturity
specified in the applicable Pricing Supplement, as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Certificates of Deposit." If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in Composite Quotations, the CD
Rate for such CD Rate Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 a.m., New York City time, on such CD Rate Interest
Determination Date, of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New
S-7
<PAGE>
York selected by the Calculation Agent, after consultation with the Corporation,
for negotiable certificates of deposit in denominations of $5,000,000 of major
United States money center banks of the highest credit standing (in the market
for negotiable certificates of deposit) with a remaining maturity closest to the
Index Maturity specified in the applicable Pricing Supplement. However, if such
dealers are not so quoting such rates, the CD Rate for such CD Rate Interest
Determination Date will be the CD Rate in effect on such CD Rate Interest
Determination Date.
COMMERCIAL PAPER RATE: Unless otherwise specified in the applicable Pricing
Supplement, "Commercial Paper Rate" means, with respect to an Interest
Determination Date relating to a Commercial Paper Note (a "Commercial Paper Rate
Interest Determination Date"), the Money Market Yield (as hereinafter defined)
of the rate on such Commercial Paper Rate Interest Determination Date for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement as published in H.15(519) under the heading "Commercial Paper." If
such rate is not so published by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Commercial Paper Rate Interest Determination
Date, the Commercial Paper Rate will be the Money Market Yield on such
Commercial Paper Rate Interest Determination Date of the rate for commercial
paper of the Index Maturity specified in the applicable Pricing Supplement as
published in Composite Quotations under the heading "Commercial Paper." If by
3:00 p.m., New York City time, on such Calculation Date such rate is not yet
published in Composite Quotations, the Commercial Paper Rate for such Commercial
Paper Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the Money Market Yield of the arithmetic mean of the offered
rates, as of 11:00 a.m., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in The
City of New York (which may include the Calculation Agent or its affiliates)
selected by the Calculation Agent, after consultation with the Corporation, for
commercial paper of the Index Maturity specified in the applicable Pricing
Supplement placed for an industrial issuer whose bond rating is "AA" or the
equivalent by a nationally recognized rating agency. However, if such dealers
are not so quoting such rates, the Commercial Paper Rate for such Commercial
Paper Rate Interest Determination Date will be the Commercial Paper Rate then in
effect on such Commercial Paper Rate Interest Determination Date.
"Money Market Yield" will be a yield calculated in accordance with the
following formula:
Money Market Yield = [(D x 360) / (360 - (D x M))] 100
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
LIBOR: Unless otherwise specified in the applicable Pricing Supplement,
"LIBOR" means the rate determined by the Calculation Agent in accordance with
the following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note (a "LIBOR Interest Determination Date"), LIBOR will be "LIBOR
Telerate" unless "LIBOR Reuters" is specified in the applicable pricing
supplement or LIBOR Telerate is not available. "LIBOR Telerate" is the rate
for deposits in the LIBOR Currency (as defined below) having the Index
Maturity designated in the applicable Pricing Supplement that appears on
the Designated LIBOR Page (as defined below) specified in the applicable
Pricing Supplement as of 11:00 A.M. London time, on that LIBOR Interest
Determination Date. "LIBOR Reuters" is that rate which is the arithmetic
mean of the offered rates (unless the specified Designated LIBOR Page by
its terms provides only for a single rate, in which case such single rate
shall be used) for deposits in the LIBOR Currency having the Index Maturity
designated in the applicable Pricing Supplement that appear on the
Designated LIBOR Page specified in the applicable Pricing Supplement as of
11:00 A.M. London time, on that LIBOR Interest Determination Date, if at
least two such offered rates appear (unless, as aforesaid, only a single
rate is required) on such Designated LIBOR Page. If LIBOR cannot be
determined under this clause (i), LIBOR in respect of the related LIBOR
Interest Determination Date will be determined as if the parties had
specified the rate described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
LIBOR cannot be determined under clause (i) above, the Calculation Agent
will request the principal London offices of each of four major reference
banks in the London interbank market, as selected by the Calculation Agent,
after consultation with the Corporation, to provide the Calculation Agent
with its offered quotation for deposits in the LIBOR Currency for the
period of the Index Maturity designated in the applicable Pricing
Supplement to prime banks in the London interbank market at approximately
11:00 A.M., London time, on such LIBOR Interest Determination Date and in a
principal amount that is representative for a single transaction in such
LIBOR Currency in such market at such time. If at least two such quotations
are provided, LIBOR determined on such LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer
S-8
<PAGE>
than two such quotations are provided, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M. (or such other time specified in the applicable
Pricing Supplement), in the applicable Principal Financial Center (as
defined below), on such LIBOR Interest Determination Date by three major
banks in such Principal Financial Center selected by the Calculation Agent,
after consultation with the Corporation, for loans in the LIBOR Currency to
leading European banks, having the Index Maturity designated in the
applicable Pricing Supplement and in a principal amount that is
representative for a single transaction in such LIBOR Currency in such
market at such time; provided, however, that if the banks so selected by
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined on such LIBOR Interest Determination Date will be LIBOR then in
effect on such LIBOR Interest Determination Date.
"LIBOR Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the LIBOR Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Telerate" is designated
in the applicable Pricing Supplement, the display on the Dow Jones Telerate
Service for the purpose of displaying the London interbank rates of major banks
for the applicable LIBOR Currency, or (b) if "LIBOR Reuters" is designated in
the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable LIBOR Currency. If neither LIBOR Telerate nor LIBOR
Reuters is specified in the applicable Pricing Supplement, LIBOR for the
applicable LIBOR Currency will be determined as if LIBOR Telerate (and, if the
U.S. dollar is the LIBOR Currency, LIBO Page) had been specified.
"Principal Financial Center" will generally be the capital city of the
country of the specified LIBOR Currency, except that with respect to U.S.
dollars, Deutsche marks and ECUs, the Principal Financial Center shall be The
City of New York, Frankfurt, and Luxembourg, respectively.
FEDERAL FUNDS RATE: Unless otherwise specified in the applicable Pricing
Supplement, "Federal Funds Rate" means, with respect to an Interest
Determination Date relating to a Federal Funds Rate Note (a "Federal Funds Rate
Interest Determination Date"), the rate on such Interest Determination Date for
Federal Funds as published in H.15(519) under the heading "Federal Funds
(Effective)." If H.15(519) is not so published by 3:00 p.m., New York City time,
on the Calculation Date pertaining to such Federal Funds Rate Interest
Determination Date, the Federal Funds Rate will be the rate on such Federal
Funds Rate Interest Determination Date for Federal Funds as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If by
3:00 p.m., New York City time, on such Calculation Date such rate is not yet
published in Composite Quotations, the Federal Funds Rate for such Federal Funds
Rate Interest Determination Date will be calculated by the Calculation Agent and
will be the arithmetic mean of the rates for the last transaction in overnight
Federal Funds as of 9:00 a.m., New York City time, on such Federal Funds Rate
Interest Determination Date quoted by each of three leading brokers of Federal
Funds transactions in The City of New York selected by the Calculation Agent,
after consultation with the Corporation. However, if fewer than three such
brokers are so quoting such rates, the Federal Funds Rate for such Federal Funds
Rate Interest Determination Date with respect to any Federal Funds Rate Note
will be the Federal Funds Rate then in effect on such Federal Funds Rate
Interest Determination Date.
PRIME RATE: Unless otherwise specified in the applicable Pricing
Supplement, "Prime Rate" means, with respect to an Interest Determination Date
relating to a Prime Rate Note (a "Prime Rate Interest Determination Date"), the
rate set forth on such date in H.15(519) under the heading "Bank Prime Loan," or
if not so published prior to 9:00 a.m., New York City time, on the Calculation
Date pertaining to such Prime Rate Interest Determination Date, then the Prime
Rate will be determined by the Calculation Agent and will be the arithmetic mean
of the rates of interest publicly announced by each bank that appears on the
Reuters Screen NYMF Page (as defined below) as such bank's prime rate or base
lending rates as in effect for that Prime Rate Interest Determination Date. If
fewer than four such rates but more than one such rate appear on the Reuters
Screen NYMF Page for the Prime Rate Interest Determination Date, the Prime Rate
will be determined by the Calculation Agent and will be the arithmetic mean of
the prime rates, quoted on the basis of the actual number of days in the year
divided by a 360-day year, as of the close of business on such Prime Rate
Interest Determination Date by four major money center banks in The City of New
York selected by the Calculation Agent, after consultation with the Corporation.
If fewer than two such rates appear on the Reuters Screen NYMF Page, the Prime
Rate will be determined by the Calculation Agent, as of the close of business on
the Prime Rate Interest Determination Date, on the basis of the prime rates, as
of the close of business on the Prime Rate Interest Determination Date,
furnished in The City of New York by the appropriate number of substitute banks
or trust companies organized and doing business under the laws of the United
States, or any State thereof, having total equity capital of at least
$500,000,000 and being subject to supervision or examination by Federal or State
authority, selected
S-9
<PAGE>
by the Calculation Agent, after consultation with the Corporation, to provide
such rate or rates; PROVIDED, HOWEVER, that if the banks selected as aforesaid
are not quoting as mentioned in this sentence, the Prime Rate for such Prime
Rate Interest Determination Date will be the Prime Rate then in effect on such
Prime Rate Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
TREASURY RATE: Unless otherwise specified in the applicable Pricing
Supplement, "Treasury Rate" means, with respect to an Interest Determination
Date relating to a Treasury Rate Note (a "Treasury Rate Interest Determination
Date"), the rate for the auction held on such Treasury Rate Interest
Determination Date of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified in the applicable Pricing Supplement, as
published in H.15(519) under the heading "U.S. Government Securities-Treasury
bills-auction average (investment)." If such rate is not published by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such Treasury Rate
Interest Determination Date, the Treasury Rate will be the auction average rate
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) on such Treasury Rate Interest
Determination Date as otherwise announced by the United States Department of the
Treasury, provided that if by 3:00 p.m., New York City time, on such Calculation
Date, such rate is not yet published or reported as provided above or if no such
auction is held on such Treasury Rate Interest Determination Date, then the
Treasury Rate for such Treasury Rate Interest Determination Date will be a yield
to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on such Treasury Rate Interest Determination Date, of three leading primary
United States government securities dealers selected by the Calculation Agent,
after consultation with the Corporation, for the issue of Treasury bills with a
remaining maturity closest to the Index Maturity specified in the applicable
Pricing Supplement. However, if such dealers are not so quoting such rates, the
Treasury Rate for such Treasury Rate Interest Determination Date with respect to
any Treasury Rate Note will be the Treasury Rate then in effect on such Treasury
Date Interest Determination Date.
REDEMPTION
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to its stated maturity date or that such Note will
be redeemable at the option of the Corporation on a date or dates specified
prior to its stated maturity date and at a price or prices as set forth in the
applicable Pricing Supplement, together with accrued interest to the date of
redemption. The Corporation may redeem any of the Notes that are redeemable and
remain outstanding either in whole or from time to time in part, upon not less
than 30 nor more than 60 days' notice. If less than all of the Notes with like
tenor and terms are to be redeemed, the Notes to be redeemed will be selected by
the applicable Trustee by such method as such Trustee deems fair and appropriate
pursuant to the terms of the respective Indentures.
The Notes will not be subject to any sinking fund.
REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid at the option of the Holder prior to its stated maturity
date or that such Note will be repayable at the option of the Holder on a date
or dates specified prior to its stated maturity date and at a price or prices as
set forth in the applicable Pricing Supplement, together with accrued interest
to the date of repayment.
The Corporation may at any time purchase Notes at any price in the open
market or otherwise. Notes so purchased by the Corporation may, at its
discretion, be held, resold or surrendered to the applicable Trustee for
cancellation.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to the determination of a Base Rate, the
specification of Base Rates, calculation of the interest rate applicable to a
Floating Rate Note, its Interest Payment Dates or any other matter relating
thereto or to any Fixed Rate Note may be modified by the terms as specified
under "Other Provisions" on the face thereof or in an Addendum thereto, if so
specified on the face of such Note and in the applicable Pricing Supplement.
S-10
<PAGE>
UNITED STATES TAXATION
The following summary of the principal United States Federal income tax
consequences of the acquisition, ownership and disposition of Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change. The following discussion does not purport to deal with the
Federal tax consequences applicable to all categories of investors. In
particular, the discussion does not deal with persons in special tax situations,
such as dealers in securities, insurance companies, financial institutions or
tax-exempt entities. It is based upon the United States Federal tax laws and
regulations as now in effect and as currently interpreted and does not take into
account possible changes in such tax laws or such interpretations. It does not
include any description of the tax laws of any state or local governments, or of
any foreign government, that may be applicable to the Notes or holders thereof.
Investors should consult their own tax advisors with respect to their particular
circumstances.
UNITED STATES HOLDERS
The term "United States Holder," as used herein, means a holder of a
beneficial interest in a Note that is a United States person for United States
Federal income tax purposes or any other holder of a beneficial interest in a
Note to the extent the income attributable to the Note is effectively connected
with the holder's United States trade or business.
PAYMENT OF INTEREST. Except as described below under "Original Issue
Discount" and "Short-Term Notes," interest on a Note generally will be taxable
to a holder that is a United States Holder as ordinary income at the time it
accrues or is received in accordance with the United States Holder's method of
accounting for tax purposes.
PURCHASE, SALE AND RETIREMENT OF NOTES. Upon the sale, exchange, retirement
or other disposition of a Note, a United States Holder will recognize gain or
loss equal to the difference between the amount realized and the United States
Holder's tax basis in the Note.
A United States Holder's tax basis in a Note generally will be the United
States Holder's cost for the Note, increased by any original issue discount, or
market discount (if the holder has elected to include accrued market discount in
income on a current basis) previously included in income by such United Stares
Holder with respect to such Note, and decreased by the amount of any bond
premium previously amortized by such United States Holder with respect to such
Note, and the amount of any payment (other than a payment of qualified stated
interest) previously received by such United States Holder with respect to the
Note. Gain or loss on the sale, exchange, retirement or other disposition of a
Note generally will be a long-term capital gain or loss if the Note has been
held for more than one year, except to the extent (as discussed below) that gain
represents market discount not previously included in the holder's income.
If a United States Holder has a tax basis for a Note that is less than its
principal amount, the Note may be considered to have "market discount." As a
general matter, gain on disposition of a Note (or on repayment of principal) is
treated as ordinary income rather than capital gain to the extent of market
discount accrued while the holder held the Note, although holders may elect to
accrue market discount into income on a current basis. An election to accrue
market discount, once made, will apply to all market discount obligations
acquired by the holder on or after the first day of the first taxable year for
which the election is made and may not be revoked without the consent of the
Internal Revenue Service (the "IRS"). Market discount will be treated as
accruing on a ratable basis or, at the election of the holder, based on a
constant interest method. Furthermore, a holder of a Note having market discount
may be required to defer the deduction of all or a portion of the interest
expense on any indebtedness incurred or maintained to purchase or carry such
Note until the maturity date of the Note or its earlier disposition in a taxable
transaction unless the holder elects to include market discount in income on a
current basis as described above.
If a United States Holder has a tax basis for a Note that is greater than
its principal amount, the Note may be considered to have "bond premium." The
holder may elect to amortize such premium (as offsets to interest income) over
the remaining life of the Note under a constant interest method. However, if
such Note may be optionally redeemed after the holder acquires it at a price in
excess of its principal amount, special rules would apply that could result in a
deferral of the amortization of some bond premium until later in the term of the
Note. With respect to a holder that does not elect to amortize bond premium, the
amount of bond premium constitutes a capital loss when the bond matures or is
sold.
ORIGINAL ISSUE DISCOUNT. On January 27, 1994, the IRS issued final
regulations under Sections 1271 through 1275 of the Internal Revenue Code of
1986, as amended (the "Code"), dealing with original issue discount (the "Final
Regulations") effective for debt instruments issued after April 4, 1994. The
following summary of the Federal income tax consequences of the Notes with
respect to original issue discount ("OID") is based on the Final Regulations.
Each potential purchaser of a Note should consult its own tax advisor.
S-11
<PAGE>
For United States Federal income tax purposes, OID is the excess of the
stated redemption price at maturity of a debt instrument (the sum of all
payments required to be made on the debt instrument other than qualified stated
interest payments) over its issue price (the first offering price to the public
at which a substantial amount of the debt instrument is sold), if that excess
equals or exceeds 1/4 of 1 percent of the debt instrument's stated redemption
price at maturity multiplied by the number of complete years from its issue date
to its maturity. The term "qualified stated interest" generally means stated
interest that is unconditionally payable in cash or property (other than debt
instruments of the issuer) at least annually at a single fixed rate. In
addition, under the Final Regulations if a Note bears interest for one or more
accrual periods at a rate below the rate applicable for the remaining term of
such Note (E.G., Notes with teaser rates or interest holidays), and if the
greater of either the resulting foregone interest on such Note or the excess of
the stated principal amount over its issue price equals or exceeds a DE MINIMIS
amount, then the stated interest would be treated as OID rather than qualified
stated interest.
A United States Holder of a Note is required to include payments of
qualified stated interest in income as interest at the time such payments are
accrued or are received (in accordance with the United States Holder's method of
accounting for tax purposes). A United States Holder of a Note with OID (an "OID
Note") with a maturity of more than one year is required to include the OID in
income before the receipt of cash attributable to that income, regardless of
such United States Holder's method of accounting for tax purposes. The amount of
OID includible in income by the initial United States Holder of an OID Note is
the sum of the daily portions of the OID with respect to the Note for each day
during the taxable year (or portion of the taxable year) in which the United
States Holder held such OID Note. The daily portion is determined by allocating
to each day in any "accrual period" a pro rata portion of the OID allocable to
that accrual period. An accrual period may be of any length and the accrual
periods may even vary in length over the term of the OID Note, provided that
each accrual period is no longer than one year and each scheduled payment of
principal or interest occurs either on the first day of an accrual period or on
the final day of an accrual period. The amount of OID allocable to an accrual
period is equal to the difference between (i) the product of the "adjusted issue
price" of the OID Note at the beginning of the accrual period and its yield to
maturity (computed generally on a constant yield method and compounded at the
end of each accrual period, appropriately taking into account the length of the
particular accrual period) and (ii) the amount of any qualified stated interest
allocable to the accrual period. The "adjusted issue price" of an OID Note at
the beginning of any accrual period is the sum of the issue price of the OID
Note plus the amount of OID allocable to all prior accrual periods reduced by
any payments on the Note that were not qualified stated interest. Under these
rules, a United States Holder will generally have to include in income
increasingly greater amounts of OID in successive accrual periods.
A United States Holder who purchases an OID Note for an amount that is
greater than its adjusted issue price as of the purchase date and less than or
equal to the sum of all amounts payable on the OID Note after the purchase date
other than payments of qualified stated interest, will be considered to have
purchased the OID Note at an "acquisition premium." Under the acquisition
premium rules, the amount of OID which such United States Holder must include in
its gross income with respect to such Note for any taxable year (or portion
thereof in which the United States Holder holds the Note) will be reduced (but
not below zero) by the portion of the acquisition premium properly allocable to
the period.
Under the Final Regulations, Floating Rate Notes are subject to special
rules whereby a Floating Rate Note will qualify as a "variable rate debt
instrument" if (a) its issue price does not exceed the total noncontingent
principal payments by more than a specified DE MINIMIS amount and (b) it
provides for stated interest, paid or compounded at least annually, at current
values of (i) one or more qualified floating rates, (ii) a single fixed rate and
one or more qualified floating rates, (iii) a single objective rate or (iv) a
single fixed rate and a single objective rate that is a qualified inverse
floating rate. A "qualified floating rate" is any floating rate where variations
in such rate can reasonably be expected to measure contemporaneous variations in
the cost of newly borrowed funds in the currency in which the Floating Rate Note
is denominated (E. G., the CD Rate, the Commercial Paper Rate, the Federal Funds
Rate, LIBOR, the Prime Rate or the Treasury Rate.) Although a multiple of a
qualified floating rate will generally not itself constitute a qualified
floating rate, a variable rate equal to the product of a qualified floating rate
and a fixed multiple that is greater than zero but not more than 1.35 will
constitute a qualified floating rate. A variable rate equal to the product of a
qualified floating rate and a fixed multiple that is greater than zero but not
more than 1.35, increased or decreased by a fixed rate, will also constitute a
qualified floating rate. In addition, under the Final Regulations, two or more
qualified floating rates that can reasonably be expected to have approximately
the same values throughout the term of the Floating Rate Note (e.g., two or more
qualified floating rates with values within 25 basis points of each other as
determined on the Floating Rate Note's issue date) will be treated as a single
qualified floating rate. Notwithstanding the foregoing, a variable rate that
would otherwise constitute a qualified floating rate but which is subject to one
or more restrictions such a maximum numerical limitation (i.e., a cap) or a
minimum numerical limitation (i.e., a floor) may, under certain circumstances,
fail to be treated as a qualified floating rate under the Final Regulations. An
"objective rate" is a rate that is not itself a qualified floating rate but
which is determined using a single formula and which is based upon (i) one
S-12
<PAGE>
or more qualified floating rates, (ii) one or more rates where each rate would
be a qualified floating rate for a debt instrument denominated in a currency
other than the currency in which the Floating Rate Note is denominated (iii)
either the yield or changes in the price of one or more items of actively traded
personal property (other than stock or debt of the issuer or a related party) or
(iv) a combination of such rates. The Final Regulations also provide that other
variable interest rates may be treated as objective rates if so designated by
the IRS in the future. Despite the foregoing, a variable rate of interest on a
Floating Rate Note will not constitute an objective rate if it is reasonably
expected that the average value of such rate during the first half of the
Floating Rate Note's term will be either significantly less than or
significantly greater than the average value of the rate during the final half
of the Floating Rate Note's term. A "qualified inverse floating rate" is any
objective rate where such rate is equal to a fixed rate minus a qualified
floating rate, as long as variations in the rate can reasonably be expected to
inversely reflect contemporaneous variations in the cost of newly borrowed
funds. The Final Regulations also provide that if a Floating Rate Note provides
for stated interest at a fixed rate for an initial period of less than one year
followed by a variable rate that is either a qualified floating rate or an
objective rate and if the variable rate on the Floating Rate Note's issue date
is intended to approximate the fixed rate (e.g., the value of the variable rate
on the issue date does not differ from the value of the fixed rate by more than
25 basis points), then the fixed rate and the variable rate together will
constitute either a single qualified floating rate or objective rate, as the
case may be.
If a Floating Rate Note that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof qualifies as a "variable rate debt instrument" under the Final
Regulations, then any stated interest on such Note which is unconditionally
payable in cash or property (other than debt instruments of the issuer) at least
annually will constitute qualified stated interest and will be taxed
accordingly. Thus, a Floating Rate Note that provides for stated interest at
either a single qualified floating rate or a single objective rate throughout
the term thereof and that qualifies as a "variable rate debt instrument" under
the Final Regulations will generally not be treated as having been issued with
original issue discount unless the Floating Rate Note is issued at a "true"
discount (i.e., at a price below the Note's stated principal amount) in excess
of a specified DE MINIMIS amount. Original issue discount on such a Floating
Rate Note arising from "true" discount is allocated to an accrual period using
the constant yield method described above by assuming that the variable rate is
a fixed rate equal to (i) in the case of a qualified floating rate or qualified
inverse floating rate, the value as of the issue date, of the qualified floating
rate or qualified inverse floating rate, or (ii) in the case of an objective
rate (other than a qualified inverse floating rate), a fixed rate that reflects
the yield that is reasonably expected for the Floating Rate Note.
In general, any other Floating Rate Note that qualifies as a "variable rate
debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of OID and
qualified stated interest on the Floating Rate Note. The Final Regulations
generally require that such a Floating Rate Note be converted into an
"equivalent" fixed rate debt instrument by substituting any qualified floating
rate or qualified inverse floating rate provided for under the terms of the
Floating Rate Note with a fixed rate equal to the value of the qualified
floating rate or qualified inverse floating rate, as the case may be, as of the
Floating Rate Note's issue date. Any objective rate (other than a qualified
inverse floating rate) provided for under the terms of the Floating Rate Note is
converted into a fixed rate that reflects the yield that is reasonably expected
for the Floating Rate Note. In the case of a Floating Rate Note that qualifies
as a "variable rate debt instrument" and provides for stated interest at a fixed
rate in addition to either one or more qualified floating rates or a qualified
inverse floating rate, the fixed rate is initially converted into a qualified
floating rate (or a qualified inverse floating rate, if the Floating Rate Note
provides for a qualified inverse floating rate). Under such circumstances, the
qualified floating rate or qualified inverse floating rate that replaces the
fixed rate must be such that the fair market value of the Floating Rate Note as
of the Floating Rate Note's issue date is approximately the same as the fair
market value of an otherwise identical debt instrument that provides for either
the qualified floating rate or qualified inverse floating rate rather than the
fixed rate. Subsequent to converting the fixed rate into either a qualified
floating rate or a qualified inverse floating rate, the Floating Rate Note is
then converted into an "equivalent" fixed rate debt instrument in the manner
described above.
Once the Floating Rate Note is converted into an "equivalent" fixed rate
debt instrument pursuant to the foregoing rules, the amount of OID and qualified
stated interest, if any, are determined for the "equivalent" fixed rate debt
instrument by applying the general OID rules to the "equivalent" fixed rate debt
instrument and a United States Holder of the Floating Rate Note will account for
tax purposes for such OID and qualified stated interest as if the U.S. Holder
held the "equivalent" fixed rate debt instrument. Each accrual period,
appropriate adjustments will be made to the amount of qualified stated interest
or OID assumed to have been accrued or paid with respect to the "equivalent"
fixed rate debt instrument in the event that such amounts differ from the actual
amount of interest accrued or paid on the Floating Rate Note during the accrual
period.
If a Floating Rate Note does not qualify as a "variable rate debt
instrument" under the Final Regulations, then the Floating Rate Note would be
treated as a contingent payment debt obligation.
S-13
<PAGE>
Certain of the Notes (i) may be redeemable at the option of the Corporation
prior to their stated maturity (a "call option") and/or (ii) may be repayable at
the option of the holder prior to their stated maturity (a "put option"). Notes
containing such features may be subject to rules that differ from the general
rules discussed above. Prospective purchasers of Notes with such features should
consult their tax advisors because the OID consequences will depend, in part, on
the particular terms and features of such Notes.
A United States Holder may elect to include in gross income all interest
that accrues on a Note by using the constant yield method applicable to OID,
subject to certain limitations and exceptions. For purposes of this election,
interest includes stated interest, acquisition discount, OID, DE MINIMIS OID,
market discount, DE MINIMIS market discount and unstated interest, as adjusted
by any amortizable bond premium or acquisition premium.
PROPOSED CONTINGENT DEBT REGULATIONS. On December 15, 1994, the IRS
released proposed regulations (the "Proposed Contingent Debt Regulations")
defining, and describing the taxation of, contingent payment debt obligations.
The Proposed Contingent Debt Regulations also modify the definition of
"objective rate" for purposes of the Final Regulations. Under the Proposed
Contingent Debt Regulations, for debt instruments issued 60 days after final
regulations are published, an objective rate is defined as a rate that is
determined using a single fixed formula and that is based on objective financial
or economic information. An objective rate does not include a rate based on
information that is within the control of the issuer (or a related party) or
that is unique to the circumstances of the issuer.
The proposed regulations will not be effective until 60 days after final
regulations are published in the Federal Register. Any final regulations may
differ substantially from the Proposed Contingent Debt Regulations. Each
potential purchaser of the Notes should consult its own tax advisor regarding
the Proposed Contingent Debt Regulations.
SHORT-TERM NOTES. Certain United States Holders (including banks,
securities dealers, regulated investment companies and taxpayers that elect
under Code Section 1282(b)(2) and that otherwise use the cash method of tax
accounting, as well as all accrual method United States Holders) will be
required to accrue into income on a current basis qualified stated interest and
any OID with respect to Notes having a maturity of not more than one year
("Short-Term Notes"). (In that regard it should be noted that the Final
Regulations treat none of the stated interest on a Short-Term Note as qualified
stated interest, but instead treat such interest as part of the Short-Term
Note's stated redemption price at maturity, thereby giving rise to OID.) OID on
a Short-Term Note will be treated as accruing on a ratable basis or, at the
election of the holder, on a constant interest basis. Other cash method holders
of Short-Term Notes generally will not be required, but may elect under Section
1282(b)(2) of the Code, to accrue qualified stated interest and OID into income
on a current basis. However, unless such holder so elects, such holder may not
be allowed to deduct all of the interest paid or accrued on any indebtedness
incurred or maintained to purchase or carry such Short-Term Note until the
maturity date of the Note or its earlier disposition in a taxable transaction.
In addition, such a non-electing cash method holder will be required to treat
any gain realized on a sale, exchange or retirement of the Short-Term Note as
ordinary income to the extent such gain does not exceed the OID accrued with
respect to the Note during the period the holder held the Short-Term Note. In
determining OID for such purposes, OID will be deemed to accrue on a ratable
basis unless the holder elects accrual on a constant interest basis.
A United States Holder of a Short-Term Note can elect to apply the rules in
the preceding paragraph dealing with the current accrual of OID and the deferral
of interest deductions by taking into account the amount of "acquisition
discount," if any, with respect to the Note (rather than the amount of OID, if
any, with respect to such Short-Term Note). Acquisition discount is the excess
of the remaining stated redemption price at maturity of the Short-Term Note over
the holder's tax basis in the Short-Term Note at the time of the acquisition.
Acquisition discount will be treated as accruing on a ratable basis or, at the
election of the holder, on a constant interest basis.
A United States Holder's tax basis for a Short-Term Note generally will be
the holder's purchase price for the Note, increased by any stated interest, OID
or acquisition discount that the holder is required to accrue, or has elected to
accrue, into income currently under the rules described above and decreased by
the amount of any bond premium previously amortized by such holder with respect
to such Note, the amount of any payment of principal received by such holder
with respect to the Note, and, if the holder is required to accrue, or has
elected to accrue, interest into income currently with respect to the Note, the
amount of any payment of stated interest received by such holder with respect to
the Note.
The market discount rules will not apply to a Short-Term Note.
Certain of the Notes may be redeemable prior to their maturity date, at the
option of either the Corporation or the holder. This redemption feature may
affect the determination of whether a Note has a maturity of not more than one
year and is thus
S-14
<PAGE>
a Short-Term Note. Purchasers of Notes with such features should carefully
examine the applicable Pricing Supplement and should consult their own tax
advisors with respect to such features.
NON-UNITED STATES HOLDERS
Except as otherwise discussed in the applicable Pricing Supplement, under
the United States Federal income tax laws as in effect on the date of this
Prospectus Supplement and subject to the discussion of backup withholding below,
payments of principal and any premium and interest, including any OID, by the
Corporation or its agent (acting in its capacity as such) to any holder of a
Note who is not a United States person (a "Non-United States Holder") will be
not subject to United States Federal withholding tax; PROVIDED, HOWEVER, that,
in the case of interest, including any OID, (i) such holder does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the entitled to vote, (ii) such holder is not a controlled foreign
corporation for United States tax purposes that is related to the (directly or
indirectly) through stock ownership, and (iii) either (A) the beneficial owner
of the Note certifies to the Corporation or its agent, under penalties of
perjury, that it is a Non-United States Holder and provides its name and
address, or (B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its trade
business (a "financial institution") and holds the Note and certifies to the
Corporation or its agent under penalties of perjury that such statement has been
received from the beneficial owner by it or by a financial institution and
furnishes the payor with a copy thereof. In the event a Floating Rate Note is
issued which bears interest at a rate other than a rate determined by reference
to a Base Rate explicitly referred to under "Floating Rate Notes," the
applicable Pricing Supplement will describe whether interest (including original
issue discount) on such Note will be subject to Federal withholding tax.
If a Non-United States Holder is engaged in a trade or business in the
United States and interest, including any OID, on the Note is effectively
connected with the conduct of such trade or business, such holder, although
exempt from the withholding tax discussed in the preceding paragraph (upon
delivery of a properly executed Form 4224), may be subject to United States
Federal income tax on such interest, and any OID, in the same manner as if it
were a United States person. In addition, if such a holder is a foreign
corporation, it may be subject to a branch profits tax equal to 30% of its
effectively connected earnings and profits for the taxable year, subject to
certain adjustments. In lieu of the certification described in the preceding
paragraph, a Non-United States Holder with effectively connected interest income
must provide the payor with a properly executed Internal Revenue Service Form
4224 to claim an exemption from United States Federal withholding tax.
Any capital gain or market discount realized upon retirement or disposition
of a Note by a Non-United States Holder will not be subject to United States
Federal income or withholding taxes if (i) such gain is not effectively
connected with a United States trade or business of the holder, and (ii) in the
case of an individual, such holder is not present in the United States for 183
days or more in the taxable year of the retirement or disposition.
Notes held by an individual who is neither a citizen nor a resident of the
United States for United States Federal income tax purposes at the time of such
individual's death will not be subject to United States Federal estate tax
provided that the income from such Notes was not or would not have been
effectively connected with a United States trade or business of such individual
and that such individual qualified for the exemption from United States Federal
withholding tax (without regard to the certification requirements) that is
described above.
BACKUP WITHHOLDING AND INFORMATION REPORTING
For each calendar year in which the Notes are outstanding, the Corporation
is required to provide the Internal Revenue Service with certain information,
including each holder's name, address and taxpayer identification number (either
the holder's Social Security number or its employer identification number, as
the case may be), the aggregate amount of principal and any premium and
qualified stated interest paid to the holder during the calendar year, the
amount of original issue discount (if any) accruing on the obligation during the
calendar year, and the amount of tax withheld, if any. This obligation, however,
does not apply with respect to certain United States Holders, including
corporations, tax-exempt organizations, qualified pension and profit sharing
trusts and individual retirement accounts.
In the event that a United States Holder subject to the reporting
requirements described above fails to supply its correct taxpayer identification
number in the manner required or underreports its tax liability with respect to
interest or dividends, the Corporation, its agent or its paying agent may be
required to "backup" withhold a tax equal to 31% of each payment of interest
(including original issue discount, if any) and principal and any premium on the
Notes. This tax is not an additional tax and may be credited against the United
States Holder's United States Federal income tax liability, provided that the
required information is furnished to the IRS.
S-15
<PAGE>
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by the Corporation or any agent
thereof (in its capacity as such) to a Non-United States Holder of a Note with
respect to which the holder has provided required certification that it is not a
United States person as set forth in clause (iii) in the first paragraph under
"Non-United States Holders," or has otherwise established an exemption (provided
that neither the nor such agent has actual knowledge that the holder is a United
States person or that the conditions of any exemption are not in fact
satisfied).
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50% or
more of whose gross income from all sources for the three-year period ending
with the close of its taxable year preceding the payment was effectively
connected with a United States trade or business, information reporting may
apply to such payments. Payment of the proceeds from a sale of a Note to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner certifies as to its
non-United States status or otherwise establishes an exemption from information
reporting and backup withholding.
For purposes of the preceding discussion, the term "United States person"
means a citizen or resident of the United States, a corporation, partnership or
other entity created or organized under the laws of the United States or an
estate or trust the income of which is subject to United States Federal income
taxation regardless of its source, and "United States" means the United States
of America (including the States and the District of Columbia).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE
TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis for sale by the
Corporation. Unless otherwise agreed with the Corporation, an Agent will
purchase a specified amount of the Notes, as principal, from the Corporation,
for resale to investors and other purchasers at varying prices relating to
prevailing market prices at the time of resale as determined by the Agent or, if
so specified in an applicable Pricing Supplement, for resale at a fixed public
offering price. Unless otherwise specified in an applicable Pricing Supplement,
any Note sold to an Agent as principal will be purchased by such Agent at a
price equal to 100% of the principal amount thereof less a percentage of the
principal amount equal to the commission applicable to an agency sale (as
described below) of a Note of identical maturity. If agreed to by the
Corporation and an Agent, such Agent may utilize its reasonable efforts on an
agency basis to solicit offers to purchase the Notes at 100% of the principal
amount thereof, unless otherwise specified in an applicable Pricing Supplement.
For each Note sold through an Agent as agent, the Corporation will pay a
commission in the form of a discount to such Agent, ranging from .125% to .750%
of the principal amount of the Note, depending upon its stated maturity. The
Corporation may also sell Notes directly to investors and other purchasers on
its own behalf in those jurisdictions where it is authorized to do so, and, upon
such sale, no Agent will be entitled to any commission as set forth herein.
An Agent may sell Notes it has purchased from the Corporation as principal
to other dealers for resale to investors, and may allow any portion of the
discount received in connection with such purchases from the Corporation to such
dealers. After the initial public offering of Notes to be resold to investors
and other purchasers, the public offering price (in the case of Notes to be
resold on a fixed public offering price basis), the concession and the discount
may be changed.
The Corporation reserves the right to withdraw, cancel or modify the offer
made hereby without notice and may reject orders in whole or in part whether
placed directly with the Corporation or through one of the Agents. Each Agent
will have the right, in its discretion reasonably exercised, to reject any offer
to purchase Notes received by it on an agency basis, in whole or in part.
Unless otherwise provided in a Pricing Supplement, payment of the purchase
price of the Notes will be required to be made in immediately available funds on
the date of settlement.
S-16
<PAGE>
No Note will have an established trading market when issued. The Notes will
not be listed on any securities exchange. The Agents may from time to time
purchase and sell Notes in the secondary market, but are not obligated to do so,
and there can be no assurance that there will be a secondary market for the
Notes or liquidity in the secondary market if one develops. From time to time,
the Agents may make a market in the Notes, but no Agent is obligated to do so,
and may discontinue any market-making activity at any time.
The Agents, whether acting as agent or principal, may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). The Corporation has agreed to indemnify the Agents against
and to contribute to payments that the Agents may be required to make relating
to certain liabilities, including liabilities under the Securities Act. The
Corporation has also agreed to reimburse the Agents for certain expenses.
NationsBanc Capital Markets, Inc. ("NCMI") is an indirect, wholly owned
subsidiary of NationsBank. Under Schedule E to the By-Laws ("Schedule E") of the
National Association of Securities Dealers, Inc. (the "NASD"), when an NASD
member, such as NCMI, participates in the distribution of an affiliated
company's securities, the offering must be conducted in accordance with the
applicable provisions of Schedule E. NationsBank is considered to be an
"affiliate" (as such term is defined in Schedule E) of NCMI. The offer and sale
of any Notes by NCMI will comply with the requirements of Schedule E regarding
the underwriting of securities of affiliates and with any restrictions as may be
imposed on NCMI by the Board of Governors of the Federal Reserve System. In
addition, under Schedule E, no NASD member participating in offers and sales of
the Notes may execute a transaction in the Notes in a discretionary account
without the specific prior written approval of the member's customer.
This Prospectus Supplement and related Prospectus also may be used by
direct or indirect wholly owned subsidiaries of NationsBank acting in an agency
capacity in connection with offers and sales related to secondary market
transactions in the Notes. Any such sales will be made at prices related to
prevailing market prices at the time of sale.
The Agents may from time to time engage in transactions with, or perform
services for, the Corporation in the ordinary course of business.
The Corporation may, in its sole discretion, suspend solicitations of
purchases of the Notes through the Agents, acting as agent, for any period of
time or permanently.
S-17
<PAGE>
PROSPECTUS
NationsBank(Register Mark)
DEBT SECURITIES
NationsBank Corporation ("NationsBank" or the "Corporation") may offer from
time to time in one or more series up to
$4,000,000,000 in aggregate initial offering price of (i) its unsecured debt
securities, which may be either senior (the "Senior Debt Securities") or
subordinated (the "Subordinated Debt Securities" and, together with the Senior
Debt Securities, the "Debt Securities"), (ii) shares of its preferred stock (the
"Preferred Stock"), which may be represented by depositary shares (the
"Depositary Shares"), and (iii) shares of its common stock (the "Common Stock").
This Prospectus relates solely to the offer and sale of Debt Securities, which
may be offered, separately or together, in separate series in amounts, at prices
and on terms to be determined at the time of sale and set forth in an
accompanying supplement to this Prospectus (a "Prospectus Supplement"). Any
shares of Preferred Stock, Depositary Shares or Common Stock that may be offered
and issued under the Registration Statement of which this Prospectus forms a
part will be so offered and issued pursuant to the terms of a separate
Prospectus contained in such Registration Statement. The aggregate amount of
Debt Securities that may be offered and sold pursuant hereto is subject to
reduction as the result of the sale of any Preferred Stock, Depositary Shares or
Common Stock pursuant to such separate Prospectus.
The Senior Debt Securities will rank equally with all other unsubordinated
and unsecured indebtedness of the Corporation. The Subordinated Debt Securities
will be subordinate in right of payment to all existing and future Senior
Indebtedness (as defined herein) of the Corporation.
The applicable Prospectus Supplement will set forth the specific terms of
each series of Debt Securities offered pursuant to this Prospectus, including
the specific designation, aggregate principal amount, authorized denominations,
maturity, any premium, any interest rate (which may be fixed or variable), any
interest payment dates, any optional or mandatory redemption terms, any sinking
fund provisions, any subordination terms, any terms for conversion into other
series of Debt Securities, Preferred Stock, Depositary Shares or Common Stock,
the initial public offering price and any other terms of such series of Debt
Securities.
The Debt Securities may be sold (i) through underwriting syndicates
represented by managing underwriters, or by underwriters without a syndicate,
with such underwriters to be designated at the time of sale; (ii) through agents
designated from time to time; or (iii) directly by the Corporation. The names of
any underwriters or agents of NationsBank involved in the sale of the Debt
Securities, the public offering price or purchase price and any applicable
commissions or discounts will be set forth in the applicable Prospectus
Supplement, in addition to any other terms of the offering of such Debt
Securities. The net proceeds to the Corporation from such sale also will be set
forth in such Prospectus Supplement.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS, ARE NOT OBLIGATIONS
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF THE CORPORATION, AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC") OR ANY
OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH
CAROLINA (THE "COMMISSIONER") OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION, THE COMMISSIONER OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is August 12, 1993.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Corporation with the
Securities and Exchange Commission (the "Commission") pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), are
incorporated herein by reference:
(a) The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1992;
(b) The Corporation's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993; and
(c) The Corporation's Current Reports on Form 8-K filed January 13,
1993, January 25, 1993, February 24, 1993 (as amended by Amendment No. 1 on
Form 8 filed March 1, 1993, Form 8-K/A Amendment No. 1 filed May 6, 1993
and Form 8-K/A Amendment No. 2 filed May 27, 1993), March 26, 1993, July 7,
1993, August 2, 1993 and August 11, 1993 (including a description of the
Common Stock).
All reports and any definitive proxy or information statements filed
by the Corporation with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the 1934 Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Debt Securities offered
hereby shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM
THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY
REFERENCE (OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY
INCORPORATED BY REFERENCE IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH
COPIES SHOULD BE DIRECTED TO JOHN E. MACK, SENIOR VICE PRESIDENT AND
TREASURER, NATIONSBANK CORPORATION, NATIONS BANK CORPORATE CENTER,
CORPORATE TREASURY DIVISION, CHARLOTTE, NORTH CAROLINA 28255. TELEPHONE
REQUESTS MAY BE DIRECTED TO MR. MACK AT (704) 386-5833.
AVAILABLE INFORMATION
NationsBank is subject to the informational requirements of the 1934
Act and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the following public reference
facilities maintained by the Commission: 450 Fifth Street, N.W.,
Washington, D.C. 20549; 7 World Trade Center, 13th Floor, New York, New
York 10048; and the Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material may also
be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, upon payment of
prescribed rates. In addition, reports, proxy statements and other
information concerning NationsBank may be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005
and at the offices of The Pacific Stock Exchange, Incorporated, 301 Pine
Street, San Francisco, California 94104.
2
<PAGE>
NATIONSBANK CORPORATION
GENERAL
NationsBank is a bank holding company registered under the Bank
Holding Company Act of 1956, as amended, with its principal assets being
the stock of its banking subsidiaries (the "Banks"). Through the Banks and
its various non-banking subsidiaries, NationsBank provides domestic banking
and banking-related services throughout the Southeastern and MidAtlantic
states and Texas. The principal executive offices of NationsBank are
located at NationsBank Corporate Center, Charlotte, North Carolina 28255.
Its telephone number is (704) 386-5000.
As part of its operations, the Corporation routinely analyzes its
lines of business and from time to time may increase, decrease or terminate
any of its activities as the result of such evaluations. In particular, the
Corporation regularly evaluates the potential acquisition of, and holds
discussions with, various financial institutions and other businesses of a
type eligible for bank holding company investment. The Corporation also
regularly analyzes the values of, and submits bids for, the acquisitions of
customer-based funds and other liabilities and assets of failed financial
institutions. As a general rule, the Corporation publicly announces such
material acquisitions when a definitive agreement has been reached.
BANKING OPERATIONS
NationsBank, through its various subsidiaries, provides a diversified
range of financial services to its customers. These services include
activities related to the general banking business as provided through the
General Bank Group (including comprehensive service in the commercial and
retail banking fields, the origination and servicing of home mortgage
loans, the issuance and servicing of credit cards, certain insurance
services and private banking services); the Institutional Bank Group
(including comprehensive service in the corporate and investment banking
fields, trading in financial futures through contractual arrangements with
members of the various commodities exchanges, options market making and
trading and arranging and structuring mergers, acquisitions, leveraged
buyouts, private debt placements, international financings and venture
capital; and international operations through representative offices,
branches or merchant banks located in London, Frankfurt, Singapore, Mexico
City, Grand Cayman and Nassau, including the traditional services of paying
and receiving, international collections, bankers acceptances, letters of
credit and foreign exchange services, as well as specialized international
services, such as tax-based leasing, export financing of certain capital
goods and raw materials and capital market services, for its corporate
customers); the Secured Lending Group (including real estate lending,
commercial finance and factoring, and leasing and financing a wide variety
of commercial equipment); and the Trust Group (including trust and
investment management services and mutual funds products).
NationsBank has banking operations in the following jurisdictions
(listed in declining order of total assets, with the approximate number of
banking offices in parentheses): Texas (271), North Carolina (239), Florida
(370), Georgia (205), Virginia (258), South Carolina (189), Tennessee
(104), Maryland (83), District of Columbia (11) and Kentucky (4). The
Company also has a banking subsidiary in Delaware that issues and services
credit cards.
In addition to the banking offices located in the above states, the
various Banks have loan production offices located in New York City,
Chicago, Los Angeles, Denver and Birmingham. The Banks also provide fully
automated, 24-hour cash dispensing and depositing and payment services
throughout the states in which they are located, through approximately
1,700 automated teller machines.
NON-BANKING OPERATIONS
NationsBank conducts its non-banking operations through several
subsidiaries. NationsCredit Corporation and several other subsidiaries
engage in consumer credit activities. NationsBanc Mortgage Corporation
originates and services loans for the Banks and for other investors.
NationsBanc Commercial Corporation and an additional subsidiary provide
services related to the factoring of accounts receivable. NationsBanc
Leasing Corporation and several additional subsidiaries engage in equipment
and leveraged leasing activities. NationsSecurities, A Dean
Witter/NationsBank Company, provides full service retail brokerage
services. NationsBanc Securities, Inc. conducts discount brokerage
activities.
In addition, NationsBanc Capital Markets, Inc. ("NCMI"), NationsBank's
institutional securities subsidiary, underwrites and deals in bank-eligible
securities (generally U.S. government and government agency securities,
certain municipal securities, primarily municipal general obligation
securities, and certain certificates of deposit, bankers acceptances and
money market instruments) and, to a limited extent, certain bank-ineligible
securities, including corporate debt, as authorized by the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") under
3
<PAGE>
Section 20 of the Glass-Steagall Act. Through NCMI's securities
underwriting authority, NationsBank provides corporate and institutional
customers a broad range of debt-related financial services.
SUPERVISION AND REGULATION
GENERAL
NationsBank is subject to the supervision of, and to regular
inspection by, the Federal Reserve Board. The Banks are organized as
national banking associations, which are subject to regulation, supervision
and examination by the Office of the Comptroller of the Currency (the
"Comptroller") and the FDIC. In addition to banking laws, regulations and
regulatory agencies, NationsBank and its subsidiaries and affiliates are
subject to various other laws and regulations and supervision and
examination by other regulatory agencies, all of which directly or
indirectly affect NationsBank's operations, management and ability to make
distributions.
The following discussion summarizes certain aspects of those laws and
regulations that affect NationsBank. Proposals to change the laws and
regulations governing the banking industry are frequently introduced in
Congress, in the state legislatures and before the various bank regulatory
agencies. For example, Federal interstate branching legislation may be
proposed in the future which, if enacted, would permit nationwide
interstate branching by NationsBank. In addition, North Carolina recently
revised its banking statutes, effective in 1996, to facilitate interstate
banking in other states that have similar statutes regarding interstate
banking. Other states in which NationsBank has banking operations are
considering similar legislation. However, the likelihood and timing of any
such changes and the impact such changes might have on NationsBank and its
subsidiaries are difficult to determine.
CAPITAL AND OPERATIONAL REQUIREMENTS
The Federal Reserve Board, the Comptroller and the FDIC have issued
substantially similar risk-based and leverage capital guidelines applicable
to United States banking organizations. In addition, those regulatory
agencies may from time to time require that a banking organization maintain
capital above the minimum levels, whether because of its financial
condition or actual or anticipated growth.
The Federal Reserve Board risk-based guidelines define a two-tier
capital framework. Tier 1 capital consists of common and qualifying
preferred shareholders' equity, less certain intangibles and other
adjustments. Tier 2 capital consists of subordinated and other qualifying
debt, and the allowance for credit losses up to 1.25 percent of risk-
weighted assets. The sum of Tier 1 and Tier 2 capital less investments in
unconsolidated subsidiaries represents qualifying total capital, at least
50 percent of which must consist of Tier 1 capital. Risk-based capital
ratios are calculated by dividing Tier 1 and total capital by risk-weighted
assets. Assets and off-balance sheet exposures are assigned to one of four
categories of risk-weights, based primarily on relative credit risk. The
minimum Tier 1 capital ratio is 4 percent and the minimum total capital
ratio is 8 percent. The Corporation's Tier 1 and total risk-based capital
ratios under these guidelines at June 30, 1993 were 7.63 percent and 11.75
percent, respectively.
The leverage ratio is determined by dividing Tier 1 capital by
adjusted total assets. Although the stated minimum ratio is 3 percent, most
banking organizations are required to maintain ratios of at least 100 to
200 basis points above 3 percent. The Corporation's leverage ratio at June
30, 1993 was 6.34 percent. Management believes that the Corporation meets
its leverage ratio requirement.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies five capital categories for
insured depository institutions (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) and requires the respective Federal regulatory agencies
to implement systems for "prompt corrective action" for insured depository
institutions that do not meet minimum capital requirements within such
categories. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions, depending on the category
in which an institution is classified. Failure to meet the capital
guidelines could also subject a banking institution to capital raising
requirements. An "undercapitalized" bank must develop a capital restoration
plan and its parent holding company must guarantee that bank's compliance
with the plan. The liability of the parent holding company under any such
guarantee is limited to the lesser of 5 percent of the bank's assets at the
time it became "undercapitalized" or the amount needed to comply with the
plan. Furthermore, in the event of the bankruptcy of the parent holding
company, such guarantee would take priority over the parent's general
unsecured creditors. In addition, FDICIA requires the various regulatory
agencies to prescribe within two years from the
4
<PAGE>
date of enactment of FDICIA certain non-capital standards for safety and
soundness relating generally to operations and management, asset quality
and executive compensation and permits regulatory action against a
financial institution that does not meet such standards.
The various regulatory agencies have adopted substantially similar
regulations that define the five capital categories identified by FDICIA,
using the total risk-based capital, Tier 1 risk-based capital and leverage
capital ratios as the relevant capital measures. Such regulations establish
various degrees of corrective action to be taken when an institution is
considered undercapitalized. Under the regulations, a "well capitalized"
institution must have a Tier 1 capital ratio of at least 6 percent, a total
capital ratio of at least 10 percent and a leverage ratio of at least 5
percent and not be subject to a capital directive order. An "adequately
capitalized" institution must have a Tier 1 capital ratio of at least 4
percent, a total capital ratio of at least 8 percent and a leverage ratio
of at least 4 percent, or 3 percent in some cases. Under these guidelines,
each of the Banks is considered adequately or well capitalized.
DISTRIBUTIONS
NationsBank's funds for cash distributions to its shareholders are
derived from a variety of sources, including cash and temporary
investments. The primary source of such funds, however, is dividends
received from its banking subsidiaries. The amount of dividends that each
Bank may declare in a calendar year without approval of the Comptroller is
the Bank's net profits for that year, as defined by statute, combined with
its net retained profits, as defined, for the preceding two years. The
Banks can initiate dividend payments in 1993 without prior regulatory
approval of up to $386 million plus an additional amount equal to their net
profits for 1993 up to the date of any such dividend declaration.
In addition to the foregoing, the ability of NationsBank and its
national bank subsidiaries to pay dividends may be affected by the various
minimum capital requirements and the capital and non-capital standards to
be established under FDICIA as described above. Furthermore, the
Comptroller may prohibit the payment of a dividend by a national bank if it
determines that such payment would constitute an unsafe or unsound
practice. The right of NationsBank, its shareholders and its creditors to
participate in any distribution of the assets or earnings of its
subsidiaries is further subject to the prior claims of creditors of the
respective subsidiaries.
DEPOSIT INSURANCE
The deposits of each of the Banks are insured up to applicable limits
by the FDIC. Accordingly, the Banks are subject to deposit insurance
assessments to maintain the Bank Insurance Fund of the FDIC. As mandated by
FDICIA, the FDIC adopted regulations effective January 1, 1993 for the
transition from a flat-rate insurance assessment system to a risk-based
system by January 1, 1994. Pursuant to these regulations, a financial
institution's deposit insurance assessment will be within a range of 0.23
percent to 0.31 percent of its qualifying deposits, depending on the
institution's risk classification. The assessment for the Banks is
estimated to average 26 cents per $100 of eligible deposits in 1993,
resulting in an increase of approximately $13 million in FDIC insurance
premiums compared to 1992.
SOURCE OF STRENGTH
According to Federal Reserve Board policy, bank holding companies are
expected to act as a source of financial strength to each subsidiary bank
and to commit resources to support each such subsidiary. This support may
be required at times when a bank holding company may not be able to provide
such support. In the event of a loss suffered or anticipated by the
FDIC -- either as a result of default of a banking or thrift subsidiary of
the Corporation or related to FDIC assistance provided to a subsidiary in
danger of default -- the other banking subsidiaries of NationsBank may be
assessed for the FDIC's loss, subject to certain exceptions.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities will be used for
general corporate purposes, including NationsBank's working capital needs,
the funding of investments in, or extensions of credit to, Nations Bank's
banking and nonbanking subsidiaries, possible acquisitions of other
financial institutions or their assets, possible acquisitions of failed
financial institutions offered for sale by regulatory authorities, possible
acquisitions of or investments in other businesses of a type eligible for
bank holding companies and possible reduction of outstanding indebtedness
or repurchase of outstanding equity securities of the Corporation. Pending
such use, the Corporation may temporarily invest the net proceeds in
investment grade securities. The Corporation may, from time to time, engage
in additional capital financings of a character and in amounts to be
determined by the Corporation in light of its needs at such time or times
5
<PAGE>
and in light of prevailing market conditions. If the Corporation elects at
the time of issuance of Debt Securities to make different or more specific
use of proceeds other than that set forth herein, such use will be
described in the applicable Prospectus Supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges
for the three months ended March 31, 1993 and for each of the years in the
five-year period ended December 31, 1992:
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED
ENDED MARCH 31, DECEMBER 31,
1993 1992 1991 (1) 1990 1989 (2)
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits............................. 2.6 2.4 1.1 1.3 1.7
Including interest on deposits............................. 1.5 1.4 1.0 1.1 1.2
<CAPTION>
1988
<S> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits............................. 1.8
Including interest on deposits............................. 1.2
</TABLE>
(1) Ratios include the 1991 restructuring expense of $330 million recorded
in connection with the merger of a subsidiary of the Corporation into
C&S/Sovran Corporation, effective December 31, 1991. On a pro forma
basis, excluding the 1991 restructuring expense of $330 million, the
Ratio of Earnings to Fixed Charges excluding interest on deposits was
1.3, and the Ratio of Earnings to Fixed Charges including interest on
deposits was 1.1. For additional information regarding the
restructuring expense, see the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992, incorporated by reference
herein.
(2) Includes the FDIC's interest in the earnings of NationsBank of Texas,
National Association.
For purposes of computing the consolidated ratios, earnings represent
net income of the Corporation plus applicable income taxes and fixed
charges, less capitalized interest and the equity in undistributed earnings
of unconsolidated subsidiaries and associated companies. Fixed charges
represent interest expense (exclusive of interest on deposits in one case
and inclusive of such interest in the other), capitalized interest,
amortization of debt discount and appropriate issuance costs and one-third
(the amount deemed to represent an appropriate interest factor) of net rent
expense under all lease commitments.
PLAN OF DISTRIBUTION
The Corporation may offer and sell the Debt Securities in one or more
of the following ways: (i) through underwriters or dealers; (ii) through
agents; or (iii) directly by the Corporation to one or more purchasers.
Such underwriters, dealers or agents may be affiliates of NationsBank. The
Prospectus Supplement with respect to a particular offering of a series of
Debt Securities will set forth the terms of the offering of such Debt
Securities, including the name or names of any underwriters or agents with
whom NationsBank has entered into arrangements with respect to the sale of
such Debt Securities, the public offering or purchase price of such Debt
Securities and the proceeds to the Corporation from such sales, and any
underwriting discounts, agency fees or commissions and other items
constituting underwriters' compensation, the initial public offering price,
any discounts or concessions to be allowed or reallowed or paid to dealers
and any securities exchange, if any, on which such Debt Securities may be
listed.
If underwriters are used in the offer and sale of Debt Securities, the
Debt Securities will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying
prices determined at the time of sale. The Debt Securities may be offered
to the public either through underwriting syndicates represented by
managing underwriters, or by underwriters without a syndicate, all of which
underwriters in either case will be designated in the applicable Prospectus
Supplement. Unless otherwise set forth in the applicable Prospectus
Supplement, under the terms of the underwriting agreement, the obligations
of the underwriters to purchase Debt Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all
the Debt Securities if any are purchased. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
Debt Securities may be offered and sold directly by the Corporation or
through agents designated by the Corporation from time to time. Any agent
involved in the offer or sale of the Debt Securities with respect to which
this Prospectus is delivered will be named in, and any commissions payable
by the Corporation to such agent will be set forth in or
6
<PAGE>
calculable from, the applicable Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a
best-efforts basis for the period of its appointment.
If so indicated in the applicable Prospectus Supplement, the
Corporation may authorize underwriters, dealers or agents to solicit offers
by certain institutions to purchase Debt Securities from the Corporation at
the public offering price set forth in such Prospectus Supplement pursuant
to delayed delivery contracts ("Delayed Delivery Contracts") providing for
payment and delivery on the date or dates stated in the Prospectus
Supplement. Each Delayed Delivery Contract will be for an amount of Debt
Securities not less than and, unless the Corporation otherwise agrees, the
aggregate amount of Debt Securities sold pursuant to Delayed Delivery
Contracts shall be not more than the respective amounts stated in the
Prospectus Supplement. Institutions with which Delayed Delivery Contracts,
when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies and educational
and charitable institutions, but shall in all cases be subject to the
approval of the Corporation in its sole discretion. The obligations of the
purchaser under any Delayed Delivery Contract to pay for and take delivery
of Debt Securities will not be subject to any conditions except that (i)
the purchase of Debt Securities by such institution shall not at the time
of delivery be prohibited under the laws of the jurisdiction to which such
institution is subject; and (ii) any related sale of Debt Securities to
underwriters shall have occurred. A commission set forth in the Prospectus
Supplement will be paid to underwriters soliciting purchases of Debt
Securities pursuant to Delayed Delivery Contracts accepted by the
Corporation. The underwriters will not have any responsibility in respect
of the validity or performance of Delayed Delivery Contracts.
The Debt Securities will be new issues of securities with no
established trading market. Any underwriters to whom Debt Securities are
sold by the Corporation for public offering and sale may make a market in
such Debt Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any
Debt Securities.
Any underwriter, dealer or agent participating in the distribution of
the Debt Securities may be deemed to be an underwriter, as that term is
defined in the Securities Act of 1933, as amended (the "1933 Act"), of the
Debt Securities so offered and sold, and any discounts or commissions
received by them from NationsBank and any profit realized by them on the
sale or resale of the Debt Securities may be deemed to be underwriting
discounts and commissions under the 1933 Act.
Under agreements entered into with the Corporation, underwriters,
dealers and agents may be entitled to indemnification by the Corporation
against certain civil liabilities, including liabilities under the 1933
Act, or to contribution with respect to payments which the underwriters or
agents may be required to make in respect thereof.
The participation of an affiliate or subsidiary of NationsBank in the
offer and sale of the Debt Securities will comply with the requirements of
Schedule E to the By-laws of the National Association of Securities
Dealers, Inc. (the "NASD") regarding the participation in a distribution of
securities by an affiliate. No NASD member participating in offers and
sales of the Debt Securities will execute a transaction in the Debt
Securities in a discretionary account without the prior written specific
approval of the member's customer.
This Prospectus and related Prospectus Supplements also may be used by
direct or indirect wholly owned subsidiaries of NationsBank in connection
with offers and sales related to secondary market transactions in the Debt
Securities. Such subsidiaries may act as principal or agent in such
transactions. Any such sales will be made at prices related to prevailing
market prices at the time of sale.
Underwriters, dealers and agents also may be customers of, engage in
transactions with, or perform other services for the Corporation in the
ordinary course of business.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets
forth certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The particular terms of the Debt
Securities offered by any Prospectus Supplement and the extent, if any, to
which such general provisions may apply to the Debt Securities so offered
will be described in the Prospectus Supplement relating to such Debt
Securities.
The Senior Debt Securities are to be issued under an Indenture dated
as of January 1, 1992 between the Corporation and BankAmerica National
Trust Company (formerly BankAmerica Trust Company of New York), Trustee
(the "Senior
7
<PAGE>
Trustee"), as supplemented by the First Supplemental Indenture thereto
dated as of July 1, 1993 between the Corporation and the Senior Trustee
(such indenture, as so supplemented, is referred to herein as the "Senior
Indenture"). The Subordinated Debt Securities are to be issued under an
Indenture dated as of November 1, 1992 between the Corporation and The Bank
of New York, Trustee (the "Subordinated Trustee" and, together with the
Senior Trustee, the "Trustees"), as supplemented by the First Supplemental
Indenture thereto dated as of July 1, 1993 between the Corporation and the
Subordinated Trustee (such indenture, as so supplemented, is referred to
herein as the "Subordinated Indenture"). A copy of each of the Senior
Indenture and the Subordinated Indenture (each, an "Indenture" and
together, the "Indentures") is incorporated by reference in the
Registration Statement of which this Prospectus forms a part. The following
summaries of certain provisions of the Indentures do not purport to be
complete and are subject to and qualified in their entirety by reference to
the provisions of the applicable Indentures. Whenever particular sections
or defined terms of the Indentures are referred to, it is intended that
such sections or defined items shall be incorporated herein by reference.
Unless otherwise indicated, capitalized terms shall have the meanings
ascribed to them in the Indentures.
GENERAL
The respective Indentures provide that there is no limitation on the
amount of debt securities that may be issued thereunder from time to time.
The amount of Debt Securities that may be offered and sold pursuant to this
Prospectus, however, is limited to the aggregate initial offering price of
the securities registered under the Registration Statement of which this
Prospectus forms a part, subject to reduction as the result of the sale of
other securities under the Registration Statement.
The Senior Debt Securities of each series will be unsecured and will
rank equally with all unsecured senior debt of the Corporation. The
Subordinated Debt Securities of each series will be unsecured and will be
subordinate and junior in right of payment to the prior payment in full of
the Senior Indebtedness of the Corporation. See "Description of Debt
Securities -- Subordination."
The Debt Securities will be issued in fully registered form only.
Principal of and premium, if any, and interest on the Debt Securities will
be payable, and the Debt Securities may be transferable or exchangeable,
without payment of any service charge other than any tax or governmental
charge payable in connection therewith, at the principal corporate trust
office of the respective Trustees, or at such other places as may be
designated from time to time pursuant to the Indentures. The Debt
Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. Federal income tax consequences and
special considerations applicable to any such Debt Securities will be
described in the Prospectus Supplement relating thereto.
The Debt Securities may be issued from time to time in one or more
series. The particular terms of each series of Debt Securities to be
offered and sold will be described in the Prospectus Supplement with
respect to such Debt Securities, including: (1) the specific title of the
series of Debt Securities; (2) whether such Debt Securities are Senior Debt
Securities or Subordinated Debt Securities; (3) the aggregate principal
amount of such series of Debt Securities; (4) the denominations in which
such series of Debt Securities are authorized to be issued, if other than
denominations of $1,000 or any integral multiple thereof; (5) any sinking
fund provisions; (6) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which such series of Debt Securities
will be issued; (7) the date or dates on which such series of Debt
Securities will mature; (8) the rate or rates per annum or the method for
determining such rate or rates, if any, at which such series of Debt
Securities will bear interest (which rate may be fixed or variable), and
the date or dates from which any such interest will accrue; (9) any premium
payments; (10) the date or dates on which any such interest on such series
of Debt Securities will be payable and the record dates for any interest
payable on any such dates; (11) the person to whom any interest of such
series of Debt Securities will be payable, if other than the persons in
whose names such series of Debt Securities are registered at the close of
business on the record dates for such interest, and the extent to which, or
the manner in which, any interest payable on a permanent global Debt
Security on an interest payment date will be paid; (12) each office or
agency where, subject to the terms of the applicable Indenture, the
principal of and premium, if any, and interest on such series of Debt
Securities will be paid; (13) each office or agency where, subject to the
terms of the applicable Indenture, such series of Debt Securities may be
presented for registration of transfer or exchange; (14) any provisions
relating to optional redemption of such series of Debt Securities,
including the period or periods within which and the price or prices at
which such series of Debt Securities may, pursuant to any such provisions,
be redeemed, in whole or in part, and the other detailed terms of such
optional redemption provisions; (15) any provisions relating to the
obligation, if any, of the Corporation to redeem or purchase such series of
Debt Securities pursuant to any sinking fund or analogous provisions or at
the option of the holder thereof, including the
8
<PAGE>
period or periods within which at the price or prices at which such series
of Debt Securities will, pursuant to any such provisions, be redeemed or
purchased, in whole or in part, and the other detailed terms and provisions
of such obligation; (16) any terms by which such series of Debt Securities
may be convertible into or exchanged for common stock or other securities,
including Debt Securities, of the Corporation; (17) whether such series of
Debt Securities is to be issuable in permanent global form; (18)
information with respect to book-entry procedures, if any; (19) the
currency or currency units of payment of principal of and premium, if any,
and interest on such series of Debt Securities, if other than U.S. dollars;
(20) any index or formula used to determine the amount of payments of
principal of and premium, if any, on such series of Debt Securities; (21)
any additional covenants and Events of Default (as described below) and the
remedies with respect thereto not currently set forth in the respective
Indenture; and (22) any other specific terms of such series of Debt
Securities.
The ability of NationsBank to make payments of principal of and
premium, if any, and interest on the Debt Securities may be affected by the
ability of the Banks to pay dividends. The ability of the Banks, as well as
of the Corporation, to pay dividends in the future currently is, and could
be further, influenced by bank regulatory requirements and capital
guidelines. See "Supervision and Regulation."
Neither the Senior Indenture nor the Subordinated Indenture contains
provisions that would provide protection to holders of Debt Securities
against a decline in credit quality resulting from takeovers,
recapitalizations, the incurrence of additional indebtedness or similar
restructurings by the Corporation. If credit quality declines as a result
of such an event, or otherwise, the ratings of any Debt Securities then
outstanding may be withdrawn or downgraded.
GLOBAL DEBT SECURITIES
If any Debt Securities of a series are issuable in global form, the
applicable Prospectus Supplement will describe the circumstances, if any,
under which beneficial owners of interests in any such global Debt Security
may exchange such interests for Debt Securities of such series and of like
tenor and principal amount in any authorized form and denomination.
Principal of and premium, if any, and interest on any global Debt Security
will be payable in the manner described in the applicable Prospectus
Supplement.
SUBORDINATION
The Subordinated Debt Securities are subordinate and subject, to the
extent and in the manner set forth in the Subordinated Indenture, in right
of payment to the prior payment in full of all Senior Indebtedness of the
Corporation. "Senior Indebtedness" is defined by the Subordinated Indenture
as any indebtedness for money borrowed (including all indebtedness of the
Corporation for borrowed and purchased money of the Corporation, all
obligations of the Corporation arising from off-balance sheet guarantees by
the Corporation and direct credit substitutes, and obligations of the
Corporation associated with derivative products such as interest and
foreign exchange rate contracts and commodity contracts) that is
outstanding on the date of execution of the Subordinated Indenture, or is
thereafter created, incurred or assumed, for the payment of which the
Corporation is at the time of determination responsible or liable as
obligor, guarantor or otherwise, and all deferrals, renewals, extensions
and refundings of any such indebtedness or obligations, other than the
Subordinated Debt Securities or any other indebtedness as to which, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such indebtedness is subordinate in right
of payment to any other indebtedness of the Corporation.
No payment on account of principal of (and premium, if any, on) or
interest, if any, on the Subordinated Debt Securities shall be made, and no
Subordinated Debt Securities shall be purchased, either directly or
indirectly, by the Corporation or any of its subsidiaries, if any default
or event of default with respect to any Senior Indebtedness shall have
occurred and be continuing and the Corporation and the Subordinated Trustee
shall have received written notice thereof from the holders of at least 10
percent in principal amount of any kind or category of any Senior
Indebtedness (or the representative or representatives of such holders) or
the Subordinated Trustee shall have received written notice thereof from
the Corporation.
In the event that any Subordinated Debt Security is declared due and
payable before the date specified therein as the fixed date on which the
principal thereof is due and payable pursuant to the Subordinated
Indenture, or upon any payment or distribution of assets of the Corporation
of any kind or character to creditors upon any dissolution or winding up or
total or partial liquidation or reorganization of the Corporation, all
principal of (and premium, if any) and interest due or to become due upon
all Senior Indebtedness shall first be paid in full before the holders of
the Subordinated Debt Securities (the "Subordinated Debt Holders"), or the
Subordinated Trustee, shall be entitled to retain any
9
<PAGE>
assets (other than shares of stock of the Corporation as reorganized or
readjusted or securities of the Corporation or any other corporation
provided for by a plan of reorganization or readjustment, the payment of
which is subordinated, at least to the same extent as the Subordinated Debt
Securities, to the payment of all Senior Indebtedness which may at the time
be outstanding, provided that the rights of the holders of the Senior
Indebtedness are not altered by such reorganization or readjustment) so
paid or distributed in respect of the Subordinated Debt Securities (for
principal or interest, if any). Upon such dissolution or winding up or
liquidation or reorganization, any payment or distribution of assets of the
Corporation of any kind or character, whether in cash, property or
securities (other than shares of stock of the Corporation as reorganized or
readjusted or securities of the Corporation or any other corporation
provided for by a plan of reorganization or readjustment, the payment of
which is subordinated, at least to the same extent as the Subordinated Debt
Securities, to the payment of all Senior Indebtedness which may at the time
be outstanding, provided that the rights of the holders of the Senior
Indebtedness are not altered by such reorganization or readjustment), to
which the Subordinated Debt Holders or the Subordinated Trustee would be
entitled, except for the subordination provisions of the Subordinated
Indenture, shall be paid by the Corporation or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment
or distribution, or by the Subordinated Debt Holders or the Subordinated
Trustee if received by them or it, directly to the holders of the Senior
Indebtedness (pro rata to each such holder on the basis of the respective
amounts of Senior Indebtedness held by such holder) or their
representatives, to the extent necessary to pay all Senior Indebtedness in
full, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Indebtedness, before any payment or distribution
is made to the Subordinated Debt Holders or to the Subordinated Trustee.
Subject to the payment in full of all Senior Indebtedness, the
Subordinated Debt Holders shall be subrogated (equally and ratably with the
holders of all indebtedness of the Corporation which, by its express terms,
ranks on a parity with the Subordinated Debt Securities and is entitled to
like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the
Corporation applicable to the Senior Indebtedness until the Subordinated
Debt Securities shall be paid in full.
SALE OR ISSUANCE OF CAPITAL STOCK OF BANKS
The Senior Indenture prohibits the issuance, sale or other disposition
of capital stock, or securities convertible into or options, warrants or
rights to acquire capital stock, of any Principal Subsidiary Bank (as
defined below) or of any subsidiary which owns shares of capital stock, or
securities convertible into or options, warrants or rights to acquire
capital stock, of any Principal Subsidiary Bank, with the following
exceptions: (a) sales of directors' qualifying shares; (b) sales or other
dispositions for fair market value, if, after giving effect to such
disposition and to conversion of any shares or securities convertible into
capital stock of a Principal Subsidiary Bank, the Corporation would own
directly or indirectly not less than 80 percent of each class of the
capital stock of such Principal Subsidiary Bank; (c) sales or other
dispositions made in compliance with an order of a court or regulatory
authority of competent jurisdiction; (d) any sale by a Principal Subsidiary
Bank (or any successor corporation thereto) of additional shares of its
capital stock to its shareholders at any price, so long as (i) prior to
such sale the Corporation owns, directly or indirectly, shares of the same
class and (ii) immediately after such sale, the Corporation owns, directly
or indirectly, at least as great a percentage of each class of capital
stock of such Principal Subsidiary Bank as it owned prior to such sale of
additional shares; (e) any sale by a Principal Subsidiary Bank (or any
successor corporation thereto) of additional securities convertible into
shares of its capital stock to its shareholders at any price, so long as
(i) prior to such sale the Corporation owns, directly or indirectly,
securities of the same class and (ii) immediately after such sale the
Corporation owns, directly or indirectly, at least as great a percentage of
each class of such securities convertible into shares of capital stock of
such Principal Subsidiary Bank as it owned prior to such sale of additional
securities; (f) any sale by a Principal Subsidiary Bank (or any successor
corporation thereto) of additional options, warrants or rights to subscribe
for or purchase shares of its capital stock to its shareholders at any
price, so long as (i) prior to such sale the Corporation owns, directly or
indirectly, options, warrants or rights, as the case may be, of the same
class and (ii) immediately after such sale, the Corporation owns, directly
or indirectly, at least as great a percentage of each class of such
options, warrants or rights, as the case may be, to subscribe for or
purchase shares of capital stock of such Principal Subsidiary Bank as it
owned prior to such sale of additional options, warrants or rights; or (g)
any issuance of shares of capital stock, or securities convertible into or
options, warrants or rights to subscribe for or purchase shares of capital
stock, of a Principal Subsidiary Bank or any subsidiary which owns shares
of capital stock, or securities convertible into or options, warrants or
rights to acquire capital stock, of any Principal Subsidiary Bank, to the
Corporation or a wholly owned subsidiary of the Corporation.
10
<PAGE>
A Principal Subsidiary Bank is defined in the Senior Indenture as any
Subsidiary Bank (other than NationsBank of Delaware, National Association)
with total assets equal to more than 10 percent of the Corporation's total
consolidated assets.
WAIVER OF COVENANTS
Under the terms of either Indenture, compliance with certain covenants
or conditions of such Indenture may be waived by the holders of a majority
in principal amount of the Debt Securities of all series to be affected
thereby and at the time outstanding under that Indenture (including, in the
case of holders of Senior Debt Securities, the covenant described above).
MODIFICATION OF THE INDENTURES
Each Indenture contains provisions permitting the Corporation and the
applicable Trustee to modify such Indenture or the rights of the holders of
Debt Securities thereunder, with the consent of the holders of not less
than 66 2/3 percent in aggregate principal amount of the Debt Securities of
all series at the time outstanding under that Indenture and to be affected
thereby (voting as one class), except that no such modification shall (a)
extend (or, with respect to the Senior Indenture, otherwise change) the
fixed maturity of, reduce (or, with respect to the Senior Indenture,
otherwise change) the principal amount or redemption premium, if any, of,
or reduce (or, with respect to the Senior Indenture, otherwise change) the
rate of or extend (or, with respect to the Senior Indenture, otherwise
change) the time of payment of interest on, any Debt Security without the
consent of the holder of each security so affected, or (b) reduce the
aforesaid percentage of Debt Securities, the consent of holders of which is
required for any such modification, without the consent of the holders of
all Debt Securities then outstanding under that Indenture. Each Indenture
also provides that the Corporation and the respective Trustee may, from
time to time, execute supplemental indentures in certain limited
circumstances without the consent of any holders of outstanding Debt
Securities.
DEFAULTS AND RIGHTS OF ACCELERATION
An Event of Default is defined in the Subordinated Indenture as
bankruptcy of the Corporation under Federal bankruptcy laws. An Event of
Default is defined in the Senior Indenture as (i) the Corporation's failure
to pay principal (or premium, if any) when due, (ii) the Corporation's
failure to pay interest within 30 days after the same becomes due, (iii)
the Corporation's breach of its other covenants contained in the Senior
Debt Securities or the Senior Indenture, which breach is not cured within
90 days after written notice by the Senior Trustee or by the holders of at
least 25 percent in principal amount of the Senior Debt Securities then
outstanding under the Senior Indenture and affected thereby, and (iv)
certain events involving the bankruptcy, insolvency or liquidation of the
Corporation.
Each Indenture provides that if an Event of Default under the
respective Indenture occurs and is continuing, either the respective
Trustee or the holders of 25 percent in principal amount of the Debt
Securities then outstanding under that Indenture (or, with respect to an
Event of Default under the Senior Indenture due to a default in the payment
of principal (or premium, if any) or interest or performance of any other
covenant, the outstanding Debt Securities of all series affected by such
default) may declare the principal amount of all of such Debt Securities to
be due and payable immediately. Payment of principal of the Subordinated
Debt Securities may not be accelerated in the case of a default in the
payment of principal (or premium, if any) or interest or the performance of
any other covenant of the Corporation. Upon certain conditions a
declaration of an Event of Default may be annulled and past defaults may be
waived by the holders of a majority in principal amount of the Debt
Securities then outstanding (or of such series affected, as the case may
be).
COLLECTION OF INDEBTEDNESS, ETC.
Each Indenture also provides that in the event of a failure by the
Corporation to make payment of principal of or interest on the Debt
Securities (and, in the case of payment of interest, such failure to pay
shall have continued for 30 days), the Corporation will, upon demand of the
respective Trustee, pay to it, for the benefit of the holders of the Debt
Securities, the amount then due and payable on the Debt Securities for
principal and interest, with interest on the overdue principal and, to the
extent payment of interest shall be legally enforceable, upon overdue
installments of interest at the rate borne by the Debt Securities. Each
Indenture further provides that if the Corporation fails to pay such amount
forthwith upon such demand, the respective Trustee may, among other things,
institute a judicial proceeding for the collection thereof. However, each
Indenture provides that notwithstanding any other provision of the
Indenture, the holder of any Debt Security shall have the right to
institute suit for the enforcement of any payment of principal of and
11
<PAGE>
interest on such Debt Security on the respective stated maturities
expressed in such Debt Security and that such right shall not be impaired
without the consent of such holder.
The holders of a majority in principal amount of the Debt Securities
then outstanding under an Indenture shall have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Trustee under that Indenture, provided that the holders
shall have offered to the Trustee reasonable indemnity against expenses and
liabilities. Each Indenture requires the annual filing by the Corporation
with the respective Trustee of a certificate as to the absence of default
and as to compliance with the terms of that Indenture.
CONCERNING THE TRUSTEES
The Corporation and the Banks have from time to time maintained
deposit accounts and conducted other banking transactions with The Bank of
New York and BankAmerica National Trust Company and their affiliated
entities in the ordinary course of business. The Bank of New York also
serves as trustee for certain series of the Corporation's outstanding
subordinated indebtedness under other indentures.
LEGAL OPINIONS
The legality of the Debt Securities will be passed upon for the
Corporation by Smith Helms Mulliss & Moore, Charlotte, North Carolina, and
for the Underwriters by Stroock & Stroock & Lavan, New York, New York. As
of the date of this Prospectus, certain members of Smith Helms Mulliss &
Moore beneficially owned approximately 25,000 shares of the Corporation's
Common Stock.
EXPERTS
The consolidated financial statements of the Corporation incorporated
in this Prospectus by reference to NationsBank's Annual Report on Form 10-K
for the year ended December 31, 1992 have been so incorporated in reliance
on the report of Price Waterhouse, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
12
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR BY THE AGENTS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF. THIS PROSPECTUS
SUPPLEMENT AND PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE
IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Description of Notes........................... S-2
United States Taxation......................... S-11
Plan of Distribution........................... S-16
PROSPECTUS
Incorporation of Certain Documents by
Reference.................................... 2
Available Information.......................... 2
NationsBank Corporation........................ 3
Supervision and Regulation..................... 4
Use of Proceeds................................ 5
Ratios of Earnings to Fixed Charges............ 6
Plan of Distribution........................... 6
Description of Debt Securities................. 7
Legal Opinions................................. 12
Experts........................................ 12
</TABLE>
$1,000,000,000
NationsBank(Register Mark)
SENIOR MEDIUM-TERM NOTES,
SERIES C
SUBORDINATED MEDIUM-TERM NOTES,
SERIES C
DUE FROM NINE MONTHS TO THIRTY YEARS FROM DATE OF ISSUE
PROSPECTUS SUPPLEMENT
NATIONSBANC CAPITAL MARKETS, INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
DECEMBER 20, 1994
