<PAGE>
424B5
File Number 33-57533
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 24, 1995)
$300,000,000
NATIONSBANK
FLOATING RATE SENIOR NOTES, DUE 1998
Interest on the Floating Rate Senior Notes, due 1998 (the "Notes") is
payable by NationsBank Corporation ("NationsBank" or the "Corporation")
quarterly in arrears on each March 27, June 27, September 27 and December 27
commencing June 27, 1995. The Notes will mature on March 27, 1998 and are not
redeemable prior to maturity. The Notes will not be listed on a securities
exchange.
The rate of interest payable on the Notes will be determined and reset
quarterly as described herein based upon (i) LIBOR (as defined herein) plus (ii)
0.15%. The interest rate for the period from and including March 27, 1995 to,
but excluding, June 27, 1995 will be determined as described herein based on
LIBOR as of March 23, 1995 plus 0.15%.
The Notes will be issued in book-entry only form and will be represented by
one or more fully registered global securities (the "Global Notes") registered
in the name of a nominee of The Depository Trust Company, as depository ("DTC").
Except as described herein, Notes in definitive form will not be issued. The
Notes will be available for purchase in denominations of $1,000 and integral
multiples thereof. Settlement for the Notes will be made in immediately
available funds. So long as the Notes are represented by Global Notes registered
in the name of DTC, the Notes will trade in DTC's Same-Day Funds Settlement
System and secondary market trading activity for the Notes will therefore settle
in immediately available funds.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS, ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK, ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.
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.
[CAPTION]
<TABLE>
<S> <C> <C>
PRICE TO UNDERWRITING
PUBLIC (1) DISCOUNT (2)
<S> <C> <C>
Per Note.......................................... 100% .30%
Total............................................. $300,000,000 $900,000
<CAPTION>
PROCEEDS TO
THE CORPORATION (1) (3)
<S> <C>
Per Note.......................................... 99.70%
Total............................................. $299,100,000
</TABLE>
(1) Plus accrued interest, if any, from March 27, 1995.
(2) The Corporation has agreed to indemnify the Underwriters named herein
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(3) Before deducting expenses payable by the Corporation estimated to be
$150,000.
The Notes are offered by the Underwriters, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of certain legal
matters by counsel for the Underwriters and certain other conditions. The
Underwriters reserve the right to reject any order in whole or in part. It is
expected that delivery of the Notes will be made through the facilities of DTC
on March 27, 1995.
NATIONSBANC CAPITAL MARKETS, INC.
BEAR, STEARNS & CO. INC.
CS FIRST BOSTON
J.P. MORGAN SECURITIES INC.
The date of this Prospectus Supplement is March 20, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF THE NOTES
The information herein concerning the Notes should be read in conjunction
with the statements under "Description of Debt Securities" in the accompanying
Prospectus.
GENERAL
The Notes will be issued in the aggregate principal amount of $300,000,000
under an Indenture dated as of January 1, 1995 between the Corporation and
BankAmerica National Trust Company as trustee (the "Indenture") and will mature
on March 27, 1998 (the "Maturity Date"). The Notes constitute a single series of
debt securities under the Indenture and are unsecured and unsubordinated
obligations of the Corporation which rank equally with all other unsecured
senior debt of the Corporation. The Notes will be available for purchase in
denominations of $1,000 and integral multiples thereof. The Notes may not be
redeemed prior to the Maturity Date and are not entitled to any sinking fund.
Initially, the Corporation will make payments of principal and interest at the
office of NationsBank of Georgia, National Association, 600 Peachtree Street,
Suite 900, Atlanta, Georgia, as paying agent.
INTEREST
Interest on the Notes will be payable quarterly in arrears on March 27,
June 27, September 27 and December 27 of each year (each, an "Interest Payment
Date") commencing on June 27, 1995 to those persons in whose names the Notes are
registered at the close of business on the preceding March 12, June 12,
September 12 and December 12, as the case may be. Interest payable at the
Maturity Date will be payable to the owner of the Notes at such date. The
"Interest Payment Period" with respect to a Note is each successive period from
and including an Interest Payment Date with respect to such Note (or March 27,
1995 in the case of the initial Interest Payment Period) to, but excluding, the
next Interest Payment Date or the Maturity Date, as the case may be.
The interest rate on the Notes will be reset quarterly. The interest rate
on the Notes for each Interest Payment Period will be determined on the Interest
Determination Date for such Interest Payment Period. The "Interest Determination
Date" for an Interest Payment Period is two London Banking Days (as defined
below) preceding the first day of such Interest Payment Period (an "Interest
Reset Date"). The interest rate on the Notes for each Interest Payment Period
will be effective as of the Interest Reset Date for such Interest Payment
Period.
The Notes will bear interest for each Interest Payment Period at a rate per
annum equal to (i) LIBOR (as defined below) plus (ii) 0.15%. The initial
interest rate on the Notes will be LIBOR in effect on March 23, 1995 plus 0.15%.
LIBOR and the resulting interest rate for each Interest Payment Period will be
determined by the Calculation Agent (described below) in accordance with the
following provisions:
LIBOR, with respect to an Interest Determination Date, is a rate of
interest equal to the rate (expressed as a percentage per annum) for deposits in
U.S. dollars for a three-month period that appears on Telerate Page 3750 (as
defined below) as of 11:00 A.M., London time, on that Interest Determination
Date. If such rate does not appear on Telerate Page 3750 on such Interest
Determination Date, the Calculation Agent will request the principal London
offices of each of four major reference banks in the London interbank market to
provide the Calculation Agent with its offered quotation for deposits in U.S.
dollars for a three-month period to prime banks in the London interbank market
at approximately 11:00 A.M., London time, on such Interest Determination Date
and in a principal amount of not less than $1,000,000 and that is representative
of a single transaction in U.S. dollars in such market at such time. If at least
two such quotations are provided, LIBOR determined on such Interest
Determination Date will be the arithmetic mean of such quotations. If fewer than
two such quotations are provided, LIBOR for such Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00 A.M. in
the City of New York on such Interest Determination Date by
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<PAGE>
three major banks in the City of New York selected by the Calculation Agent for
loans in U.S. dollars to leading European banks and in a principal amount of not
less than $1,000,000 and that is representative of a single transaction in such
U.S. dollars 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 Interest Determination Date will be LIBOR
then in effect for the Notes on that Interest Determination Date.
If any Interest Payment Date for a Note falls on a day that is not a
Business Day, the Interest Payment Date will be the following day that is a
Business Day unless such Interest Payment Date is in the next succeeding
calendar month, in which case the Interest Payment Date will be the immediately
preceding day that is a Business Day. If the Maturity Date falls on a day that
is not a Business Day, the payment of principal and interest will 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.
Accrued interest on any 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 March 27, 1995, 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. The interest factor (expressed
as a decimal) for each such day is computed by dividing the interest rate in
effect on such day by 360. All percentages resulting from any calculation of
interest on the 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 will be rounded to
the nearest cent (with one-half cent being rounded upward).
As used herein:
"Business Day" with respect to any Note means any day other than a Saturday
or Sunday that (i) is not a day on which banking institutions in New York, New
York, Atlanta, Georgia or Charlotte, North Carolina are authorized or required
by law or regulation to be closed and (ii) is a London Banking Day.
"London Banking Day" means a day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Telerate Page 3750" means the display designated as Page 3750 on the
Dow-Jones Telerate Service (or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers Association as the information vendor for the purpose of displaying
London interbank offered rates for US dollar deposits).
The Corporation has appointed one of its banking subsidiaries, NationsBank
of Georgia, National Association, as agent to calculate interest on the Notes
(in such capacity, the "Calculation Agent"). Upon the request of any holder or
beneficial holder of the Notes, the Calculation Agent will provide the interest
rate then in effect and, if determined, the interest rate that will become
effective at the next Interest Reset Date. In the absence of manifest error,
such determination is binding on all parties.
PAYING AGENT, SECURITY REGISTRAR AND TRANSFER AGENT
Until the Notes are paid, the Corporation will at all times maintain a
Paying Agent, Security Registrar and Transfer Agent, which may or may not be the
same person, for the Notes. The Corporation has initially appointed NationsBank
of Georgia, National Association, as Paying Agent, Security Registrar and
Transfer Agent with respect to the Notes (at its corporate trust office in
Atlanta, Georgia). The Corporation reserves the right at any time to vary or
terminate the appointment of any Paying Agent, Security Registrar and Transfer
Agent, to appoint additional Paying Agents, Security Registrars and Transfer
Agents and to approve any change in the office through which the Paying Agent,
Security Registrar or Transfer Agent shall act.
S-3
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CAPITALIZATION
The following table sets forth the actual capitalization of NationsBank as
of December 31, 1994 and as adjusted to give effect to (i) the issuance of the
Notes offered hereby, (ii) the issuance of certain of the Corporation's
medium-term notes during the period beginning January 1, 1995 through the date
of this Prospectus Supplement, (iii) the issuance on February 27, 1995 of the
Corporation's 7 1/2% Senior Notes, due 1997, and (iv) the maturity of certain
senior notes during the period beginning January 1, 1995 through the date of
this Prospectus Supplement.
<TABLE>
<CAPTION>
NATIONSBANK AS
LONG-TERM DEBT ACTUAL ADJUSTED
<S> <C> <C>
Senior debt: (AMOUNTS IN MILLIONS)
NationsBank Corporation (parent):
5 3/8% notes, due 1995............................................................................ 400 400
11.70% notes, due 1995............................................................................ 75 --
Floating rate medium-term notes, due 1995-2000.................................................... 1,438 1,988
4.36 to 8.20% medium-term notes, due 1995-2000.................................................... 482 482
4 3/4% notes, due 1996............................................................................ 399 399
8 1/2% notes, due 1996............................................................................ 150 150
5.51% ESOP secured notes, due 1996-1999........................................................... 125 125
7 1/2% notes, due 1997............................................................................ -- 249
5 1/8% notes, due 1998............................................................................ 300 300
6 5/8% notes, due 1998............................................................................ 399 399
Floating rate notes, due 1998..................................................................... -- 299
5 3/8% notes, due 2000............................................................................ 397 397
9 1/4% unsecured notes, due 2006.................................................................. 124 124
Other senior notes................................................................................ 101 81
4,390 5,393
Banking subsidiaries: (1)
Floating rate collateralized financing, due 1995-1996............................................. 477 477
Other senior notes................................................................................ 80 80
557 557
Total senior debt.............................................................................. 4,947 5,950
Subordinated debt:
NationsBank Corporation (parent):
9 3/8% notes, due 1997............................................................................ 82 82
9 3/4% notes, due 1999............................................................................ 100 100
10 1/2% notes, due 1999........................................................................... 299 299
9 1/8% notes, due 2001............................................................................ 299 299
8 1/8% notes, due 2002............................................................................ 349 349
6.20% medium-term notes, due 2003................................................................. 75 75
6 1/2% notes, due 2003............................................................................ 600 600
7 3/4% notes, due 2004............................................................................ 299 299
6 7/8% notes, due 2005............................................................................ 398 398
9 3/8% notes, due 2009............................................................................ 397 397
10.20% notes, due 2015............................................................................ 200 200
8.57% medium-term notes, due 2024, putable 2004................................................... 100 100
Other subordinated notes.......................................................................... 10 10
3,208 3,208
Banking subsidiaries: (1)
9 1/2% notes, due 2004............................................................................ 301 301
Floating rate notes, due 2019, putable 1999....................................................... 8 8
309 309
Total subordinated debt........................................................................ 3,517 3,517
Total long-term debt........................................................................... 8,464 9,467
SHAREHOLDERS' EQUITY
Preferred stock, authorized -- 45,000,000 shares ESOP Convertible, Series C, issued -- 2,606,657
shares............................................................................................ 111 111
Common stock, authorized -- 800,000,000 shares; issued -- 276,451,552 (2)........................... 4,740 4,740
Retained earnings................................................................................... 6,451 6,451
Other, including loan to ESOP trust................................................................. (291) (291 )
Total shareholders' equity..................................................................... 11,011 11,011
$19,475 $20,478
</TABLE>
(1) These obligations are direct obligations of certain of the subsidiaries of
NationsBank and, as such, constitute claims against such subsidiaries prior
to the Corporation's equity interest therein.
S-4
<PAGE>
(2) As of December 31, 1994, (a) 13.7 million shares of Common Stock were
reserved for issuance under various employee benefit plans of the
Corporation and upon the conversion of the ESOP Convertible Preferred Stock,
Series C; and (b) 3.5 million shares of Common Stock were reserved for
issuance under the Corporation's Dividend Reinvestment and Stock Purchase
Plan. In addition, the Board of Directors has authorized the repurchase in
the open market from time to time of up to 26.5 million shares of Common
Stock representing the number of shares of Common Stock the Corporation
intends to issue for its Dividend Reinvestment and Stock Purchase Plan and
other employee benefit plans, small acquisitions and other purposes.
As of December 31, 1994, the Corporation had $2.4 billion of commercial
paper and other short-term notes payable outstanding. During the year ended
December 31, 1994, the amount of commercial paper and other short-term notes
payable outstanding averaged $2.4 billion and ranged from a high of $2.8 billion
to a low of $2.0 billion. At December 31, 1994, the Corporation had unused lines
of credit aggregating $1.5 billion, principally to support commercial paper
borrowings.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
each of the years in the five-year period ended December 31, 1994:
<TABLE>
<CAPTION>
1994 1993 1992 1991(1) 1990
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits..................................................... 1.9 2.3 2.4 1.1 1.3
Including interest on deposits..................................................... 1.5 1.5 1.4 1.0 1.1
</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.
S-5
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data for the five years ended December 31,
1994 are derived from financial statements of the Corporation audited by Price
Waterhouse LLP, independent accountants.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
(AMOUNTS IN MILLIONS EXCEPT PER SHARE INFORMATION AND RATIOS)
Income statement:
Income from earning assets................................... $ 10,529 $ 8,327 $ 7,780 $ 9,398 $ 10,278
Interest expense............................................. 5,318 3,690 3,682 5,599 6,670
Net interest income.......................................... 5,211 4,637 4,098 3,799 3,608
Provision for credit losses.................................. 310 430 715 1,582 1,025
Gains on sales of securities................................. (13) 84 249 454 67
Noninterest income........................................... 2,597 2,101 1,913 1,742 1,605
Restructuring expense........................................ -- 30 -- 330 91
Other noninterest expense.................................... 4,930 4,371 4,149 3,974 3,538
Income before income taxes and effect of change in method of
accounting for income taxes................................ 2,555 1,991 1,396 109 626
Income tax expense (benefit)................................. 865 690 251 (93) 31
Income before effect of change in method of accounting for
income taxes............................................... 1,690 1,301 1,145 202 595
Effect of change in method of accounting for income taxes.... -- 200 -- -- --
Net income................................................... 1,690 1,501 1,145 202 595
Net income applicable to common shareholders................. 1,680 1,491 1,121 171 559
Per common share:
Earnings before effect of change in method of accounting for
income taxes............................................... 6.12 5.00 4.60 .76 2.61
Earnings..................................................... 6.12 5.78 4.60 .76 2.61
Cash dividends paid.......................................... 1.88 1.64 1.51 1.48 1.42
Shareholders' equity (period-end)............................ 39.70 36.39 30.80 27.03 27.30
Balance sheet (period-end):
Total assets (1)............................................. 169,604 157,686 118,059 110,319 112,791
Total loans, leases and factored accounts receivable, net of
unearned income............................................ 103,371 92,007 72,714 69,108 70,891
Total deposits............................................... 100,470 91,113 82,727 88,075 89,065
Capital leases and long-term debt............................ 8,488 8,352 3,066 2,876 2,766
Common shareholders' equity.................................. 10,976 9,859 7,793 6,252 5,898
Total shareholders' equity................................... 11,011 9,979 7,814 6,518 6,283
Weighted average common shares outstanding (in thousands)...... 274,656 257,969 243,748 226,305 213,841
Performance ratios:
Return on average assets (1)................................. 1.02% .97%(3) 1.00% .17% .52%
Return on average common shareholders' equity (2)............ 16.10 15.00(3) 15.83 2.70 9.56
Risk-based capital ratios:
Tier 1....................................................... 7.43 7.41 7.54 6.38 5.79
Total........................................................ 11.47 11.73 11.52 10.30 9.58
Leverage capital ratio......................................... 6.18 6.00 6.16 5.07 4.83
Total equity to total assets (1)............................... 6.49 6.33 6.62 5.91 5.57
Asset quality ratios:
Allowance for credit losses as a percentage of total loans,
leases and factored accounts receivable, net of unearned
income..................................................... 2.11 2.36 2.00 2.32 1.86
Allowance for credit losses as a percentage of nonperforming
loans...................................................... 273.07 193.38 103.11 81.82 100.46
Net charge-offs as a percentage of average loans, leases and
factored accounts receivable............................... 0.33 .51 1.25 1.86 .88
Nonperforming assets as a percentage of net loans, leases,
factored accounts receivable and foreclosed properties..... 1.10 1.92 2.72 4.01 2.32
</TABLE>
(1) Excludes assets of the Special Asset Division, a discrete business division
established by NationsBank for the purpose of managing the disposition of
certain assets specified by an assistance agreement between NationsBank and
certain of its subsidiaries and the FDIC. Pursuant to the terms of the
assistance agreement, the assets of the Special Asset Division were sold to
the FDIC effective November 30, 1991.
(2) Average common shareholders' equity does not include the effect of market
value adjustments to securities available for sale and marketable equity
securities.
(3) In 1993, return on average assets and return on average common shareholders'
equity after the tax benefit from the impact of adopting SFAS 109
(Accounting for Income Taxes) were 1.12% and 17.33%, respectively.
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<PAGE>
SETTLEMENT AND REGISTRATION
SAME DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Notes are represented by Global Notes, all
payments of principal and interest will be made by the Corporation in
immediately available funds.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing house or next day funds. In contrast, so long as the Notes
are represented by Global Notes registered in the name of DTC or its nominee,
the Notes will trade in DTC's Same Day Fund Settlement System and secondary
market trading activity in the Notes will therefore be required by DTC to settle
in immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
Notes.
BOOK-ENTRY SYSTEM
The Notes will be issued in book-entry form only and will be represented by
one or more Global Notes registered in the name of Cede & Co., as nominee of
DTC.
Under the book-entry system of DTC, 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 Note, DTC will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual Notes represented by
such Global Note to the accounts of Participants as designated by the
Underwriters. The ownership of beneficial interests in such Global Note will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC (with respect to interests of Participants) and the
records of Participants (with respect to interests of Indirect Participants) and
Indirect Participants. So long as DTC, or its nominee, is the registered holder
of a Global Note, DTC or its nominee will be considered the sole owner or holder
of the Notes represented by such Global Note for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Note will not be entitled to have Notes registered in their names, will not
receive or be entitled to receive physical delivery of such Notes in
certificated form and will not be considered the owners or holders thereof under
the applicable Indenture. 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 Note.
DTC has advised the Corporation 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
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 the Underwriters), 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 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.
S-7
<PAGE>
To facilitate subsequent transfers, all securities deposited 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 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 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.
Except as otherwise provided herein, the holder of a Global Note shall be
the only person entitled to receive payments with respect to Notes represented
by such Global Note. Accordingly, payments of principal of and any interest on
individual Notes represented by a Global Note will be made only to DTC or its
nominee, as the case may be, as the registered holder of the Global Note
representing such Notes. DTC has advised the Corporation 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 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 Underwriters 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 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 the Notes, nor any Paying Agent, Security
Registrar or Transfer Agent for the 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 Note or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial interests in Global Notes among its Participants, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time.
If DTC is at any time unwilling, unable or ineligible to continue as a
depositary and a successor depositary is not appointed by the Corporation within
90 days, the Corporation will issue registered Notes in certificated form in
exchange for beneficial interests in each Global Note. In addition, the
Corporation may at any time determine not to have Notes represented by Global
Notes and, in such event, will issue registered Notes in certificated form in
exchange for beneficial interests in Global Notes. In any such instance, an
owner of a beneficial interest in a Global Note will be entitled to physical
delivery in certificated form of a Note or Notes equal in principal amount to
such beneficial interest and to have such Note or Notes registered in its name.
Any Notes so issued in certificated form will be issued in denominations of
$1,000 or any integral multiple in excess thereof and will be issued in
registered form only, without coupons.
S-8
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated March 20, 1995 (the "Underwriting Agreement") among the Corporation and
the underwriters named therein (the "Underwriters"), the Corporation has agreed
to sell to each of the Underwriters and each of the Underwriters has severally
agreed to purchase the principal amount of the Notes set forth opposite its name
below at the price set forth on the cover page of this Prospectus Supplement.
The Underwriters are committed to purchase all the Notes offered hereby if any
of the Notes are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER THE NOTES
<S> <C>
NationsBanc Capital Markets, Inc.......................................................... $ 75,000,000
Bear, Stearns & Co. Inc................................................................... 75,000,000
CS First Boston Corporation............................................................... 75,000,000
J.P. Morgan Securities Inc................................................................ 75,000,000
Total........................................................................... $300,000,000
</TABLE>
The Underwriters have advised the Corporation that they propose initially to
offer the Notes to the public at the Price to Public set forth on the cover page
of this Prospectus Supplement, and to certain dealers at such price less a
concession not in excess of .20% of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of .125% of such principal amount on sales to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.
The Underwriting Agreement provides that the Corporation will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriters
may be required to make in respect thereof.
The Notes are a new issue of securities with no established trading market.
The Corporation does not intend to apply for listing of the Notes on a national
securities exchange. The Corporation has been advised by the Underwriters that
they may make a market in the Notes. The Underwriters, however, are not
obligated to make a market in the Notes and may discontinue any market making at
any time without notice. The Corporation cannot provide any assurance that a
secondary market for the Notes will develop.
NationsBanc Capital Markets, Inc. ("NCMI") is a direct, 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 that 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 (i)
NCMI in acting as a principal in market making transactions or in acting as an
agent and (ii) other 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.
Each of the Underwriters provides or has provided investment banking
services to NationsBank from time to time in the ordinary course of business.
S-9
<PAGE>
PROSPECTUS
NATIONSBANK
DEBT SECURITIES
NationsBank Corporation ("NationsBank" or the "Corporation") may offer from
time to time 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").
NationsBank may sell up to $3,000,000,000 in aggregate initial offering price of
Debt Securities (or the U.S. dollar equivalent thereof if any of the Debt
Securities are denominated in a foreign currency or currency unit), which may be
offered, separately or together, in one or more 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"). Pursuant
to the terms of the Registration Statement of which this Prospectus constitutes
a part, NationsBank may also offer and sell shares of its preferred stock (the
"Preferred Stock"), which may be represented by depositary shares (the
"Depositary Shares"), and shares of its common stock (the "Common Stock"). Any
such Preferred Stock, Depositary Shares or Common Stock will be 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 Debt Securities may be denominated in U.S. dollars or in another
currency or currency unit (such as the European Currency Unit), and the
principal of (and premium, if any, on) or interest on the Debt Securities may be
payable in U.S. dollars or such foreign currency or currency unit. The specific
terms of each series of Debt Securities offered pursuant to this Prospectus,
including the specific designation, aggregate principal amount, currency or
currency unit in which the principal and any premium or interest may be payable,
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, the form of such series, any applicable United States
Federal tax considerations, any securities exchange on which such Debt
Securities may be listed, and any other terms of such series of Debt Securities
will be set forth in the Prospectus Supplement relating to such series.
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 or a pricing supplement thereto. 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 BANK 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 (THE "FDIC") OR ANY OTHER GOVERNMENT AGENCY, AND
INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
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 February 24, 1995.
<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, 1993;
(b) The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994, June 30, 1994 and September 30, 1994;
(c) The Corporation's Current Reports on Form 8-K filed February 24,
1993, as subsequently amended; October 8, 1993, as subsequently amended;
August 4, 1994; September 21, 1994; October 3, 1994; December 22, 1994;
January 26, 1995; and February 21, 1995; and
(d) The description of the Corporation's Common Stock contained in its
registration statement filed pursuant to Section 12 of the 1934 Act, and
any amendment or report filed for the purpose of updating such description,
including the Corporation's Current Report on Form 8-K filed on September
21, 1994.
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,
NATIONSBANK CORPORATE CENTER, CORPORATE TREASURY DIVISION, CHARLOTTE, NORTH
CAROLINA 28255. TELEPHONE REQUESTS MAY BE DIRECTED TO (704) 386-5972.
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
Citicorp 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 (the "BHCA"), with its principal assets being
the stock of its banking and non-banking subsidiaries. Through its banking
subsidiaries (the "Banks") and its various non-banking subsidiaries, NationsBank
provides banking and banking-related services, primarily throughout the
Southeast and Mid-Atlantic 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.
OPERATIONS
NationsBank provides a diversified range of banking and certain non-banking
financial services to its customers through the General Bank, the Institutional
Group and the Financial Services unit. The General Bank provides comprehensive
service in the commercial and retail banking fields, including Trust and Private
Banking operations, the origination and servicing of home mortgage loans, the
issuance and servicing of credit cards and certain insurance services. The
General Bank also offers full service brokerage services and discount brokerage
services for its customers through subsidiaries of NationsBank.
The Institutional Group provides to domestic and international customers
comprehensive corporate banking and investment banking services, including loan
syndication, treasury management, and leasing; underwriting, trading or
distributing a wide range of securities (including bank-eligible securities and,
to a limited extent, bank-ineligible securities as authorized by the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") under
Section 20 of the Glass-Steagall Act); options, futures, forwards and swaps on
certain interest rate and commodity products, and spot and forward foreign
exchange contracts. The Institutional Group provides its services through
various domestic offices as well as offices located in London, Frankfurt,
Singapore, Mexico City, Grand Cayman, Nassau, Tokyo, and Osaka.
NationsBank currently has banking operations in the following jurisdictions
(with the approximate number of banking offices as of December 31, 1994 in
parentheses): District of Columbia (34); Florida (392); Georgia (197); Kentucky
(4); Maryland (236); North Carolina (233); South Carolina (177); Tennessee
(104); Texas (281); and Virginia (246). NationsBank 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 services throughout the states in which they are located, through
approximately 2,100 automated teller machines.
The Financial Services unit consists of NationsCredit Corporation, a
consumer finance subsidiary, and Greyrock Capital Group Inc. (formerly named
Nations Financial Capital Corporation), a commercial finance subsidiary.
NationsCredit Corporation provides consumer and retail loan programs and also
offers inventory financing to manufacturers, importers and distributors; it has
approximately 240 offices located in 32 states. Greyrock Capital Group Inc.
meets the specialized capitalization, leasing, debt restructuring and
acquisition needs of small to large corporations; it also provides consumer
loans secured by automobiles and real estate.
As part of its operations, NationsBank regularly evaluates 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. In addition, NationsBank regularly analyzes the
values of, and submits bids for, the acquisition of customer-based funds and
other liabilities and assets of such financial institutions and other
businesses. As a general rule, NationsBank publicly announces such material
acquisitions when a definitive agreement has been reached.
3
<PAGE>
SUPERVISION AND REGULATION
GENERAL
As a registered bank holding company, 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"). The Banks are also subject to regulation by the
FDIC and other federal regulatory agencies. 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 the operations and management of NationsBank and its ability to make
distributions. The following discussion summarizes certain aspects of those laws
and regulations that affect NationsBank.
Under the BHCA, the activities of NationsBank, and those of companies which
it controls or in which it holds more than 5% of the voting stock, are limited
to banking or managing or controlling banks or furnishing services to or
performing services for its subsidiaries, or any other activity which the
Federal Reserve Board determines to be so closely related to banking or managing
or controlling banks as to be a proper incident thereto. In making such
determinations, the Federal Reserve Board is required to consider whether the
performance of such activities by a bank holding company or its subsidiaries can
reasonably be expected to produce benefits to the public such as greater
convenience, increased competition or gains in efficiency that outweigh possible
adverse effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest or unsound banking practices. Generally, bank
holding companies, such as NationsBank, are required to obtain prior approval of
the Federal Reserve Board to engage in any new activity not previously approved
by the Federal Reserve Board or to acquire more than 5% of any class of voting
stock of any company.
The BHCA also requires bank holding companies to obtain the prior approval
of the Federal Reserve Board before acquiring more than 5% of any class of
voting stock of any bank which is not already majority-owned by the bank holding
company. Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency
Act of 1994 (the "Interstate Banking and Branching Act"), a bank holding company
will be able to acquire banks in states other than its home state beginning
September 29, 1995. Until such provisions are effective, interstate acquisitions
by bank holding companies will be subject to current Federal law, which provides
that no application to acquire shares of a bank located outside of North
Carolina (the state in which the operations of the Banks were principally
conducted on the date the Corporation became subject to the BHCA) may be
approved by the Federal Reserve Board unless such acquisition is specifically
authorized by the laws of the state in which the bank whose shares are to be
acquired is located.
The Interstate Banking and Branching Act also authorizes banks to merge
across state lines, thereby creating interstate branches, beginning June 1,
1997. Under such legislation, each state has the opportunity either to "opt out"
of this provision, thereby prohibiting interstate branching in such states, or
to "opt in" at an earlier time, thereby allowing interstate branching within
that state prior to June 1, 1997. Furthermore, pursuant to such Act, a bank is
now able to open new branches in a state in which it does not already have
banking operations, if the laws of such state permit such DE NOVO branching.
As previously described, NationsBank regularly evaluates merger and
acquisition opportunities, and it anticipates that it will continue to evaluate
such opportunities in light of the new legislation.
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. The likelihood and timing of any such changes
and the impact such changes might have on NationsBank and its subsidiaries,
however, cannot be determined at this time.
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.
4
<PAGE>
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 December 31, 1994 were 7.43 percent and
11.47 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 December 31, 1994
was 6.18 percent. Management believes that NationsBank 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% 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, pursuant to FDICIA,
the various regulatory agencies have prescribed 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.
Banking agencies have recently adopted final regulations which mandate that
regulators take into consideration concentrations of credit risk and risks from
non-traditional activities, as well as an institution's ability to manage those
risks, when determining the adequacy of an institution's capital. That
evaluation will be made as a part of the institution's regular safety and
soundness examination. Banking agencies also have proposed amendments to
existing risk-based capital regulations to provide for the consideration of
interest rate risk (when the interest rate sensitivity of an institution's
assets does not match the sensitivity of its liabilities or its
off-balance-sheet position) in the determination of a bank's minimum capital
requirements. Those proposals, while still under consideration, would require
banks with interest rate risk in excess of defined thresholds to maintain
additional capital beyond that generally required.
DISTRIBUTIONS
The Corporation'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
5
<PAGE>
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. In addition, from time to time
NationsBank applies for, and may receive, permission from the Comptroller for
one or more of the Banks to declare special dividends. In 1995, the Banks can
initiate dividend payments, without prior regulatory approval, of up to $1.0
billion plus an additional amount equal to their net profits for 1995 up to the
date of any such dividend declaration.
In addition to the foregoing, the ability of NationsBank and the Banks to
pay dividends may be affected by the various minimum capital requirements and
the capital and non-capital standards 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.
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 NationsBank 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 the Corporation's working capital needs,
the funding of investments in, or extensions of credit to, its banking and
nonbanking subsidiaries, possible acquisitions of other financial institutions
or their assets or liabilities, 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 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 nine months ended September 30, 1994 and for each of the years in the
five-year period ended December 31, 1993:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1994 1993 1992 1991 (1) 1990 1989 (2)
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits......................... 1.9 2.3 2.4 1.1 1.3 1.7
Including interest on deposits......................... 1.5 1.5 1.4 1.0 1.1 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.
(2) Includes the interest of the FDIC in the earnings of NationsBank of Texas,
National Association.
6
<PAGE>
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 the 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 calculable from, the
applicable Prospectus Supplement or a pricing supplement thereto. 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 minimum and maximum 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.
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Any series of Debt Securities offered and sold pursuant to this Prospectus
and the applicable Prospectus Supplement 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 any
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.
Any Senior Debt Securities offered hereby are to be issued under an
Indenture dated as of January 1, 1995 (such Indenture, as it may be amended from
time to time, the "Senior Indenture") between the Corporation and BankAmerica
National Trust Company, Trustee (the "Senior Trustee"). Any Subordinated Debt
Securities offered hereby are to be issued under an Indenture dated as of
January 1, 1995 (such Indenture, as it may be amended from time to time, the
"Subordinated Indenture") between the Corporation and The Bank of New York,
Trustee (the "Subordinated Trustee" and, together with the Senior Trustee, the
"Trustees"). A copy of each of the Senior Indenture and the Subordinated
Indenture (each, an "Indenture" and together, the "Indentures") is included as
an exhibit to 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
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Registration Statement of which this Prospectus forms a part, subject to
reduction as the result of the sale by the Corporation of other securities under
the Registration Statement.
The Debt Securities will be direct, unsecured obligations of the
Corporation. The Senior Debt Securities of each series will rank equally with
all unsecured senior debt of the Corporation. The Subordinated Debt Securities
of each series will be subordinate and junior in right of payment to the prior
payment in full of the Senior Indebtedness (as hereinafter defined) of the
Corporation. See "DESCRIPTION OF DEBT SECURITIES -- Subordination."
The Debt Securities may be issued in fully registered form without coupons
("Registered Securities") or in bearer form with or without coupons ("Bearer
Securities"). In addition, all or a portion of the Debt Securities may be issued
in temporary or permanent global form ("Global Securities"). Unless otherwise
specified in an applicable Prospectus Supplement, the Debt Securities will be
only Registered Securities. If any Debt Securities are to be offered as Bearer
Securities, such Bearer Securities, subject to certain exceptions, will not be
offered or sold to persons who are in the United States or to United States
persons. See "DESCRIPTION OF DEBT SECURITIES -- Limitations on Issuance of
Bearer Securities." Debt Securities that are issued in book-entry form will be
issued in global registered form. See "DESCRIPTION OF DEBT
SECURITIES -- Book-Entry Securities." Unless otherwise set forth in the
applicable Prospectus Supplement, the Debt Securities denominated in U.S.
dollars will be issued in denominations of (i) $1,000 or an integral multiple
thereof for Registered Securities and (ii) $5,000 for Bearer Securities.
The Debt Securities may be denominated in U.S. dollars or in another
currency or currency unit. If any of the Debt Securities are denominated in a
foreign currency or currency unit, or if principal of (or premium, if any on) or
any interest on any of the Debt Securities is payable in any foreign currency or
currency unit, the authorized denominations, restrictions, tax consequences,
specific terms and other information with respect to such issue of Debt
Securities and such foreign currency or currency unit will be set forth in the
Prospectus Supplement relating thereto.
The Debt Securities may be issued in one or more series with the same or
various maturities. Certain Debt Securities may be issued which provide for an
amount less than the principal amount thereof to be due and payable in the event
of an acceleration of the maturity thereof (each an "Original Issue Discount
Security"). Original Issue Discount Securities may bear no interest or may bear
interest at a rate which at the time of issuance is below market rates and will
be sold at a discount (which may be substantial) below their stated principal
amount. Certain Original Issue Discount Securities may be issued with original
issue discount for United States Federal income tax purposes. The Prospectus
Supplement with respect to any series of Debt Securities issued with such
original issue discount will contain a discussion of Federal income tax
considerations with respect thereto.
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 designation of the particular series; (2) the
aggregate principal amount of such series which may be authenticated and
delivered under the applicable Indenture; (3) whether Debt Securities of the
series are to be issuable as Registered Securities, Bearer Securities (with or
without coupons) or both, whether any Debt Securities of the series are to be
issuable initially in temporary global form with or without coupons and, if so,
the name of the depositary with respect to any such temporary global Debt
Security, and whether any Debt Securities of the series are to be issuable in
permanent global form with or without coupons and, if so, whether beneficial
owners of interests in any such permanent global Debt Security may exchange such
interests for Debt Securities of such series and of like tenor of any authorized
form and denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided herein, and the name of the
depositary with respect to any such permanent global Debt Security; (4) the date
as of which any Bearer Securities of such series and any temporary Debt Security
in global form representing outstanding Debt Securities of such series shall be
dated, if other than the date of original issuance of the first Debt Securities
of the series to be issued; (5) the person to whom any interest on any
Registered Security of the series shall be payable, if other than the person in
whose name that Debt Security (or one or more predecessor Debt Securities) is
registered at the close of business on the regular record date for such
interest, the manner in which, or the person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon presentation and
surrender of the coupons appertaining thereto as they severally mature, the
extent to which, or the manner in which, any interest
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payable on a temporary global Debt Security on an interest payment date will be
paid if other than in the manner provided herein, 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; (6) the date or dates on which the
principal of the Debt Securities of such series is payable; (7) the rate or
rates, and if applicable the method used to determine the rate, at which the
Debt Securities of such series shall bear interest, if any, the date or dates
from which such interest shall accrue, the date or dates on which such interest
shall be payable and the record date or dates for the interest payable on any
Registered Securities on any interest payment date; (8) the place or places at
which, subject to the provisions of the applicable Indenture, the principal of
(and premium, if any, on) and any interest on Debt Securities of such series
shall be payable, any Registered Securities of the series may be surrendered for
registration of transfer, Debt Securities of the series may be surrendered for
exchange and notices and demands to or upon the Corporation in respect of the
Debt Securities of the series and the Indenture may be served; (9) the
obligation, if any, of the Corporation to redeem or purchase Debt Securities of
such series, at the option of the Corporation or at the option of a holder
thereof, pursuant to any sinking fund or other redemption provisions and the
period or periods within which, the price or prices at which and the terms and
conditions upon which Debt Securities of the series may be so redeemed or
purchased, in whole or in part; (10) if other than denominations of $1,000 and
any integral multiple thereof, the denominations in which any Registered
Securities of such series shall be issuable, and the denomination or
denominations in which any Bearer Securities of the series shall be issuable, if
other than denominations of $5,000; (11) if other than the principal amount
thereof, the portion of the principal amount of Debt Securities of such series
which shall be payable upon declaration of acceleration of the maturity thereof;
(12) the currency, currencies or currency units, in which payment of the
principal of (and premium, if any, on) and any interest on any Debt Securities
of the series shall be payable if other than the currency of the United States
of America and the manner of determining the equivalent thereof in the currency
of the United States of America for purposes of the applicable Indenture; (13)
if the principal of (and premium, if any, on) or any interest on the Debt
Securities of the series are to be payable, at the election of the Corporation
or a holder thereof, in one or more currencies or currency units, other than
that or those in which the Debt Securities are stated to be payable, the
currency or currencies in which payment of the principal of (and premium, if
any, on) and any interest on Debt Securities of such series as to which such
election is made shall be payable, and the periods within which and the terms
and conditions upon which such election is to be made; (14) if the amount of
payments of principal of (and premium, if any, on) or any interest on the Debt
Securities of the series may be determined with reference to an index, the
manner in which such amounts shall be determined; (15) whether the Debt
Securities will be issued in book-entry only form; (16) any interest rate
calculation agents, exchange rate calculation agents or other agents with
respect to Debt Securities of such series; (17) if either or both of Section
14.02 (defeasance) or Section 14.03 (covenant defeasance) of the applicable
Indenture do not apply to the Debt Securities of the series; (18) whether and
under what circumstances the Corporation will pay additional amounts in respect
of any series of Debt Securities and whether the Corporation has the option to
redeem such Debt Securities rather than pay such additional amounts; (19) any
provisions relating to the extension of maturity of, or the renewal of, Debt
Securities of such series, or the conversion of Debt Securities of such series
into other securities of the Corporation; and (20) any other terms of the Debt
Securities of such series (which terms shall not be inconsistent with the
provisions of the applicable Indenture).
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.
EXCHANGE, REGISTRATION AND TRANSFER
At the option of the holder, subject to the terms of the applicable
Indenture, Registered Securities of any series (other than Registered Securities
issued in book-entry form) will be exchangeable for other Registered
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Securities of the same series and of an equal aggregate principal amount and
tenor of any authorized denominations. In addition, if Debt Securities of any
series are issuable as both Registered Securities and Bearer Securities, at the
option of the holder, and subject to the terms of the applicable Indenture,
Bearer Securities (with all unmatured coupons, except as provided below, and
with all matured coupons in default) of such series will be exchangeable for
Registered Securities of the same series and of a like aggregate principal
amount and tenor of any authorized denominations. Bearer Securities with coupons
appertaining thereto surrendered in exchange for Registered Securities on any
record date and before the relevant date for payment of interest shall be
surrendered without the coupon relating to such date for payment of interest,
and interest will not be payable on such date in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the holder of such coupon when due in accordance with the terms of the
applicable Indenture. Unless otherwise provided in an applicable Prospectus
Supplement, Registered Securities, including Registered Securities received in
exchange for Bearer Securities, may not be exchanged by a holder for Bearer
Securities. For a discussion of restrictions on the exchange of any portion of a
temporary global Debt Security for Bearer Securities, see "DESCRIPTION OF DEBT
SECURITIES -- Temporary Global Securities" and " -- Limitations on Issuance of
Bearer Securities."
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent of the Corporation designated
and maintained for such purpose with respect to Debt Securities of a series
pursuant to the terms of the applicable Indenture, as referred to in an
applicable Prospectus Supplement. Such transfer or exchange will be effected
upon the Security Registrar or transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person making the
request. No service charge shall be made for any exchange or registration of
transfer of Debt Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Bearer Securities will be transferable by delivery.
If a Prospectus Supplement refers to any transfer agents (in addition to
the Security Registrar) designated by the Corporation with respect to any series
of Debt Securities, the Corporation may at any time rescind the designation of
any such transfer agent or approve a change in the location through which any
such transfer agent acts, except that if Debt Securities of a series are
issuable solely as Registered Securities, the Corporation will be required to
maintain a transfer agent in each place of payment for such series, and if Debt
Securities of a series are issuable as Bearer Securities, the Corporation will
be required to maintain (in addition to the Security Registrar) a transfer agent
in a place of payment for such series located outside the United States and its
possessions. The Corporation may at any time designate additional transfer
agents with respect to any series of Debt Securities.
The Corporation shall not be required to (i) issue, exchange, or register
the transfer of any Debt Security of any series to be redeemed for a period of
15 days next preceding any selection of such Debt Securities to be redeemed; or
(ii) to exchange or register the transfer of any Registered Security so
selected, called or being called for redemption, except the unredeemed portion
of any Registered Security being redeemed in part; or (iii) exchange any Bearer
Security so selected for redemption, except to exchange such Bearer Security for
a Registered Security of that series and like tenor which is immediately
surrendered for redemption.
For a discussion of restrictions on the exchange, registration and transfer
of Book-Entry Securities, see "DESCRIPTION OF DEBT SECURITIES -- Book-Entry
Securities."
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement,
principal of (and premium, if any, on) and any interest on Registered Securities
will be payable, subject to any applicable laws and regulations, at the offices
of such paying agents as the Corporation may designate from time to time
pursuant to the applicable Indenture, except that, at the option of the
Corporation, payment of any interest may be made by check mailed to the address
of the person entitled thereto as such address shall appear in the Security
Register. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of interest on a Registered Security on any interest payment date
generally will be made to the person in whose name such Registered Security is
registered at the close of business on the regular record date for such interest
payment date.
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Unless otherwise indicated in an applicable Prospectus Supplement,
principal of (and premium, if any, on) and any interest on Bearer Securities
will be payable, subject to any applicable laws and regulations, at the offices
of such paying agents outside the United States and its possessions as the
Corporation may designate from time to time, pursuant to the applicable
Indenture, or, at the option of the Corporation, by check mailed to an address
located, or by transfer to an account maintained by the payee with a financial
institution located, outside the United States and its possessions. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of interest
on a Bearer Security on any interest payment date will be made only against
surrender to the paying agent of the coupon relating to such interest payment
date. No payment with respect to any Bearer Security will be made at any office
or agency of the Corporation in the United States or its possessions or by check
mailed to any address in the United States or its possessions or by transfer to
any account maintained with a financial institution located in the United States
or its possessions. Notwithstanding the foregoing, payments of principal of (and
premium, if any, on) and any interest on Bearer Securities denominated and
payable in U.S. dollars will be made at the office of the Corporation's paying
agent in the Borough of Manhattan, The City of New York (or such other places in
the United States as the Corporation shall designate from time to time), if (but
only if) payment of the full amount thereof in U.S. dollars at all offices or
agencies outside the United States and its possessions is illegal or effectively
precluded by exchange controls or other similar restrictions.
If Debt Securities of a series are issuable solely as Registered
Securities, the Corporation will be required to maintain a paying agent in each
place of payment for such series, and if Debt Securities of a series are
issuable as Bearer Securities, the Corporation will be required to maintain (i)
a paying agent in the Borough of Manhattan, The City of New York (or such other
places in the United States as the Corporation may designate from time to time),
for payments with respect to any Registered Securities of the series (and for
payments with respect to Bearer Securities of the series in the circumstances
described above, but not otherwise) and (ii) a paying agent in a place of
payment located outside the United States and its possessions where Debt
Securities of such series and any coupons relating thereto may be presented and
surrendered for payment; PROVIDED, HOWEVER, that if the Debt Securities of such
series are listed on The International Stock Exchange of the United Kingdom and
the Republic of Ireland, Limited (the "London Stock Exchange"), the Luxembourg
Stock Exchange or any other stock exchange located outside the United States and
its possessions and such stock exchange shall so require, the Corporation will
maintain a paying agent in London, Luxembourg or any other required city located
outside the United States and its possessions, as the case may be, for the Debt
Securities of such series.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of NationsBank of Georgia, National Association, in
Atlanta, Georgia, will be designated as paying agent for the Corporation for
payments with respect to Registered Securities of each series. Subject to the
limitations described above, with respect to Debt Securities of a series
issuable as Bearer Securities, the principal corporate trust offices of the
Senior Trustee in the Borough of Manhattan, The City of New York, will be
designated as paying agent for the Corporation with respect to Senior Debt
Securities of each series, and the principal corporate trust offices of the
Subordinated Trustee in the Borough of Manhattan, The City of New York, will be
designated as paying agent for the Corporation with respect to Subordinated Debt
Securities of each series. Any paying agents outside the United States and its
possessions and any other paying agents in the United States or its possessions
initially designated by the Corporation for the Debt Securities of each series
will be named in an applicable Prospectus Supplement. The Corporation may at any
time designate additional paying agents or rescind the designation of any paying
agent or approve a change in the office through which any paying agent acts.
BOOK-ENTRY SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series issuable as Registered Securities may be
issued in book-entry form represented by one or more global Debt Securities in
registered form ("Book-Entry Global Securities") to be deposited with, or on
behalf of a depositary (a "Book-Entry Depositary") identified in the Prospectus
Supplement relating to such series, for credit to the respective accounts of the
beneficial owners of such Debt Securities (or to such other accounts as they may
direct). The specific terms of the depositary arrangement with respect to any
such series of Debt Securities will be described in the Prospectus Supplement
relating to such series. Unless otherwise specified in the applicable
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Prospectus Supplement, the Corporation anticipates that the following provisions
will apply to all depositary arrangements with a Book-Entry Depositary.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be issued in book-entry form will be represented by a
Book-Entry Global Security registered in the name of the Book-Entry Depositary
or its nominee. Upon the issuance of a Book-Entry Global Security, the
Book-Entry Depositary will credit, on its book-entry registration and transfer
system, the respective principal amounts of the Debt Securities represented by
such Book-Entry Global Security to the accounts of institutions that have
accounts with such depositary or its nominee ("participants"). The accounts to
be credited shall be designated by the underwriters or agents of such Debt
Securities or by the Corporation, if such Debt Securities are offered and sold
directly by the Corporation. Ownership of beneficial interests in such
Book-Entry Global Security will be limited to participants or persons that may
hold interests through participants. Ownership of a beneficial interest in such
a Book-Entry Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Book-Entry
Depositary or its nominee (with respect to participants' interests) for such
Book-Entry Global Security or by participants or persons that hold through
participants. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Book-Entry Global Security.
So long as the Book-Entry Depositary for a Book-Entry Global Security, or
its nominee, is the registered owner of such Book-Entry Global Security, such
depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Debt Securities represented by such Book-Entry Global
Security for all purposes under the Indenture governing such Debt Securities.
Except as set forth below, owners of beneficial interests in such Book-Entry
Global Security will not be entitled to have Debt Securities of the series
represented by such Book-Entry Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt Securities of
such series in definitive form and will not be considered the owners or holders
thereof under the Indenture. Accordingly, each person owning a beneficial
interest in a Book-Entry Global Security must rely on the procedures of the
Book-Entry Depositary and, if such person is not a participant, on the
procedures of the participant and, if applicable, the indirect participant,
through which such person owns its interest, to exercise any rights of a holder
under the Indenture.
Payment of principal of (and premium, if any on) and any interest on Debt
Securities registered in the name of or held by a Book-Entry Depositary or its
nominee will be made to the Book-Entry Depositary or its nominee, as the case
may be, as the registered owner or the holder of the Book-Entry Global Security
representing such Debt Securities. None of the Corporation, the Trustee, any
paying agent, any authenticating agent or the Security Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Book-Entry Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Corporation expects that the Book-Entry Depositary for Debt Securities
of a series, upon receipt of any payment of principal of (and premium, if any
on) or interest on the Debt Securities represented by such Book-Entry Global
Security, will credit immediately participants' accounts with payments in
amounts proportionate to their respective holdings in principal amount of
beneficial interest in such Book-Entry Global Security as shown on the records
of such Book-Entry Depositary. The Corporation also expects that payments by
participants to owners of beneficial interests in such Book-Entry Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such participants.
Unless and until it is exchanged in whole for one or more Debt Securities
in definitive form, a Book-Entry Global Security may not be transferred except
as a whole by the Book-Entry Depositary for such Book-Entry Global Security to a
nominee of such depositary or by a nominee of such depositary to such depositary
or another nominee of such depositary or by such depositary or any such nominee
to a successor of such depositary or a nominee of such successor. If a
Book-Entry Depositary for Debt Securities in registered form is at any time
unwilling or unable to continue as depositary and a successor depositary is not
appointed by the Corporation within 90 days, the Corporation will issue Debt
Securities in definitive registered form in exchange for the
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Book-Entry Global Security or Book-Entry Global Securities representing all such
Debt Securities. In addition, the Corporation may at any time and in its sole
discretion determine not to have any Debt Securities represented by a Book-Entry
Global Security and, in such event, will issue such Debt Securities in
definitive registered form in exchange for the Book-Entry Global Security or
Book-Entry Global Securities representing all such Debt Securities. In any such
instance, an owner of a beneficial interest in a Book-Entry Global Security will
be entitled to physical delivery in definitive form of Debt Securities of the
series represented by such Book-Entry Global Security equal in principal amount
to such beneficial interest and to have such Debt Securities registered in the
name of the owner of such beneficial interest.
TEMPORARY GLOBAL SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of Debt Securities of a series that are issuable as Bearer Securities initially
will be represented by one or more Debt Securities in temporary global form,
with one or more coupons or without coupons, to be deposited with a common
depositary in London for Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System ("Euroclear"), and CEDEL, S.A.
("CEDEL"), for credit to the respective designated accounts for beneficial
owners. On and after the date determined as provided in any such temporary
global Debt Security and described in an applicable Prospectus Supplement (the
"Exchange Date"), each such temporary global Debt Security will be exchanged for
definitive Debt Securities, in bearer form, registered form, permanent global
bearer form or permanent global registered form, or any combination thereof, as
specified in an applicable Prospectus Supplement. Unless otherwise specified in
such temporary global Debt Security, no Bearer Security (including a Debt
Security in permanent global bearer form) delivered in exchange for any portion
of a temporary global Debt Security shall be delivered to any location in the
United States or its possessions in connection with such exchange. See
"DESCRIPTION OF DEBT SECURITIES -- Limitations on Issuance of Bearer
Securities."
Unless otherwise specified in an applicable Prospectus Supplement,
definitive Debt Securities in respect of any portion of a temporary global Debt
Security will only be delivered, and interest in respect of any portion of a
temporary global Debt Security payable in respect of an interest payment date
occurring prior to the issuance of definitive Debt Securities will only be paid,
upon delivery of a certificate signed by Euroclear or CEDEL, as the case may be,
with respect to the portion of the temporary global Debt Security held for its
account in the form required by the Indenture. Such certificate must be dated no
earlier than the Exchange Date or such interest payment date, as the case may
be, and must be based on statements provided to Euroclear or CEDEL, as
applicable, by its account holders who are beneficial owners of interests in
such temporary global Debt Security to the effect that such portion is
beneficially owned by (i) a person that is not a United States person, (ii) a
United States person that is (A) the foreign branch of a United States financial
institution purchasing for its own account or for resale or (B) a United States
person who acquired its interest through the foreign branch of a United States
financial institution and who holds such interest through such financial
institution, provided that in either case (A) or (B) the United States financial
institution agrees to comply with the requirements of Section 165(j)(3)(A), (B)
or (C) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder (the "Treasury Regulations") or (iii) a financial
institution holding for purposes of resale during the restricted period (as such
period is defined in applicable Treasury Regulations and hereinafter described
in "DESCRIPTION OF DEBT SECURITIES -- Limitations on Issuance of Bearer
Securities"). In addition, if the beneficial owner is a financial institution
described in clause (iii) of the preceding sentence (whether or not also
described in clause (i) or (ii)), such financial institution must also have
included in its statement a certification that it has not acquired its interest
for purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions. It is expected that each of
Euroclear and CEDEL will in such circumstances credit the interest received by
it in respect of such temporary global Debt Security to the accounts of the
beneficial owners thereof (or to such other accounts as they may direct). Unless
otherwise specified in an applicable Prospectus Supplement, interest will not be
payable on any temporary global Debt Security in respect of any interest payment
date occurring after the applicable Exchange Date.
PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent global form,
the applicable Prospectus Supplement will describe the circumstances, if any,
under which beneficial owners of interests in any such permanent global Debt
Security may exchange such interests for definitive Debt Securities of such
series and of like tenor
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<PAGE>
and principal amount in any authorized form and denomination. No Bearer Security
delivered in exchange for any portion of a permanent global Debt Security shall
be mailed or otherwise delivered to any location in the United States or its
possessions in connection with such exchange. Principal of (and premium, if any,
on) and any interest on any permanent global Debt Security will be payable in
the manner described in the applicable Prospectus Supplement. A person having a
beneficial interest in a permanent global Debt Security, except with respect to
payment of principal of (and premium, if any, on) and any interest on such
permanent global Debt Security, will be treated as a holder of such principal
amount of Debt Securities outstanding represented by such permanent global Debt
Security as shall be specified in a written statement of the holder of such
permanent global Debt Security or, in the case of a permanent global Debt
Security in bearer form, of Euroclear or CEDEL, which is produced to the Trustee
by such person.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States Federal tax laws and regulations, Bearer
Securities may not be offered or sold during the restricted period (as defined
below) in the United States or its possessions or to a United States person
(each as defined below) other than an exempt purchaser (as defined below).
Furthermore, in compliance with such Federal tax laws and regulations, Bearer
Securities may not be delivered, in connection with the sale thereof during the
restricted period, in definitive form within the United States or its
possessions, and interest on Bearer Securities will generally be payable only
outside of the United States and its possessions.
The Corporation will not offer or sell the Bearer Securities during the
restricted period to a person who is within the United States or its possessions
or to a United States person other than an exempt purchaser, and any
underwriter, agent and dealer participating in the offering of Bearer Securities
must covenant that: (i) it has not and will not offer or sell the Bearer
Securities during the restricted period to a person who is within the United
States or its possessions or to a United States person other than an exempt
purchaser; (ii) it has in effect, in connection with the offer and sale of the
Bearer Securities during the restricted period, procedures reasonably designed
to ensure that its employees or agents who are directly engaged in selling the
Bearer Securities are aware that the Bearer Securities cannot be offered or sold
during the restricted period to a person who is within the United States or its
possessions or who is a United States person (other than an exempt purchaser);
(iii) it will not permit any affiliate (within the meaning of Section
1.163-5(c)(2)(i)(D)(4)(iii) of the Treasury Regulations) to acquire any Bearer
Securities for the purpose of offering or selling it during the restricted
period unless such affiliate provides it (for the benefit of the Corporation)
with the covenants contained in this paragraph; (iv) it will not deliver any
Bearer Securities in connection with the sale thereof during the restricted
period, in definitive form within the United States or its possessions; (v) it
will not enter into any written contract with another distributor (within the
meaning of Section 1.163-5(c)(2)(i)(D)(4) of the Treasury Regulations) to offer
or sell the Bearer Securities during the restricted period unless such
distributor provides it (for the benefit of the Corporation) with the covenants
contained in this paragraph; and (vi) if it is a United States person, it is
acquiring the Bearer Securities for purposes of resale in connection with their
original issuance and if it retains the Bearer Securities for its own account,
it will only do so in accordance with the requirements of Section
1.163-5(c)(2)(i)(D)(6) of the Treasury Regulations.
For purposes of the selling restrictions described in this section, an
offer or sale will be considered to be made to a person who is within the United
States or its possessions if the offeror or seller of the Bearer Securities has
an address within the United States or its possessions for the offeree or buyer
of the Bearer Securities with respect to the offer or sale. Bearer Securities
and any coupons appertaining thereto (including Bearer Securities in permanent
global form exchangeable for definitive Bearer Securities) will bear a legend to
the following effect: "Any United States person who holds this obligation will
be subject to limitations under the United States income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue
Code."
Under Sections 165(j) and 1287(a) of the Code, a holder that is a United
States person generally will not be entitled to deduct any loss on Bearer
Securities (including for purposes of this paragraph Bearer Securities in global
form exchangeable for definitive Bearer Securities) or coupons (other than
Bearer Securities or coupons having a maturity of one year or less from their
dates of issuance) and must treat as ordinary income any gain realized on the
sale or other disposition (including a retirement of the Bearer Security) of
Bearer Securities or coupons (other than Bearer Securities or coupons having a
maturity of one year or less from their date of issue).
15
<PAGE>
As used herein, "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States and an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source; "United States" means the United States of America (including the States
and the District of Columbia) and "possessions" of the United States include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
Northern Mariana Islands; "restricted period" means, with respect to a Bearer
Security, the period beginning on the earlier of the closing date or the first
date on which the Bearer Security is offered to persons other than distributors
and ending on the expiration of the 40-day period beginning on the closing date,
except that, notwithstanding the foregoing, any offer or sale of the Bearer
Securities by the Corporation or a distributor shall be deemed to be made during
the restricted period if the Corporation or the distributor holds the Bearer
Security as part of an unsold allotment or subscription; and "exempt purchaser"
means (A) an exempt distributor (as defined in Section 1.163-5(c)(2)(i)(D)(7) of
the Treasury Regulations) that covenants that it is buying the Bearer Securities
for the purpose of resale in connection with the original issuance thereof, and
that if it retains the Bearer Securities for its own account, it will do so only
in accordance with the requirements of Section 1.163-5(c)(2)(i)(D)(6) of the
Treasury Regulations, (B) an international organization described in Section
7701(a)(18) of the Code, (C) a foreign central bank (as defined in Section 895
of the Code and the Treasury Regulations thereunder), (D) a foreign branch of
the United States financial institution as described in Section
1.163-5(c)(2)(i)(D)(6)(i) of the Treasury Regulations, and (E) a United States
person who acquires the Bearer Securities through the foreign branch of a United
States financial institution and who holds the Bearer Securities through such
financial institution. Notwithstanding the foregoing, however, (i) a person
described in (A) of this paragraph will not be considered an exempt purchaser
with respect to offers to a non-United States office of such person; (ii) a
person described in (B) or (C) of this paragraph will not be considered an
international organization or a foreign central bank, as the case may be, with
respect to offers that are not made directly and specifically to such person;
(iii) a person described in (E) of this paragraph will be considered an exempt
purchaser only with respect to sales of the Bearer Securities; and (iv) in the
case of persons described in (D) or (E) of this paragraph, the financial
institution holding the Bearer Securities must provide a certificate to the
Corporation or the distributor selling the Bearer Securities stating that it
agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Code and the Treasury Regulations thereunder.
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
16
<PAGE>
upon any dissolution or winding up or total or partial liquidation or
reorganization of the Corporation, all principal of (and premium, if any on) 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 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% of each class of
the capital stock of such Principal Subsidiary Bank (or any successor
corporation thereto); (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,
17
<PAGE>
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.
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% 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 or coupons, if any, thereunder, with the consent of the holders of
not less than 66 2/3% 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
the fixed maturity of, reduce the principal amount or redemption premium, if
any, of, or reduce the rate of or extend 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.
Each Indenture provides that in determining whether the holders of the
requisite principal amount of the Debt Securities outstanding have given any
request, demand, authorization, direction, notice, consent or waiver thereunder,
(i) the principal amount of an Original Issue Discount Security that shall be
deemed to be outstanding shall be the amount of the principal thereof that would
be due and payable upon an event of default, and (ii) the principal amount of a
Debt Security denominated in a foreign currency or currency unit shall be the
U.S. dollar equivalent, determined on the date of original issuance of such Debt
Security.
MEETINGS AND ACTION BY SECURITYHOLDERS
Each Indenture contains provisions for convening meetings of the holders of
Debt Securities for certain purposes. A meeting may be called at any time by the
Trustee in its discretion and shall be called by the Trustee upon request by the
Corporation or the holders of at least 10% in aggregate principal amount of the
Debt Securities outstanding of such series, in any case upon notice given in
accordance with "Notices" below. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance with
the applicable Indenture, or such other action taken in accordance with the
terms of the applicable Indenture, will be binding on all holders of Debt
Securities of that series and the related coupons.
DEFAULTS AND RIGHTS OF ACCELERATION
An Event of Default is defined in the Subordinated Indenture generally as
bankruptcy of the Corporation under Federal bankruptcy laws. An Event of Default
is defined in the Senior Indenture generally as (i) the Corporation's failure to
pay principal (or premium, if any) when due on any securities of a series, (ii)
the Corporation's failure to pay interest on any securities of a series, within
30 days after the same becomes due, (iii) the Corporation's breach of any 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
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<PAGE>
least 25% 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% in principal amount, or, if any such Debt Securities are Original Issue
Discount Debt Securities, such lesser amounts as may be described in an
applicable Prospectus Supplement, 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 and,
in the case of any Bearer Securities, the coupons, if any, appertaining thereto,
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 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.
NOTICES
Except as otherwise provided in the applicable indenture, notices to
holders of Bearer Securities will be given by publication at least twice in a
newspaper of general circulation, and customarily published at least once a day
for at least five days in each calendar week, in such city or cities as may be
specified in such Debt Securities. Notices to holders of Registered Securities
will be given by first-class mail to the addresses of such holders as they
appear in the Security Register.
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. Each of the Trustees also serves as trustee for certain
series of the Corporation's outstanding indebtedness under other indentures.
19
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LEGAL OPINIONS
The legality of the Debt Securities will be passed upon for the Corporation
by Smith Helms Mulliss & Moore, L.L.P., Charlotte, North Carolina, and for the
underwriters or agents by Stroock & Stroock & Lavan, New York, New York. As of
the date of this Prospectus, certain members of Smith Helms Mulliss & Moore,
L.L.P. beneficially own 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 the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1993, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
20
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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 UNDERWRITERS.
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 the Notes....................... S-2
Capitalization................................. S-4
Ratios of Earnings to Fixed Charges............ S-5
Selected Financial Data........................ S-6
Settlement and Registration.................... S-7
Underwriting................................... S-9
PROSPECTUS
Incorporation of Certain Documents by
Reference.................................... 2
Available Information.......................... 2
NationsBank Corporation........................ 3
Supervision and Regulation..................... 4
Use of Proceeds................................ 6
Ratios of Earnings to Fixed Charges............ 6
Plan of Distribution........................... 7
Description of Debt Securities................. 8
Legal Opinions................................. 20
Experts........................................ 20
</TABLE>
$300,000,000
NATIONSBANK
FLOATING RATE SENIOR NOTES,
DUE 1998
PROSPECTUS SUPPLEMENT
NATIONSBANC CAPITAL MARKETS, INC.
BEAR, STEARNS & CO. INC.
CS FIRST BOSTON
J.P. MORGAN SECURITIES INC.
MARCH 20, 1995
