<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 10, 1996
REGISTRATION NO. 333-13811
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
(NationsBank Logo Goes Here) CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
NORTH CAROLINA
(State or other jurisdiction of incorporation or 56-0906609
organization) (I.R.S. Employer Identification No.)
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NATIONSBANK CORPORATE CENTER, CHARLOTTE, NORTH CAROLINA 28255 (704) 386-5000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
PAUL J. POLKING
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
(704) 386-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
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<S> <C>
BOYD C. CAMPBELL, JR. JAMES R. TANENBAUM
SMITH HELMS MULLISS & MOORE, L.L.P. STROOCK & STROOCK & LAVAN
214 NORTH CHURCH STREET SEVEN HANOVER SQUARE
CHARLOTTE, NORTH CAROLINA 28202 NEW YORK, NEW YORK 10004
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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
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EXPLANATORY NOTES
This Registration Statement contains two forms of Prospectus of NationsBank
Corporation ("NationsBank"): one (the "Debt Prospectus") to be used in
connection with the offering and sale of Debt Securities, including any
Preferred Stock, Depositary Shares, Common Stock or Debt Securities into which
the Debt Securities may be convertible, and one (the "Equity Prospectus") to be
used in connection with the offering and sale of Preferred Stock, Depositary
Shares or Common Stock, including any such shares into which the Preferred Stock
or Depositary Shares may be convertible. Each offering made under this
Registration Statement will be made pursuant to one of these Prospectuses, with
the specific terms of the securities offered thereby being set forth in an
accompanying Prospectus Supplement.
The Debt Prospectus also includes a form of a market maker prospectus
intended for use by NationsBanc Capital Markets, Inc. ("NCMI"), a direct
wholly-owned subsidiary of NationsBank, in connection with offers and sales
related to secondary market transactions in the Debt Securities. The Debt
Prospectus follows immediately after this page of Explanatory Notes. Following
such Debt Prospectus are the alternate cover page, pages 6 through 17 and the
back cover page of the market maker Debt Prospectus. All other pages of the Debt
Prospectus are also to be used for the market maker Debt Prospectus.
The Equity Prospectus also includes a form of a market maker prospectus
intended for use by NCMI in connection with offers and sales related to
secondary market transactions in the Preferred Stock, Depositary Shares or
Common Stock. The Equity Prospectus follows immediately after the alternate
pages of the Debt Prospectus. Following such Equity Prospectus are the alternate
cover page, pages 6 through 13 and the back cover page of the market maker
Equity Prospectus. All other pages of the Equity Prospectus are also to be used
for the market maker Equity Prospectus.
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 10, 1996
[DEBT]
PROSPECTUS
(NationsBank Logo Goes Here)
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 or at the Corporation's discretion.
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 any 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 (in the event that such series is convertible at
the option of the holder or NationsBank into Preferred Stock, Depositary Shares,
Common Stock or other Debt Securities), the form of such series, 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 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 or pricing 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, 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.
The date of this Prospectus is , 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
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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, 1995 as filed March 29, 1996;
(b) The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 as filed May 10, 1996, June 30, 1996 as filed August
14, 1996, and September 30, 1996 as filed November 13, 1996;
(c) The Corporation's Current Reports on Form 8-K filed January 12,
1996, February 1, 1996, March 8, 1996, April 17, 1996, May 16, 1996, July
5, 1996, July 31, 1996, September 6, 1996 (as amended by Form 8-K/A-1 filed
September 11, 1996 and Form 8-K/A-2 filed November 13, 1996), September 20,
1996 (as amended by Form 8-K/A filed September 23, 1996), October 25, 1996,
November 14, 1996 and December 4, 1996; and
(d) The description of the Corporation's Common Stock contained in its
registration statement filed pursuant to Section 12 of the 1934 Act, as
modified by 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, Suite 1300, 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. The Commission
maintains an Internet web site that contains reports, proxy and information
statements and other information regarding issuers who file electronically with
the Commission. The address of that site is http://www.sec.gov. 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
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NATIONSBANK CORPORATION
GENERAL
NationsBank is a multi-bank holding company established as a North Carolina
corporation in 1968 and is registered under the Bank Holding Company Act of
1956, as amended (the "BHCA"), with its principal assets being the stock of its
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 in Charlotte, North Carolina 28255. Its telephone number is
(704) 386-5000.
OPERATIONS
NationsBank provides a diversified range of banking and certain nonbanking
financial services and products through its various subsidiaries. NationsBank
manages its business activities through three major business units: the General
Bank, Global Finance and Financial Services.
The General Bank provides comprehensive services in the commercial and
retail banking fields, including the origination and servicing of home mortgage
loans, the issuance and servicing of credit cards (through a Delaware
subsidiary), indirect lending, dealer finance and certain insurance services.
The General Bank also provides retirement services for defined benefit and
defined contribution plans, full service and discount brokerage services,
investment advisory services, including the Nations Fund family of mutual funds,
as well as private banking and investment management services through
subsidiaries of NationsBank. As of September 30, 1996, the General Bank operated
1,980 banking offices through the following Banks: NationsBank, N.A. (serving
the states of North Carolina, South Carolina, Maryland and Virginia and the
District of Columbia); NationsBank, N.A. (South) (serving the states of Florida
and Georgia); NationsBank of Kentucky, N.A.; NationsBank of Tennessee, N.A.;
NationsBank of Texas, N.A.; and Sun World, N.A. (serving the state of Texas).
The General Bank also provides fully automated, 24-hour cash dispensing and
depositing services throughout the states in which it is located, through 3,609
automated teller machines.
Global Finance provides comprehensive corporate and investment banking as
well as trading and distribution services to domestic and international
customers. The group serves as a principal lender and investor, as well as an
advisor, arranger and underwriter, and manages treasury and trade transactions
for clients and customers. Loan origination and syndication, asset-backed
lending, leasing, factoring, project finance and mergers and acquisitions are
representative of the services provided by the group. Global Finance also
underwrites, trades and distributes 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")), and trades and distributes a wide range of derivative products
in certain interest rate, foreign exchange, commodity and equity markets. Global
Finance provides its services through various offices located in major United
States cities as well as in London, Frankfurt, Singapore, Bogota, Mexico City,
Grand Cayman, Nassau, Seoul, Tokyo, Osaka, Taipei and Hong Kong.
Financial Services includes NationsCredit Consumer Corporation, primarily a
consumer finance subsidiary, and NationsCredit Commercial Corporation, primarily
a commercial finance subsidiary. NationsCredit Consumer Corporation, which has
approximately 331 offices located in 36 states, provides personal, mortgage and
automobile loans to consumers and retail finance programs to dealers.
NationsCredit Commercial Corporation consists of seven divisions that specialize
in one or more of the following areas: equipment loans and leasing; loans for
debt restructuring, mergers and acquisitions and working capital; real estate,
golf/recreational and health care financing; and inventory financing to
manufacturers, distributors and dealers.
As part of its operations, NationsBank 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
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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
Federal Deposit Insurance Corporation (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 Corporation's
operations, management and 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
became able to acquire banks in states other than its home state beginning
September 29, 1995, without regard to the permissibility of such acquisition
under state law, but subject to any state requirement that the bank has been
organized and operating for a minimum period of time, not to exceed five years,
and the requirement that the bank holding company, prior to or following the
proposed acquisition, controls no more than 10% of the total amount of deposits
of insured depository institutions in the United States and no more than 30% of
such deposits in that state (or such lesser or greater amount set by state law).
The Interstate Banking and Branching Act also authorizes banks to merge
across state lines, therefore 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. Of
those states in which the Banks are located, Delaware, Maryland, North Carolina
and Virginia have enacted legislation to "opt in," thereby permitting interstate
branching prior to June 1, 1997, and Texas has adopted legislation to "opt out"
of the interstate branching provisions (which Texas law currently expires on
September 2, 1999).
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.
CAPITAL AND OPERATIONAL REQUIREMENTS. The Federal Reserve Board, the
Comptroller and the FDIC have issued substantially similar risk-based and
leverage capital guidelines applicable to United States banking organizations.
In addition, those regulatory agencies may from time to time require that a
banking organization maintain capital above the minimum levels, whether because
of its financial condition or actual or anticipated growth.
The Federal Reserve Board risk-based guidelines define a two-tier capital
framework. Tier 1 capital consists of common and qualifying preferred
shareholders' equity, less certain intangibles and other adjustments.
4
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Tier 2 capital consists of subordinated and other qualifying debt, and the
allowance for credit losses up to 1.25% 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% 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% and the minimum total capital ratio is 8%.
The Corporation's Tier 1 and total risk-based capital ratios under these
guidelines at September 30, 1996 were 7.05% and 12.05%, respectively.
The leverage ratio is determined by dividing Tier 1 capital by adjusted
average total assets. Although the stated minimum ratio is 3%, most banking
organizations are required to maintain ratios of at least 100 to 200 basis
points above 3%. The Corporation's leverage ratio at September 30, 1996 was
6.30%. 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, FDICIA requires the
various regulatory agencies to prescribe 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%, a total capital ratio of at least
10% and a leverage ratio of at least 5% and not be subject to a capital
directive order. An "adequately capitalized" institution must have a Tier 1
capital ratio of at least 4%, a total capital ratio of at least 8% and a
leverage ratio of at least 4%, or 3% in some cases. Under these guidelines, as
of September 30, 1996, each of the Banks was considered 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. This
evaluation will be made as a part of the institution's regular safety and
soundness examination. Banking agencies also have recently adopted final
regulations requiring regulators to consider 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
evaluation of a bank's capital adequacy. Concurrently, banking agencies have
proposed a methodology for evaluating interest rate risk. After gaining
experience with the proposed measurement process, these banking agencies intend
to propose further regulations to establish an explicit risk-based capital
charge for interest rate risk.
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
from the Banks. 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. As of January 1, 1996, the Banks can
initiate dividend payments without prior regulatory approval of up
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to $905 million plus an additional amount equal to their net profits for 1996 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 Banks 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 Corporation's consolidated ratios of earnings to
fixed charges for the nine months ended September 30, 1996 and for each of the
years in the five-year period ended December 31, 1995:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits...................................... 1.8 1.7 1.9 2.3 2.4 1.1
Including interest on deposits...................................... 1.5 1.4 1.5 1.5 1.4 1.0
</TABLE>
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
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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 also 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.
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.
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The participation of an affiliate or subsidiary of NationsBank in the offer
and sale of the Debt Securities will comply with the requirements of Section
2720 of the Conduct Rules 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 may also 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 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 First Trust of
New York, National Association, as successor Trustee to BankAmerica National
Trust Company (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"). Each of the
Senior Indenture and the Subordinated Indenture (each, an "Indenture" and
together, the "Indentures") is incorporated by reference in the Registration
Statement of which this Prospectus forms a part.
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to and qualified in their entirety by
reference to the provisions of the applicable Indentures. Whenever particular
sections or defined terms of the Indentures are referred to, it is intended that
such sections or defined items shall be incorporated herein by reference. Unless
otherwise indicated, capitalized terms shall have the meanings ascribed to them
in the Indentures.
GENERAL
The respective Indentures provide that there is no limitation on the amount
of debt securities that may be issued thereunder from time to time. The amount
of Debt Securities that may be offered and sold pursuant to this Prospectus,
however, is limited to the aggregate initial offering price of the securities
registered under the Registration Statement of which this Prospectus forms a
part, subject to reduction as the result of the sale 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 all Senior Indebtedness (as hereinafter defined) of the
Corporation. See "DESCRIPTION OF DEBT SECURITIES -- Subordination."
The Debt Securities will be issued in fully registered form without
coupons. The Debt Securities may be denominated in U.S. dollars or in another
currency or currency unit. Unless otherwise set forth in the applicable
Prospectus Supplement, any Debt Securities that are denominated in U.S. dollars
will be issued in denominations of $1,000 or an integral multiple thereof. 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, as well as any investment considerations,
restrictions, tax consequences, specific terms and other information with
respect to such
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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 Debt Securities may be deemed to 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 relating to such Debt
Securities, including: (1) the designation of the particular series; (2) the
aggregate principal amount of such series that may be authenticated and
delivered under the applicable Indenture; (3) the person to whom any interest on
any Debt Security of the series shall be payable, if other than the person in
whose name the Debt Security (or one or more predecessor Debt Securities) is
registered at the close of business on the regular record date for such
interest; (4) the date or dates on which the principal of the Debt Securities of
such series is payable; (5) 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 Debt Securities on any interest payment
date; (6) 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 Debt Securities
of the series may be surrendered for registration of transfer, and notices and
demands to or upon the Corporation in respect of the Debt Securities of the
series and the Indenture may be served; (7) 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; (8) if other
than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Debt Securities of such series shall be issuable; (9)
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; (10) 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; (11) if the principal of (and premium, if any, on)
or any interest on the Debt Securities of the series is 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; (12) 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; (13) whether the Debt
Securities will be issued in book-entry only form; (14) the identification or
method of selection of any interest rate calculation agents, exchange rate
calculation agents or other agents with respect to Debt Securities of such
series; (15) 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; (16) any provisions relating to the extension of
maturity of, or the renewal of, Debt Securities of such series; and (17) 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, on) and any 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
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regulatory requirements and capital guidelines. See "NATIONSBANK
CORPORATION -- 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.
CONVERSION
The Debt Securities of any series may be convertible, at the option of the
holder or the Corporation, into Preferred Stock, Depositary Shares, Common Stock
or other Debt Securities if the Prospectus Supplement relating to such series of
Debt Securities so provides. In such case, such Prospectus Supplement will set
forth (i) the period(s) during which such conversion may be elected; (ii) the
conversion price payable and the number of shares or amount of Preferred Stock,
Depositary Shares, Common Stock or other Debt Securities purchaseable upon
conversion, and adjustments thereto, if any, in certain events; (iii) the
procedures for electing such conversion; and (iv) all other terms for such
conversion (which terms shall not be inconsistent with the provisions of the
applicable Indenture).
EXCHANGE, REGISTRATION AND TRANSFER
At the option of the holder, subject to the terms of the applicable
Indenture, Debt Securities of any series (other than Debt Securities issued in
book-entry form) will be exchangeable for other Debt Securities of the same
series and of an equal aggregate principal amount and tenor of any authorized
denominations.
Debt Securities of a series may be presented for exchange as provided
above, and 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 such Debt Securities 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.
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 the Corporation will be required to
maintain a transfer agent in each place of payment for such series. 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) exchange or register the transfer of any Debt Security so selected, called
or being called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part.
For a discussion of restrictions on the exchange, registration and transfer
of Global Securities (hereinafter defined), see "REGISTRATION AND SETTLEMENT."
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement,
principal of (and premium, if any, on) and any interest on Debt 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 Debt Security on any
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interest payment date generally will be made to the person in whose name such
Debt Security is registered at the close of business on the regular record date
for such interest payment date. For a discussion of payment of principal and any
premium or interest with respect to Global Securities, see "REGISTRATION AND
SETTLEMENT."
The Corporation initially has designated the principal corporate trust
offices of the Senior Trustee and the Subordinated Trustee in the City of New
York as the places where the Senior Debt Securities and Subordinated Debt
Securities, respectively, may be presented for payment. 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. Any other paying agents designated by the Corporation for the Debt
Securities of each series will be named in an applicable Prospectus Supplement.
SUBORDINATION
The Subordinated Debt Securities are subordinate and subject, to the extent
and in the manner set forth in the Subordinated Indenture, in right of payment
to the prior payment in full of all Senior Indebtedness of the Corporation.
"Senior Indebtedness" is defined by the Subordinated Indenture as any
indebtedness for money borrowed (including all indebtedness of the Corporation
for borrowed and purchased money of the Corporation, all obligations of the
Corporation arising from off-balance sheet guarantees by the Corporation and
direct credit substitutes, and obligations of the Corporation associated with
derivative products such as interest and foreign exchange rate contracts and
commodity contracts) that is outstanding on the date of execution of the
Subordinated Indenture, or is thereafter created, incurred or assumed, for the
payment of which the Corporation is at the time of determination responsible or
liable as obligor, guarantor or otherwise, and all deferrals, renewals,
extensions and refundings of any such indebtedness or obligations, other than
the Subordinated Debt Securities or any other indebtedness as to which, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such indebtedness is subordinate in right of
payment to any other indebtedness of the Corporation. The Prospectus Supplement
relating to each series of Subordinated Debt Securities will set forth the
aggregate amount of then outstanding Senior Indebtedness of the Corporation and
any limitation on the issuance of additional Senior Indebtedness.
No payment on account of principal of (and premium, if any, on) or any
interest 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% in principal amount of any kind or
category of any Senior Indebtedness (or the representative or representatives of
such holders) or the Subordinated Trustee shall have received written notice
thereof from the Corporation.
In the event that any Subordinated Debt Security is declared due and
payable before the date specified therein as the fixed date on which the
principal thereof is due and payable pursuant to the Subordinated Indenture, or
upon any payment or distribution of assets of the Corporation of any kind or
character to creditors upon any dissolution or winding up or total or partial
liquidation or reorganization of the Corporation, all principal of (and premium,
if any, on) and any 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
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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, 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 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).
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MODIFICATION OF THE INDENTURES
Each Indenture contains provisions permitting the Corporation and the
applicable Trustee to modify such Indenture or the rights of the holders of Debt
Securities thereunder, with the consent of the holders of not less than 66 2/3%
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 at such time 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 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.
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 to the Corporation
by the Senior Trustee, or to the Corporation and the Senior Trustee by the
holders of at least 25% in principal amount of all 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).
13
<PAGE>
COLLECTION OF INDEBTEDNESS, ETC.
Each Indenture also provides that in the event of a failure by the
Corporation to make payment of principal of (and premium, if any, on) or any
interest on the Debt Securities (and, in the case of payment of interest, such
failure to pay shall have continued for 30 days) and upon the demand of the
respective Trustee, the Corporation will pay to such Trustee, for the benefit of
the holders of the Debt Securities, the amount then due and payable on the Debt
Securities for principal and interest, with interest on the overdue principal
and, to the extent payment of interest shall be legally enforceable, upon
overdue installments of interest at the rate borne by the Debt Securities. Each
Indenture further provides that if the Corporation fails to pay such amount
forthwith upon such demand, the respective Trustee may, among other things,
institute a judicial proceeding for the collection thereof. However, each
Indenture provides that notwithstanding any other provision of the Indenture,
the holder of any Debt Security shall have the right to institute suit for the
enforcement of any payment of principal of (and premium, if any, on) and any
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 Debt 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
First Trust of New York, National Association, 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.
REGISTRATION AND SETTLEMENT
DTC
If so specified in an applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series may be issued in book-entry form represented
by one or more global Debt Securities in registered form (each, a "Global
Security"). Unless otherwise specified in such Prospectus Supplement, each such
Global Security will be held through The Depository Trust Company ("DTC"), as
depositary, and will be registered in the name of Cede & Co., as nominee of DTC.
Accordingly, Cede & Co. is expected to be the holder of record of the Debt
Securities.
Under the book-entry system of DTC, purchases of Debt Securities of a
series represented by a Global Security must be made by or through persons that
have accounts with DTC ("DTC Participants") or persons that may hold interests
through DTC Participants ("Indirect Participants"). Upon the issuance and
deposit of a Global Security, DTC will credit, on its book-entry registration
and transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of DTC
Participants. The accounts to be credited will 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). The ownership of
beneficial interests in such Global Security will be shown on, and the transfer
of that ownership will be effected only through, records maintained by DTC (with
respect to interests of DTC Participants) and the records of DTC Participants
(with respect to interests of Indirect Participants) and Indirect Participants.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in certificated form. Such limits and
laws may impair the ability to own, transfer or pledge beneficial interests in a
Global Security.
14
<PAGE>
So long as DTC or its nominee is the registered holder of a Global
Security, DTC or its nominee, as applicable, will be considered the sole owner
or holder of the Debt Securities represented by such Global Security for all
purposes under the applicable Indenture. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities registered in their names, will not receive or be entitled to receive
physical delivery of such Debt Securities in certificated form and will not be
considered the owners or holders thereof under the applicable Indenture.
Accordingly, in order to exercise any rights of a holder of the Debt Securities
under the applicable Indenture, each person owning a beneficial interest in the
Global Security representing such Debt Securities must rely on the procedures of
DTC or, if such person is not a DTC Participant, on the procedures of the DTC
Participant and, if applicable, the Indirect Participant, through which such
person owns its interest.
So long as DTC or its nominee is the registered holder of a Global
Security, Debt Securities of the series represented by such Global Security will
trade in DTC's Same Day Fund Settlement System, and secondary market trading
activity in such Debt Securities 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 such Debt
Securities.
Except as otherwise provided herein, DTC or its nominee, as applicable, as
the registered holder of a Global Security shall be the only person entitled to
receive payments from the Corporation with respect to Debt Securities of the
series represented by such Global Security. Accordingly, payments of principal
of (and premium, if any, on) and any interest on individual Debt Securities of
the series represented by such a Global Security will be made by the Corporation
only to DTC or its nominee, as applicable. DTC has advised the Corporation that
it is DTC's practice to credit DTC Participants' accounts on the payment date in
accordance with their respective holdings with respect to a Global Security as
shown on DTC's records, unless DTC has reason to believe that it will not
receive payment on such date. Payments by DTC 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 DTC Participant and not of DTC, the Corporation or any
underwriter or agent for the Debt Securities of the series represented by such
Global Security, 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 applicable, as the
registered holder of such Global Security, 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 in such Global Security 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 Debt Securities of the series
represented by such Global Security, any paying agent or authenticating agent
for such Debt Securities nor the Security Registrar or transfer agent 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 interests in the
Global Security representing such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
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 1934 Act. DTC was created to hold securities
deposited by DTC Participants and to facilitate the clearance and settlement of
securities transactions among DTC Participants in such securities through
electronic computerized book-entry changes in accounts of the DTC Participants,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants in DTC include securities brokers and dealers, 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 NASD. 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
DTC Participant, either directly or indirectly. The rules applicable to DTC and
DTC Participants are on file with the Commission.
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
15
<PAGE>
& Co. effect no change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of securities deposited with it; DTC's records reflect
only the identity of the DTC Participants to whose accounts such securities are
credited, which may or may not be the beneficial owners. The DTC Participants
will remain responsible for keeping account of their holdings on behalf of their
customers. Conveyance of notices and other communications by DTC to DTC
Participants, by DTC Participants to Indirect Participants, and by DTC
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 DTC
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 DTC Participants, who in turn act on behalf
of Indirect Participants. Owners of beneficial interests in a Global Security
that are not DTC Participants or Indirect Participants but desire to purchase,
sell or otherwise transfer ownership of such interests may do so only through
DTC Participants and Indirect Participants. In addition, the ability of owners
of beneficial interests in a Global Security 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 Debt Securities of the series represented by such
Global Security.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial interests in Global Securities among DTC 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 with respect to Debt Securities of a particular series and a
successor depositary is not appointed by the Corporation within 90 days, the
Corporation will issue Debt Securities of the series in certificated form in
exchange for beneficial interests in the Global Security representing such Debt
Securities. In addition, the Corporation may at any time determine not to have
Debt Securities of a series represented by Global Securities and, in such event,
will issue Debt Securities of the series in certificated form in exchange for
beneficial interests in the Global Security representing such Debt Securities.
In any such instance, an owner of a beneficial interest in the Global Security
will be entitled to physical delivery in certificated form of a note or notes
representing such Debt Securities equal in principal amount to such beneficial
interest and to have such note or notes registered in its name. Unless otherwise
specified in the applicable Prospectus Supplement, 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.
CEDEL BANK AND EUROCLEAR
If so specified in the applicable Prospectus Supplement, Debt Securities of
a series to be issued in book-entry form and to be sold or traded in Europe may
be represented by one or more Global Securities held through Cedel Bank, societe
anonyme ("Cedel Bank") or Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System (the "Euroclear Operator" or
"Euroclear"). Cedel Bank and Euroclear will hold omnibus positions on behalf
of Cedel Bank Participants and Euroclear Participants (each as
defined herein), respectively, on the books of their respective depositaries
(each, a "Depositary"), which in turn will hold such positions in customers'
securities accounts in the Depositaries' names on the books of DTC.
Transfers between Cedel Bank Participants and Euroclear Participants will
occur in the ordinary way in accordance with their applicable rules and
operating procedures. Cross-market transfers between persons holding directly or
indirectly through DTC in the United States, on the one hand, and directly or
indirectly through Cedel Bank Participants or Euroclear Participants, on the
other, will be effected by DTC in accordance with DTC rules on behalf of the
relevant European international clearing system by its Depositary; however,
cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in such
system in accordance with its rules and procedures and within its established
deadlines (European time). The relevant European international clearing system
will, if the transaction meets its settlement requirements, deliver instructions
to its Depositary to take action to effect final settlement on its
16
<PAGE>
behalf by delivering or receiving securities in DTC, and making or receiving
in accordance with normal procedures for same-day funds settlement applicable
to DTC. Cedel Bank Participants and Euroclear Participants may not deliver
instructions directly to the Depositaries.
Because of time-zone differences, credits for securities in Cedel Bank or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, and will be dated the
business day following the DTC settlement date, and such credits or any
transactions in such securities settled during such processing will be reported
to the relevant Cedel Bank Participant or Euroclear Participant on such business
day. Cash received in Cedel Bank or Euroclear as a result of sales of securities
by or through a Cedel Bank Participant or a Euroclear Participant to a DTC
Participant will be received with value on the DTC settlement date but will be
available in the relevant Cedel Bank or Euroclear cash account only as of the
business day following settlement in DTC.
Cedel Bank is incorporated under the laws of Luxembourg as a professional
depository. Cedel Bank holds securities for its participating organizations
("Cedel Participants") and facilitates the clearance and settlement of
securities transactions between Cedel Participants through electronic book-entry
changes in accounts of Cedel Participants, thereby eliminating the need for
physical movement of certificates. Transactions may be settled by Cedel Bank in
any of 28 currencies, including United States dollars. Cedel Bank provides to
its Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel Bank interfaces with domestic
markets in several countries. As a professional depository, Cedel Bank is
subject to regulation by the Luxembourg Monetary Institute. Cedel Participants
consist of recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the underwriters or
agents with respect to a particular series of Debt Securities. Indirect access
to Cedel Bank is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Cedel Participant, either directly or indirectly.
The Euroclear System (the "Euroclear System") was created in 1968 to hold
securities for participants of the Euroclear System ("Euroclear Participants")
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for physical movement of certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions now may be settled
by Euroclear in any of 32 currencies, including United States dollars. The
Euroclear System includes various other services, including securities lending
and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. The Euroclear System is operated by the Euroclear Operator,
under contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the underwriters or agents with respect to a particular series
of Debt Securities. Indirect access to the Euroclear System is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Brussels branch of a New York banking
corporation that is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Federal Reserve Board and the New York State
Banking Department, as well as the Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear Participants and has no record
of or relations with persons holding through Euroclear Participants.
17
<PAGE>
Distributions with respect to Debt Securities of a series held through
Cedel Bank or Euroclear will be credited to the cash accounts of Cedel
Participants or Euroclear Participants in accordance with the relevant
system's rules and procedures, to the extent received by its respective
Depositary. Such distributions will be subject to tax reporting in accordance
with relevant United States tax laws and regulations. The applicable Prospectus
Supplement with respect to a series of Debt Securities held through Cedel Bank
or Euroclear will set forth certain income tax consequences to foreign
investors. Cedel Bank or the Euroclear Operator, as the case may be, will take
any other action permitted to be taken by a holder of Debt Securities under the
applicable Indenture on behalf of a Cedel Participant or a Euroclear Participant
only in accordance with its relevant rules and procedures and subject to its
respective Depositary's ability to effect such actions on its behalf through
DTC.
Although Cedel Bank and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of applicable Debt Securities among
participants of DTC, Cedel Bank and Euroclear, they are under no obligation to
perform or continue to perform such procedures, and such procedures may be
discontinued at any time.
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 50,000 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, 1995, 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.
18
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS 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. NEITHER THE DELIVERY OF THIS 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 DOES 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>
PROSPECTUS PAGE
<S> <C>
Incorporation of Certain Documents by
Reference.................................... 2
Available Information.......................... 2
NationsBank Corporation........................ 3
Use of Proceeds................................ 6
Ratios of Earnings to Fixed Charges............ 6
Plan of Distribution........................... 6
Description of Debt Securities................. 8
Registration and Settlement.................... 14
Legal Opinions................................. 18
Experts........................................ 18
</TABLE>
$3,000,000,000
(NationsBank Logo Goes Here)
DEBT SECURITIES
PROSPECTUS
, 1996
<PAGE>
SUBJECT TO COMPLETION [ALTERNATE PAGE -- DEBT]
PRELIMINARY PROSPECTUS DATED DECEMBER 10, 1996
[DEBT]
PROSPECTUS
(NationsBank Logo Goes Here)
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 or at the Corporation's discretion.
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 any 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 (in the event that such series is convertible at
the option of the holder or NationsBank into Preferred Stock, Depositary Shares,
Common Stock or other Debt Securities), the form of such series, 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 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 or pricing 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, 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.
THIS PROSPECTUS AND RELATED PROSPECTUS SUPPLEMENTS ARE TO BE USED BY NATIONSBANC
CAPITAL MARKETS, INC., A BROKER-DEALER AND A DIRECT WHOLLY-OWNED
SUBSIDIARY OF NATIONSBANK, IN CONNECTION WITH OFFERS AND SALES RELATED
TO SECONDARY MARKET TRANSACTIONS IN THE DEBT SECURITIES. NATIONSBANC
CAPITAL MARKETS, INC. OR ITS AFFILIATES MAY ACT AS PRINCIPAL OR
AGENT IN SUCH TRANSACTIONS. ANY SUCH SALES WILL BE MADE AT
NEGOTIATED PRICES RELATING TO PREVAILING MARKET PRICES AT
THE TIME OF SALE OR OTHERWISE.
NATIONSBANC CAPITAL MARKETS, INC.
The date of this Prospectus is , 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
STATE.
<PAGE>
[ALTERNATE PAGE -- DEBT]
to $905 million plus an additional amount equal to their net profits for 1996 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 Banks 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 Corporation's consolidated ratios of earnings to
fixed charges for the nine months ended September 30, 1996 and for each of the
years in the five-year period ended December 31, 1995:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits...................................... 1.8 1.7 1.9 2.3 2.4 1.1
Including interest on deposits...................................... 1.5 1.4 1.5 1.5 1.4 1.0
</TABLE>
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
This Prospectus and related Prospectus Supplements are to be used by
NationsBanc Capital Markets, Inc. ("NCMI"), a broker-dealer and a direct
wholly-owned subsidiary of NationsBank, in connection with offers and sales of
the Debt Securities in secondary market transactions at negotiated prices
relating to prevailing prices at the time of sale or otherwise. NCMI may act as
principal or agent in such transactions. The participation of
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NCMI in the offer and sale of the Debt Securities complies with the requirements
of Section 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD") regarding underwriting of securities of an affiliate.
NCMI will not execute a transaction in the Debt Securities in a discretionary
account without the prior written specific approval of NCMI's customer. NCMI has
no obligation to make a market in the Debt Securities and may discontinue its
market-making activities at any time without notice, at its sole discretion.
Furthermore, NCMI may be required to discontinue its market-making activities
during periods when the Corporation is involved in a distribution of certain of
its securities or when NCMI, by virtue of its affiliation with the Corporation,
is aware of material non-public information relating to the Corporation. In such
instance, NCMI would not be able to recommence its market-making activities
until such distribution has been completed or such information has become
publicly available. It is not possible to determine the impact, if any, that any
such discontinuance may have on the market for the Debt Securities. While other
broker-dealers may make a market in the Debt Securities from time to time, there
can be no assurance that any other broker-dealer will do so at any time when
NCMI discontinues its market-making activities.
DESCRIPTION OF DEBT SECURITIES
THE FOLLOWING DESCRIPTION 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 First Trust of
New York, National Association, as successor Trustee to BankAmerica National
Trust Company (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"). Each of the
Senior Indenture and the Subordinated Indenture (each, an "Indenture" and
together, the "Indentures") is incorporated by reference in the Registration
Statement of which this Prospectus forms a part.
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to and qualified in their entirety by
reference to the provisions of the applicable Indentures. Whenever particular
sections or defined terms of the Indentures are referred to, it is intended that
such sections or defined items shall be incorporated herein by reference. Unless
otherwise indicated, capitalized terms shall have the meanings ascribed to them
in the Indentures.
GENERAL
The respective Indentures provide that there is no limitation on the amount
of debt securities that may be issued thereunder from time to time. The amount
of Debt Securities that may be offered and sold pursuant to this Prospectus,
however, is limited to the aggregate initial offering price of the securities
registered under the Registration Statement of which this Prospectus forms a
part, subject to reduction as the result of the sale 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 all Senior Indebtedness (as hereinafter defined) of the
Corporation. See "DESCRIPTION OF DEBT SECURITIES -- Subordination."
The Debt Securities will be issued in fully registered form without
coupons. The Debt Securities may be denominated in U.S. dollars or in another
currency or currency unit. Unless otherwise set forth in the applicable
Prospectus Supplement, any Debt Securities that are denominated in U.S. dollars
will be issued in denominations of $1,000 or an integral multiple thereof. If
any of the Debt Securities are denominated in a foreign
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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, as well as any investment
considerations, 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 Debt Securities may be deemed to 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 relating to such Debt
Securities, including: (1) the designation of the particular series; (2) the
aggregate principal amount of such series that may be authenticated and
delivered under the applicable Indenture; (3) the person to whom any interest on
any Debt Security of the series shall be payable, if other than the person in
whose name the Debt Security (or one or more predecessor Debt Securities) is
registered at the close of business on the regular record date for such
interest; (4) the date or dates on which the principal of the Debt Securities of
such series is payable; (5) 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 Debt Securities on any interest payment
date; (6) 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 Debt Securities
of the series may be surrendered for registration of transfer, and notices and
demands to or upon the Corporation in respect of the Debt Securities of the
series and the Indenture may be served; (7) 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; (8) if other
than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Debt Securities of such series shall be issuable; (9)
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; (10) 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; (11) if the principal of (and premium, if any, on)
or any interest on the Debt Securities of the series is 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; (12) 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; (13) whether the Debt
Securities will be issued in book-entry only form; (14) the identification or
method of selection of any interest rate calculation agents, exchange rate
calculation agents or other agents with respect to Debt Securities of such
series; (15) 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; (16) any provisions relating to the extension of
maturity of, or the renewal of, Debt Securities of such series; and (17) any
other terms of the Debt Securities of such series (which terms shall not be
inconsistent with the provisions of the applicable Indenture).
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The ability of NationsBank to make payments of principal of (and premium,
if any, on) and any 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
"NATIONSBANK CORPORATION -- 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.
CONVERSION
The Debt Securities of any series may be convertible, at the option of the
holder or the Corporation, into Preferred Stock, Depositary Shares, Common Stock
or other Debt Securities if the Prospectus Supplement relating to such series of
Debt Securities so provides. In such case, such Prospectus Supplement will set
forth (i) the period(s) during which such conversion may be elected; (ii) the
conversion price payable and the number of shares or amount of Preferred Stock,
Depositary Shares, Common Stock or other Debt Securities purchaseable upon
conversion, and adjustments thereto, if any, in certain events; (iii) the
procedures for electing such conversion; and (iv) all other terms for such
conversion (which terms shall not be inconsistent with the provisions of the
applicable Indenture).
EXCHANGE, REGISTRATION AND TRANSFER
At the option of the holder, subject to the terms of the applicable
Indenture, Debt Securities of any series (other than Debt Securities issued in
book-entry form) will be exchangeable for other Debt Securities of the same
series and of an equal aggregate principal amount and tenor of any authorized
denominations.
Debt Securities of a series may be presented for exchange as provided
above, and 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 such Debt Securities 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.
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 the Corporation will be required to
maintain a transfer agent in each place of payment for such series. 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) exchange or register the transfer of any Debt Security so selected, called
or being called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part.
For a discussion of restrictions on the exchange, registration and transfer
of Global Securities (hereinafter defined), see "REGISTRATION AND SETTLEMENT."
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement,
principal of (and premium, if any, on) and any interest on Debt 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
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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 Debt
Security on any interest payment date generally will be made to the person in
whose name such Debt Security is registered at the close of business on the
regular record date for such interest payment date. For a discussion of payment
of principal and any premium or interest with respect to Global Securities, see
"REGISTRATION AND SETTLEMENT."
The Corporation initially has designated the principal corporate trust
offices of the Senior Trustee and the Subordinated Trustee in the City of New
York as the places where the Senior Debt Securities and Subordinated Debt
Securities, respectively, may be presented for payment. 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. Any other paying agents designated by the Corporation for the Debt
Securities of each series will be named in an applicable Prospectus Supplement.
SUBORDINATION
The Subordinated Debt Securities are subordinate and subject, to the extent
and in the manner set forth in the Subordinated Indenture, in right of payment
to the prior payment in full of all Senior Indebtedness of the Corporation.
"Senior Indebtedness" is defined by the Subordinated Indenture as any
indebtedness for money borrowed (including all indebtedness of the Corporation
for borrowed and purchased money of the Corporation, all obligations of the
Corporation arising from off-balance sheet guarantees by the Corporation and
direct credit substitutes, and obligations of the Corporation associated with
derivative products such as interest and foreign exchange rate contracts and
commodity contracts) that is outstanding on the date of execution of the
Subordinated Indenture, or is thereafter created, incurred or assumed, for the
payment of which the Corporation is at the time of determination responsible or
liable as obligor, guarantor or otherwise, and all deferrals, renewals,
extensions and refundings of any such indebtedness or obligations, other than
the Subordinated Debt Securities or any other indebtedness as to which, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such indebtedness is subordinate in right of
payment to any other indebtedness of the Corporation. The Prospectus Supplement
relating to each series of Subordinated Debt Securities will set forth the
aggregate amount of then outstanding Senior Indebtedness of the Corporation and
any limitation on the issuance of additional Senior Indebtedness.
No payment on account of principal of (and premium, if any, on) or any
interest 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% in principal amount of any kind or
category of any Senior Indebtedness (or the representative or representatives of
such holders) or the Subordinated Trustee shall have received written notice
thereof from the Corporation.
In the event that any Subordinated Debt Security is declared due and
payable before the date specified therein as the fixed date on which the
principal thereof is due and payable pursuant to the Subordinated Indenture, or
upon any payment or distribution of assets of the Corporation of any kind or
character to creditors upon any dissolution or winding up or total or partial
liquidation or reorganization of the Corporation, all principal of (and premium,
if any, on) and any 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
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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, 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 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
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thereby and at the time outstanding under that Indenture (including, in the case
of holders of Senior Debt Securities, the covenant described above).
MODIFICATION OF THE INDENTURES
Each Indenture contains provisions permitting the Corporation and the
applicable Trustee to modify such Indenture or the rights of the holders of Debt
Securities thereunder, with the consent of the holders of not less than 66 2/3%
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 at such time 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 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.
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 to the Corporation
by the Senior Trustee, or to the Corporation and the Senior Trustee by the
holders of at least 25% in principal amount of all 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).
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COLLECTION OF INDEBTEDNESS, ETC.
Each Indenture also provides that in the event of a failure by the
Corporation to make payment of principal of (and premium, if any, on) or any
interest on the Debt Securities (and, in the case of payment of interest, such
failure to pay shall have continued for 30 days) and upon the demand of the
respective Trustee, the Corporation will pay to such Trustee, for the benefit of
the holders of the Debt Securities, the amount then due and payable on the Debt
Securities for principal and interest, with interest on the overdue principal
and, to the extent payment of interest shall be legally enforceable, upon
overdue installments of interest at the rate borne by the Debt Securities. Each
Indenture further provides that if the Corporation fails to pay such amount
forthwith upon such demand, the respective Trustee may, among other things,
institute a judicial proceeding for the collection thereof. However, each
Indenture provides that notwithstanding any other provision of the Indenture,
the holder of any Debt Security shall have the right to institute suit for the
enforcement of any payment of principal of (and premium, if any, on) and any
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 Debt 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
First Trust of New York, National Association, 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.
REGISTRATION AND SETTLEMENT
DTC
If so specified in an applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series may be issued in book-entry form represented
by one or more global Debt Securities in registered form (each, a "Global
Security"). Unless otherwise specified in such Prospectus Supplement, each such
Global Security will be held through The Depository Trust Company ("DTC"), as
depositary, and will be registered in the name of Cede & Co., as nominee of DTC.
Accordingly, Cede & Co. is expected to be the holder of record of the Debt
Securities.
Under the book-entry system of DTC, purchases of Debt Securities of a
series represented by a Global Security must be made by or through persons that
have accounts with DTC ("DTC Participants") or persons that may hold interests
through DTC Participants ("Indirect Participants"). Upon the issuance and
deposit of a Global Security, DTC will credit, on its book-entry registration
and transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of DTC
Participants. The accounts to be credited will 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). The ownership of
beneficial interests in such Global Security will be shown on, and the transfer
of that ownership will be effected only through, records maintained by DTC (with
respect to interests of DTC Participants) and the records of DTC Participants
(with respect to interests of Indirect Participants) and Indirect Participants.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in certificated form. Such limits and
laws may impair the ability to own, transfer or pledge beneficial interests in a
Global Security.
ALT -13
<PAGE>
[ALTERNATE PAGE -- DEBT]
So long as DTC or its nominee is the registered holder of a Global
Security, DTC or its nominee, as applicable, will be considered the sole owner
or holder of the Debt Securities represented by such Global Security for all
purposes under the applicable Indenture. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities registered in their names, will not receive or be entitled to receive
physical delivery of such Debt Securities in certificated form and will not be
considered the owners or holders thereof under the applicable Indenture.
Accordingly, in order to exercise any rights of a holder of the Debt Securities
under the applicable Indenture, each person owning a beneficial interest in the
Global Security representing such Debt Securities must rely on the procedures of
DTC or, if such person is not a DTC Participant, on the procedures of the DTC
Participant and, if applicable, the Indirect Participant, through which such
person owns its interest.
So long as DTC or its nominee is the registered holder of a Global
Security, Debt Securities of the series represented by such Global Security will
trade in DTC's Same Day Fund Settlement System, and secondary market trading
activity in such Debt Securities 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 such Debt
Securities.
Except as otherwise provided herein, DTC or its nominee, as applicable, as
the registered holder of a Global Security shall be the only person entitled to
receive payments from the Corporation with respect to Debt Securities of the
series represented by such Global Security. Accordingly, payments of principal
of (and premium, if any, on) and any interest on individual Debt Securities of
the series represented by such a Global Security will be made by the Corporation
only to DTC or its nominee, as applicable. DTC has advised the Corporation that
it is DTC's practice to credit DTC Participants' accounts on the payment date in
accordance with their respective holdings with respect to a Global Security as
shown on DTC's records, unless DTC has reason to believe that it will not
receive payment on such date. Payments by DTC 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 DTC Participant and not of DTC, the Corporation or any
underwriter or agent for the Debt Securities of the series represented by such
Global Security, 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 applicable, as the
registered holder of such Global Security, 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 in such Global Security 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 Debt Securities of the series
represented by such Global Security, any paying agent or authenticating agent
for such Debt Securities nor the Security Registrar or transfer agent 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 interests in the
Global Security representing such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
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 1934 Act. DTC was created to hold securities
deposited by DTC Participants and to facilitate the clearance and settlement of
securities transactions among DTC Participants in such securities through
electronic computerized book-entry changes in accounts of the DTC Participants,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants in DTC include securities brokers and dealers, 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 NASD. 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
DTC Participant, either directly or indirectly. The rules applicable to DTC and
DTC Participants are on file with the Commission.
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
ALT -14
<PAGE>
[ALTERNATE PAGE -- DEBT]
& Co. effect no change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of securities deposited with it; DTC's records reflect
only the identity of the DTC Participants to whose accounts such securities are
credited, which may or may not be the beneficial owners. The DTC Participants
will remain responsible for keeping account of their holdings on behalf of their
customers. Conveyance of notices and other communications by DTC to DTC
Participants, by DTC Participants to Indirect Participants, and by DTC
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 DTC
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 DTC Participants, who in turn act on behalf
of Indirect Participants. Owners of beneficial interests in a Global Security
that are not DTC Participants or Indirect Participants but desire to purchase,
sell or otherwise transfer ownership of such interests may do so only through
DTC Participants and Indirect Participants. In addition, the ability of owners
of beneficial interests in a Global Security 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 Debt Securities of the series represented by such
Global Security.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial interests in Global Securities among DTC 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 with respect to Debt Securities of a particular series and a
successor depositary is not appointed by the Corporation within 90 days, the
Corporation will issue Debt Securities of the series in certificated form in
exchange for beneficial interests in the Global Security representing such Debt
Securities. In addition, the Corporation may at any time determine not to have
Debt Securities of a series represented by Global Securities and, in such event,
will issue Debt Securities of the series in certificated form in exchange for
beneficial interests in the Global Security representing such Debt Securities.
In any such instance, an owner of a beneficial interest in the Global Security
will be entitled to physical delivery in certificated form of a note or notes
representing such Debt Securities equal in principal amount to such beneficial
interest and to have such note or notes registered in its name. Unless otherwise
specified in the applicable Prospectus Supplement, 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.
CEDEL BANK AND EUROCLEAR
If so specified in the applicable Prospectus Supplement, Debt Securities of
a series to be issued in book-entry form and to be sold or traded in Europe may
be represented by one or more Global Securities held through Cedel Bank, societe
anonyme ("Cedel Bank") or Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System (the "Euroclear Operator" or
"Euroclear"). Cedel Bank and Euroclear will hold omnibus positions on behalf of
Cedel Bank Participants and Euroclear Participants (each as defined herein),
respectively, on the books of their respective depositaries (each, a
"Depositary"), which in turn will hold such positions in customers' securities
accounts in the Depositaries' names on the books of DTC.
Transfers between Cedel Bank Participants and Euroclear Participants will
occur in the ordinary way in accordance with their applicable rules and
operating procedures. Cross-market transfers between persons holding directly or
indirectly through DTC in the United States, on the one hand, and directly or
indirectly through Cedel Bank Participants or Euroclear Participants, on the
other, will be effected by DTC in accordance with DTC rules on behalf of the
relevant European international clearing system by its Depositary; however,
cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in such
system in accordance with its rules and procedures and within its established
deadlines (European time). The relevant European international clearing system
will, if the transaction meets its settlement requirements, deliver instructions
to its Depositary to take action to effect final settlement on its
ALT -15
<PAGE>
[ALTERNATE PAGE -- DEBT]
behalf by delivering or receiving securities in DTC, and making or receiving in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Cedel Bank Participants and Euroclear Participants may not deliver
instructions directly to the Depositaries.
Because of time-zone differences, credits for securities in Cedel Bank or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, and will be dated the
business day following the DTC settlement date, and such credits or any
transactions in such securities settled during such processing will be reported
to the relevant Cedel Bank Participant or Euroclear Participant on such business
day. Cash received in Cedel Bank or Euroclear as a result of sales of securities
by or through a Cedel Bank Participant or a Euroclear Participant to a DTC
Participant will be received with value on the DTC settlement date but will be
available in the relevant Cedel Bank or Euroclear cash account only as of the
business day following settlement in DTC.
Cedel Bank is incorporated under the laws of Luxembourg as a professional
depository. Cedel Bank holds securities for its participating organizations
("Cedel Participants") and facilitates the clearance and settlement of
securities transactions between Cedel Participants through electronic book-entry
changes in accounts of Cedel Participants, thereby eliminating the need for
physical movement of certificates. Transactions may be settled by Cedel Bank in
any of 28 currencies, including United States dollars. Cedel Bank provides to
its Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel Bank interfaces with domestic
markets in several countries. As a professional depository, Cedel Bank is
subject to regulation by the Luxembourg Monetary Institute. Cedel Participants
consist of recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the underwriters or
agents with respect to a particular series of Debt Securities. Indirect access
to Cedel Bank is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Cedel Participant, either directly or indirectly.
The Euroclear System (the "Euroclear System") was created in 1968 to hold
securities for participants of the Euroclear System ("Euroclear Participants")
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for physical movement of certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions now may be settled
by Euroclear in any of 32 currencies, including United States dollars. The
Euroclear System includes various other services, including securities lending
and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. The Euroclear System is operated by the Euroclear Operator,
under contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the underwriters or agents with respect to a particular series
of Debt Securities. Indirect access to the Euroclear System is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Brussels branch of a New York banking
corporation that is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Federal Reserve Board and the New York State
Banking Department, as well as the Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear Participants and has no record
of or relations with persons holding through Euroclear Participants.
ALT -16
<PAGE>
[ALTERNATE PAGE -- DEBT]
Distributions with respect to Debt Securities of a series held through
Cedel Bank or Euroclear will be credited to the cash accounts of Cedel
Participants or Euroclear Participants in accordance with the relevant
system's rules and procedures, to the extent received by its respective
Depositary. Such distributions will be subject to tax reporting in accordance
with relevant United States tax laws and regulations. The applicable Prospectus
Supplement with respect to a series of Debt Securities held through Cedel Bank
or Euroclear will set forth certain income tax consequences to foreign
investors. Cedel Bank or the Euroclear Operator, as the case may be, will take
any other action permitted to be taken by a holder of Debt Securities under the
applicable Indenture on behalf of a Cedel Participant or a Euroclear Participant
only in accordance with its relevant rules and procedures and subject to its
respective Depositary's ability to effect such actions on its behalf through
DTC.
Although Cedel Bank and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of applicable Debt Securities among
participants of DTC, Cedel Bank and Euroclear, they are under no obligation to
perform or continue to perform such procedures, and such procedures may be
discontinued at any time.
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 50,000 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, 1995, 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.
ALT -17
<PAGE>
[ALTERNATE PAGE -- DEBT]
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 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 NATIONSBANC CAPITAL MARKETS, INC. NEITHER THE
DELIVERY OF THIS 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 DOES 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. THIS PROSPECTUS AND RELATED PROSPECTUS
SUPPLEMENTS ARE TO BE USED BY NATIONSBANC CAPITAL MARKETS, INC., A BROKER-DEALER
AND A DIRECT WHOLLY-OWNED SUBSIDIARY OF THE CORPORATION, IN CONNECTION WITH
OFFERS AND SALES RELATED TO SECONDARY MARKET TRANSACTIONS.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS PAGE
<S> <C>
Incorporation of Certain Documents by
Reference.................................... 2
Available Information.......................... 2
NationsBank Corporation........................ 3
Use of Proceeds................................ 6
Ratios of Earnings to Fixed Charges............ 6
Plan of Distribution........................... 6
Description of Debt Securities................. 7
Registration and Settlement.................... 13
Legal Opinions................................. 17
Experts........................................ 17
</TABLE>
$3,000,000,000
(NationsBank Logo Goes Here)
DEBT SECURITIES
PROSPECTUS
NATIONSBANC CAPITAL MARKETS, INC.
, 1996
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 10, 1996
[EQUITY]
PROSPECTUS
NATIONSBANK(Register mark)
Preferred Stock
Depositary Shares
Common Stock
NationsBank Corporation ("NationsBank" or the "Corporation") may offer from
time to time 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" and, together with the Preferred Stock and the
Depositary Shares, the "Securities"). NationsBank may sell up to $3,000,000,000
in aggregate initial offering price of the Securities, 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 one or more
supplements 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 its unsecured debt securities, which may be
either senior or subordinated (the "Debt Securities"). Any such Debt Securities
will be offered and issued pursuant to the terms of a separate Prospectus
contained in such Registration Statement. The aggregate amount of Securities
that may be offered and sold pursuant hereto is subject to reduction as the
result of the sale of any Debt Securities pursuant to such separate Prospectus
or at the Corporation's discretion.
The specific terms of any Securities offered pursuant to this Prospectus
will be set forth in a Prospectus Supplement. Such terms will include: (a) in
the case of any series of Preferred Stock, the specific designation, the
aggregate number of shares offered, the dividend rate or method of calculation,
the dividend period and dividend payment dates, whether such dividends will be
cumulative or noncumulative, the liquidation preference, voting rights, if any,
any terms for redemption at the option of the holder or NationsBank, any
applicable conversion provisions in the event that such series is convertible at
the option of the holder or NationsBank into shares of Common Stock, and any
other terms of the offering or the series, and (b) in the case of Common Stock,
the aggregate number of shares offered.
The 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
Securities, and any applicable commissions or discounts, will be set forth in
the applicable Prospectus Supplement, in addition to any other terms of the
offering of such Securities. The net proceeds to the Corporation from such sale
also will be set forth in such Prospectus Supplement.
This Prospectus may not be used to consummate sales of 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, 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.
The date of this Prospectus is , 1996.
<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, 1995 as filed March 29, 1996;
(b) The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 as filed May 10, 1996, June 30, 1996 as filed August
14, 1996, and September 30, 1996 as filed November 13, 1996;
(c) The Corporation's Current Reports on Form 8-K filed January 12,
1996, February 1, 1996, March 8, 1996, April 17, 1996, May 16, 1996, July
5, 1996, July 31, 1996, September 6, 1996 (as amended by Form 8-K/A-1 filed
September 11, 1996 and Form 8-K/A-2 filed November 13, 1996), September 20,
1996 (as amended by Form 8-K/A filed September 23, 1996), October 25, 1996,
November 14, 1996 and December 4, 1996; and
(d) The description of the Corporation's Common Stock contained in its
registration statement filed pursuant to Section 12 of the 1934 Act, as
modified by 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 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, Suite 1300, 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. The Commission
maintains an Internet web site that contains reports, proxy and information
statements and other information regarding issuers who file electronically with
the Commission. The address of that site is http://www.sec.gov. 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 multi-bank holding company established as a North Carolina
corporation in 1968 and is registered under the Bank Holding Company Act of
1956, as amended (the "BHCA"), with its principal assets being the stock of its
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 in Charlotte, North Carolina 28255. Its telephone number is
(704) 386-5000.
OPERATIONS
NationsBank provides a diversified range of banking and certain nonbanking
financial services and products through its various subsidiaries. NationsBank
manages its business activities through three major business units: the General
Bank, Global Finance and Financial Services.
The General Bank provides comprehensive services in the commercial and
retail banking fields, including the origination and servicing of home mortgage
loans, the issuance and servicing of credit cards (through a Delaware
subsidiary), indirect lending, dealer finance and certain insurance services.
The General Bank also provides retirement services for defined benefit and
defined contribution plans, full service and discount brokerage services,
investment advisory services, including the Nations Fund family of mutual funds,
as well as private banking and investment management services through
subsidiaries of NationsBank. As of September 30, 1996, the General Bank operated
1,980 banking offices through the following Banks: NationsBank, N.A. (serving
the states of North Carolina, South Carolina, Maryland and Virginia and the
District of Columbia); NationsBank, N.A. (South) (serving the states of Florida
and Georgia); NationsBank of Kentucky, N.A.; NationsBank of Tennessee, N.A;
NationsBank of Texas, N.A.; and Sun World, N.A. (serving the state of Texas).
The General Bank also provides fully automated, 24-hour cash dispensing and
depositing services throughout the states in which it is located, through 3,609
automated teller machines.
Global Finance provides comprehensive corporate and investment banking as
well as trading and distribution services to domestic and international
customers. The group serves as a principal lender and investor, as well as an
advisor, arranger and underwriter, and manages treasury and trade transactions
for clients and customers. Loan origination and syndication, asset-backed
lending, leasing, factoring, project finance and mergers and acquisitions are
representative of the services provided by the group. Global Finance also
underwrites, trades and distributes 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")), and trades and distributes a wide range of derivative products
in certain interest rate, foreign exchange, commodity and equity markets. Global
Finance provides its services through various offices located in major United
States cities as well as in London, Frankfurt, Singapore, Bogota, Mexico City,
Grand Cayman, Nassau, Seoul, Tokyo, Osaka, Taipei and Hong Kong.
Financial Services includes NationsCredit Consumer Corporation, primarily a
consumer finance subsidiary, and NationsCredit Commercial Corporation, primarily
a commercial finance subsidiary. NationsCredit Consumer Corporation, which has
approximately 331 offices located in 36 states, provides personal, mortgage and
automobile loans to consumers and retail finance programs to dealers.
NationsCredit Commercial Corporation consists of seven divisions that specialize
in one or more of the following areas: equipment loans and leasing; loans for
debt restructuring, mergers and acquisitions and working capital; real estate,
golf/recreational and health care financing; and inventory financing to
manufacturers, distributors and dealers.
As part of its operations, NationsBank 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.
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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
Federal Deposit Insurance Corporation (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 Corporation's
operations, management and 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
became able to acquire banks in states other than its home state beginning
September 29, 1995, without regard to the permissibility of such acquisition
under state law, but subject to any state requirement that the bank has been
organized and operating for a minimum period of time, not to exceed five years,
and the requirement that the bank holding company, prior to or following the
proposed acquisition, controls no more than 10% of the total amount of deposits
of insured depository institutions in the United States and no more than 30% of
such deposits in that state (or such lesser or greater amount set by state law).
The Interstate Banking and Branching Act also authorizes banks to merge
across state lines, therefore 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. Of
those states in which the Banks are located, Delaware, Maryland, North Carolina
and Virginia have enacted legislation to "opt in," thereby permitting interstate
branching prior to June 1, 1997, and Texas has adopted legislation to "opt out"
of the interstate branching provisions (which Texas law currently expires on
September 2, 1999).
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.
CAPITAL AND OPERATIONAL REQUIREMENTS. The Federal Reserve Board, the
Comptroller and the FDIC have issued substantially similar risk-based and
leverage capital guidelines applicable to United States banking organizations.
In addition, those regulatory agencies may from time to time require that a
banking organization maintain capital above the minimum levels, whether because
of its financial condition or actual or anticipated growth.
The Federal Reserve Board risk-based guidelines define a two-tier capital
framework. Tier 1 capital consists of common and qualifying preferred
shareholders' equity, less certain intangibles and other adjustments.
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Tier 2 capital consists of subordinated and other qualifying debt, and the
allowance for credit losses up to 1.25% 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% 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% and the minimum total capital ratio is 8%.
The Corporation's Tier 1 and total risk-based capital ratios under these
guidelines at September 30, 1996 were 7.05% and 12.05%, respectively.
The leverage ratio is determined by dividing Tier 1 capital by adjusted
average total assets. Although the stated minimum ratio is 3%, most banking
organizations are required to maintain ratios of at least 100 to 200 basis
points above 3%. The Corporation's leverage ratio at September 30, 1996 was
6.30%. 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, FDICIA requires the
various regulatory agencies to prescribe 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%, a total capital ratio of at least
10% and a leverage ratio of at least 5% and not be subject to a capital
directive order. An "adequately capitalized" institution must have a Tier 1
capital ratio of at least 4%, a total capital ratio of at least 8% and a
leverage ratio of at least 4%, or 3% in some cases. Under these guidelines, as
of September 30, 1996, each of the Banks was considered 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. This
evaluation will be made as a part of the institution's regular safety and
soundness examination. Banking agencies also have recently adopted final
regulations requiring regulators to consider 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
evaluation of a bank's capital adequacy. Concurrently, banking agencies have
proposed a methodology for evaluating interest rate risk. After gaining
experience with the proposed measurement process, these banking agencies intend
to propose further regulations to establish an explicit risk-based capital
charge for interest rate risk.
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
from the Banks. 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. As of January 1, 1996, the Banks can
initiate dividend payments without prior regulatory approval of up
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to $905 million plus an additional amount equal to their net profits for 1996 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 Banks may be assessed for the FDIC's loss, subject to
certain exceptions.
USE OF PROCEEDS
The net proceeds from the sale of the 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 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 COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following are the consolidated ratios of earnings to combined fixed
charges and preferred stock dividend requirements for the nine months ended
September 30, 1996 and for each of the years in the five-year period ended
December 31, 1995:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends:
Excluding interest on deposits...................................... 1.8 1.6 1.8 2.3 2.3 1.1
Including interest on deposits...................................... 1.5 1.4 1.5 1.5 1.4 1.0
</TABLE>
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. Preferred
stock dividend requirements represent dividend requirements on the outstanding
preferred stock adjusted to reflect the pre-tax earnings that would be required
to cover such dividend requirements.
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PLAN OF DISTRIBUTION
The Corporation may offer and sell the 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 any Securities will set forth the terms
of the offering of such 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 Securities, the public offering or purchase price of
such 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 Securities may be listed.
If underwriters are used in the offer and sale of Securities, the
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 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 Securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all the 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.
Securities also 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 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. 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 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 Securities not less than and, unless the
Corporation otherwise agrees, the aggregate amount of 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
Securities will not be subject to any conditions except that (i) the purchase of
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 Securities to underwriters shall have occurred. A
commission set forth in the Prospectus Supplement will be paid to underwriters
soliciting purchases of 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.
Any series of Preferred Stock 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 such Securities are sold
by the Corporation for public offering and sale may make a market in such
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 Securities.
Any underwriter, dealer or agent participating in the distribution of any
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 Securities so
offered and sold, and any discounts or commissions received by them from
NationsBank and any
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<PAGE>
profit realized by them on the sale or resale of the 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 Securities will comply with the requirements of Section 2720 of
the Conduct Rules 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 Securities
will execute a transaction in the Securities in a discretionary account without
the prior written specific approval of the member's customer.
This Prospectus and related Prospectus Supplements may also be used by
direct or indirect wholly-owned subsidiaries of NationsBank in connection with
offers and sales related to secondary market transactions in the 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 PREFERRED STOCK
GENERAL
NationsBank has authorized 45,000,000 shares of preferred stock and may
issue such preferred stock in one or more series, each with such preferences,
limitations, designations, conversion rights, voting rights, dividend rights,
voluntary and involuntary liquidation rights and other rights as it may
determine. NationsBank has designated 3,000,000 shares of ESOP Convertible
Preferred Stock, Series C (the "ESOP Preferred Stock"), of which 2.4 million
shares were issued and outstanding as of September 30, 1996.
The ability of NationsBank to pay dividends with respect to its preferred
stock or other capital stock 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 "NATIONSBANK
CORPORATION -- Supervision and Regulation."
THE PREFERRED STOCK
GENERAL. The Preferred Stock shall have the general dividend, voting and
liquidation preference rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of Preferred Stock offered
thereby. Reference is made to the applicable Prospectus Supplement for specific
terms, including, where applicable: (i) the title and stated value of such
Preferred Stock; (ii) the aggregate number of shares of Preferred Stock so
offered; (iii) the price at which such Preferred Stock will be issued; (iv) the
dividend rates or method of calculation, the dividend period and the dates on
which dividends shall be payable; (v) whether any such dividends will be
cumulative or noncumulative, and if cumulative, the date from which dividends
shall commence to cumulate; (vi) the dates on which the Preferred Stock will be
subject to redemption at the option of the Corporation, if applicable, and any
related redemption terms; (vii) any mandatory redemption or sinking fund
provisions; (viii) any rights on the part of the holder or NationsBank to
convert the Preferred Stock into shares of Common Stock; and (ix) any additional
voting, liquidation, preemptive and other rights, preferences, privileges,
limitations and restrictions. The description of certain provisions of the
Preferred Stock set forth below and in the applicable Prospectus Supplement does
not purport to be complete and is subject to and qualified in its entirety by
reference to the Articles of Amendment to the Articles of Incorporation of the
Corporation relating to the particular series of Preferred Stock, which will be
filed with the Commission at or prior to the time of sale of such Preferred
Stock.
NationsBank may, at its option, elect to offer Depositary Shares evidenced
by depositary receipts (the "Depositary Receipts"), each representing a
fractional interest (to be specified in the Prospectus Supplement
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relating to the particular series of Preferred Stock) in a share of a particular
series of the Preferred Stock issued and deposited with a Depositary (as defined
below). See "DESCRIPTION OF DEPOSITARY SHARES" below.
The Preferred Stock ranks senior to the Common Stock as to the payment of
dividends and the distribution of assets on liquidation, dissolution and winding
up of the Corporation. The dividend and liquidation preference rights of the
Preferred Stock relative to the ESOP Preferred Stock or any future series of
preferred stock of the Corporation shall be set forth in the Prospectus
Supplement relating to the particular series of Preferred Stock offered thereby.
When issued in accordance with the terms of the Prospectus and the
applicable Prospectus Supplement, the Preferred Stock will be validly issued,
fully paid and nonassessable.
DIVIDENDS. When and as declared by the Board of Directors of the
Corporation, holders of the Preferred Stock will be entitled to receive
quarterly cash dividends at such rates and on such dates as will be set forth in
the applicable Prospectus Supplement. All dividends shall be paid out of funds
of NationsBank legally available for such purpose. Except as otherwise set forth
in the applicable Prospectus Supplement, no dividends shall be paid on other
shares of the Corporation, nor shall any shares of other capital stock of the
Corporation be redeemed, repurchased or otherwise acquired for any consideration
(or any moneys be paid into a sinking fund for the redemption of shares of such
stock) by the Corporation, if dividends on any series of Preferred Stock are in
arrears.
VOTING. Except as required by applicable law or as otherwise set forth in
the applicable Prospectus Supplement, the holders of Preferred Stock shall have
no voting rights with regard to matters submitted to a general vote of the
shareholders of the Corporation.
LIQUIDATION PREFERENCE. In the event of any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, the holders of
any series of Preferred Stock shall be entitled to receive, by reason of their
ownership thereof, after distributions to holders of any series or class of
capital stock of the Corporation as may be set forth in the applicable
Prospectus Supplement, an amount equal to the appropriate stated or liquidation
value of the shares of such series (as set forth in the applicable Prospectus
Supplement), plus an amount equal to accrued and unpaid dividends, if any,
through the date of such payment. If upon the occurrence of such event, the
assets and funds to be thus distributed among the holders of such Preferred
Stock shall be insufficient to permit the payment to such holders of the full
amount due, then the holders of such Preferred Stock shall share ratably in any
distribution of assets of the Corporation in proportion to the respective
amounts which otherwise would be payable with respect to the shares held by them
upon such distribution if all amounts payable on or with respect to such shares
were paid in full.
ESOP PREFERRED STOCK
THE FOLLOWING SUMMARY OF THE ESOP PREFERRED STOCK IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE DESCRIPTION OF SUCH SERIES OF PREFERRED STOCK
CONTAINED IN THE CORPORATION'S RESTATED ARTICLES OF INCORPORATION, AS AMENDED.
The ESOP Preferred Stock was first issued in the transaction by which
NationsBank was formed from the merger of NCNB Corporation and C&S/Sovran
Corporation in 1991 upon the conversion of shares of ESOP Convertible Preferred
Stock, Series C of C&S/Sovran Corporation. All shares are held by the trustee
under the NationsBank Corporation Retirement Savings Plan (the "ESOP").
Shares of ESOP Preferred Stock have no preemptive or preferential rights to
purchase or subscribe for shares of NationsBank capital stock of any class and
are not subject to any sinking fund or other obligation of NationsBank to
repurchase or retire the series, except as discussed below.
Each share of ESOP Preferred Stock is entitled to an annual dividend,
subject to certain adjustments, of $3.30 per share, payable semiannually. Unpaid
dividends accumulate as of the date on which they first became payable, without
interest. So long as any shares of ESOP Preferred Stock are outstanding, no
dividend may be declared, paid or set apart for payment on any other series of
stock ranking on a parity with the ESOP Preferred Stock as to dividends, unless
like dividends have been declared and paid, or set apart for payment, on the
ESOP Preferred Stock for all dividend payment periods ending on or before the
dividend payment date for such parity stock, ratably in proportion to their
respective amounts of accumulated and unpaid dividends.
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NationsBank generally may not declare, pay or set apart for payment any
dividends (except for, among other things, dividends payable solely in shares of
stock ranking junior to the ESOP Preferred Stock as to dividends or upon
liquidation) on, make any other distribution on, or make payment on account of
the purchase, redemption or other retirement of, any other class or series of
NationsBank capital stock ranking junior to the ESOP Preferred Stock as to
dividends or upon liquidation, until full cumulative dividends on the ESOP
Preferred Stock have been declared and paid or set apart for payment when due.
The holder of the ESOP Preferred Stock is entitled to vote on all matters
submitted to a vote of the holders of Common Stock and votes together with the
holders of Common Stock as one class. Except as otherwise required by applicable
law, the holder of the ESOP Preferred Stock has no special voting rights. To the
extent that the holder of such shares is entitled to vote, each share is
entitled to the number of votes equal to the number of shares of Common Stock
into which such share of ESOP Preferred Stock could be converted on the record
date for determining the shareholders entitled to vote, rounded to the nearest
whole vote.
Shares of the ESOP Preferred Stock initially are convertible into Common
Stock at a conversion rate equal to 0.84 shares of Common Stock per share of
ESOP Preferred Stock and a conversion price of $42.50 per 0.84 shares of Common
Stock, subject to certain customary anti-dilution adjustments.
In the event of any voluntary or involuntary dissolution, liquidation or
winding-up of NationsBank, the holder of the ESOP Preferred Stock will be
entitled to receive out of the assets of NationsBank available for distribution
to shareholders, subject to the rights of the holders of any Preferred Stock
ranking senior to or on a parity with the ESOP Preferred Stock as to
distributions upon liquidation, dissolution or winding-up but before any amount
will be paid or distributed among the holders of Common Stock or any other
shares ranking junior to the ESOP Preferred Stock as to such distributions,
liquidating distributions of $42.50 per share plus all accrued and unpaid
dividends thereon to the date fixed for distribution. If, upon any voluntary or
involuntary dissolution, liquidation or winding-up of NationsBank, the amounts
payable with respect to the ESOP Preferred Stock and any other stock ranking on
a parity therewith as to any such distribution are not paid in full, the holder
of the ESOP Preferred Stock and such other stock will share ratably in any
distribution of assets in proportion to the full respective preferential amounts
to which they are entitled. After payment of the full amount of the liquidating
distribution to which it is entitled, the holder of the ESOP Preferred Stock
will not be entitled to any further distribution of assets by NationsBank.
Neither a merger or consolidation of NationsBank with or into any other
corporation, nor a merger or consolidation of any other corporation with or into
NationsBank nor a sale, transfer or lease of all or any portion of NationsBank's
assets, will be deemed to be a dissolution, liquidation or winding-up of
NationsBank.
The ESOP Preferred Stock is redeemable, in whole or in part, at the option
of NationsBank, at any time. The redemption price for the shares of the ESOP
Preferred Stock, which may be paid in cash or shares of Common Stock, will
depend upon the time of redemption. Specifically, the redemption price for the
12-month period that began on July 1, 1996 is $43.49 per share; on each
succeeding July 1, the redemption price will be reduced by $.33 per share,
except that on and after July 1, 1999, the redemption price will be $42.50 per
share. In each case, the redemption price also must include all accrued and
unpaid dividends to the date of redemption. To the extent that the ESOP
Preferred Stock is treated as Tier 1 capital for bank regulatory purposes, the
approval of the Federal Reserve Board may be required for redemption of the ESOP
Preferred Stock.
NationsBank is required to redeem shares of the ESOP Preferred Stock at the
option of the holder of such shares to the extent necessary either to provide
for distributions required to be made under the ESOP or to make payments of
principal, interest or premium due and payable on any indebtedness incurred by
the holder of the shares for the benefit of the ESOP. The redemption price in
such case will be the greater of $42.50 per share plus accrued and unpaid
dividends to the date of redemption or the fair market value of the aggregate
number of shares of Common Stock into which a share of ESOP Preferred Stock then
is convertible.
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DESCRIPTION OF DEPOSITARY SHARES
GENERAL
NationsBank may, at its option, elect to offer fractional interests in the
Preferred Stock, rather than whole shares of such securities. In the event such
option is exercised, NationsBank will provide for the issuance by a Depositary
to the public of receipts of Depositary Shares, each of which will represent a
fractional interest in a share of a particular series of the Preferred Stock, as
set forth in the Prospectus Supplement for such series of Preferred Stock.
Certain general terms and provisions of the form of Deposit Agreement (as
described below), the Depositary Shares and the form of Depositary Receipts to
which a Prospectus Supplement may relate are set forth below. The particular
terms of the Preferred Stock offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may apply to the Depositary
Shares will be described in the applicable Prospectus Supplement. The
descriptions below and in any Prospectus Supplement do not purport to be
complete and are subject to and qualified in their entirety by reference to the
Deposit Agreement and the Depositary Receipts, the forms of which are
incorporated by reference in the Registration Statement of which this Prospectus
is a part and the definitive forms of which will be filed with the Commission at
the time of sale of such Depositary Shares.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between NationsBank and a bank or trust company selected by
NationsBank having its principal office in the United States and having a
combined capital and surplus of at least $5,000,000 (the "Depositary"). The
applicable Prospectus Supplement will set forth the name and address of the
Depositary. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fractional
interest in a share of Preferred Stock underlying such Depositary Share, to all
the rights and preferences of the Preferred Stock underlying such Depositary
Share (including dividend, voting, redemption, conversion and liquidation
rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Depositary Receipts will be distributed to
those persons purchasing the fractional shares of the related series of
Preferred Stock in accordance with the terms of the offering as described in the
applicable Prospectus Supplement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of NationsBank, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Corporation's expense.
Upon the surrender of Depositary Receipts at the office of the Depositary
(unless the Depositary Shares have been previously called for redemption) and
upon payment by the holder of the charges provided in the Deposit Agreement and
subject to the terms thereof, a holder of Depositary Shares is entitled to have
the Depositary deliver to such holder the number of whole shares of the
Preferred Stock underlying the Depositary Shares evidenced by the surrendered
Depositary Receipts; PROVIDED, HOWEVER, that the holder of such shares of
Preferred Stock will not thereafter be entitled to receive Depositary Shares
therefor. If the Depositary Receipts delivered by the holder evidence a number
of Depositary Shares in excess of the number of Depositary Shares representing
the number of whole shares of the related series of Preferred Stock to be
withdrawn, the Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
number of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary
11
<PAGE>
Shares a fraction of one cent, and any balance not so distributed shall be added
to and treated as part of the next sum received by the Depositary for
distribution to record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary, with the approval of
NationsBank, may sell such property and distribute the net proceeds from such
sale to such holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 45 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever NationsBank redeems Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the number
of Depositary Shares relating to the Preferred Stock so redeemed. If less than
all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holder of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock held by the Depositary are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Depositary as to
the exercise of the voting rights pertaining to the amount of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of Preferred Stock underlying such
Depositary Shares in accordance with such instructions, and NationsBank will
agree to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will abstain from voting
Preferred Stock to the extent it does not receive specific instructions from the
holders of Depositary Shares relating to such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between NationsBank and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority in interest of the Depositary Shares then
outstanding. A Deposit Agreement may be terminated by NationsBank or the
Depositary only if (i) all outstanding Depositary Shares relating thereto have
been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock underlying such Depositary Shares in connection with any
liquidation, dissolution or winding up of NationsBank.
CHARGES OF DEPOSITARY
NationsBank will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. NationsBank
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares
12
<PAGE>
will pay other transfer and other taxes and governmental charges and such other
charges as are expressly provided in the Deposit Agreement to be for their
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from NationsBank which are delivered to the Depositary and
which NationsBank is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor NationsBank will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of NationsBank and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their respective duties thereunder and neither entity will be obligated
to prosecute or defend any legal proceeding in respect of any Depositary Shares
or Preferred Stock unless satisfactory indemnity is furnished. Each entity may
rely upon written advice of counsel or accountants, or information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Shares or
other persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to NationsBank notice
of its election to do so, and NationsBank may at any time remove the Depositary,
any such resignation or removal to take effect only upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $5,000,000.
DESCRIPTION OF COMMON STOCK
THE FOLLOWING SUMMARY OF THE COMMON STOCK IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE DESCRIPTION OF THE COMMON STOCK INCORPORATED HEREIN BY
REFERENCE.
GENERAL
NationsBank is authorized to issue 800,000,000 shares of its Common Stock,
of which 288.1 million shares were outstanding as of September 30, 1996. The
Common Stock is traded on the New York Stock Exchange, Inc. and on The Pacific
Stock Exchange Incorporated under the symbol "NB." The Common Stock is also
listed on the London Stock Exchange, and certain shares are listed and traded on
the Tokyo Stock Exchange. As of September 30, 1996, 55.7 million shares were
reserved for issuance in connection with various employee and director benefit
plans of NationsBank and upon the conversion of the ESOP Preferred Stock, 2.8
million shares were reserved for issuance under the Corporation's Dividend
Reinvestment and Stock Purchase Plan and 110 million shares were reserved for
issuance in connection with the proposed merger of Boatmen's Bancshares, Inc.
into NB Holdings Corporation, a wholly owned subsidiary of NationsBank. After
taking into account the shares reserved as described above, approximately 343.4
million authorized shares of the Common Stock remained available for issuance
for other corporate purposes as of September 30, 1996.
VOTING AND OTHER RIGHTS
The holders of the Common Stock are entitled to one vote per share, and, in
general, a majority of votes cast with respect to a matter is sufficient to take
action upon routine matters. Directors are elected by a plurality of the votes
cast, and each shareholder entitled to vote in such election shall be entitled
to vote each share of stock for as many persons as there are directors to be
elected. In elections for directors, such shareholders do not have the right to
cumulate their votes, so long as the Corporation has a class of shares
registered under Section 12 of the 1934 Act (unless action is taken to provide
otherwise by charter amendment, which action management does not currently
intend to propose). In general, (i) amendments to the Corporation's Restated
Articles of Incorporation must be approved by each voting group entitled to vote
separately thereon by a majority of the votes cast by that voting group, unless
the amendment creates dissenters' rights for a particular voting group, in which
case such amendment must be approved by a majority of the votes entitled to be
cast by such voting group; (ii) a merger or share exchange required to be
approved by shareholders must be approved
13
<PAGE>
by each voting group entitled to vote separately thereon by a majority of the
votes entitled to be cast by that voting group; and (iii) the dissolution of the
Corporation, or the sale of all or substantially all of the property of the
Corporation other than in the usual and regular course of business, must be
approved by a majority of all votes entitled to be cast thereon.
In the event of liquidation of the Corporation, holders of the Common Stock
would be entitled to receive pro rata any assets legally available for
distribution to shareholders with respect to shares held by them, subject to any
prior rights of any preferred stock then outstanding. See "DESCRIPTION OF
PREFERRED STOCK" above.
The Common Stock does not have any preemptive rights, redemption
privileges, sinking fund privileges or conversion rights. All the outstanding
shares of the Common Stock are, and upon proper conversion of any Preferred
Stock all of the shares of Common Stock into which such shares are converted
will be, validly issued, fully paid and nonassessable.
Chase Mellon Shareholder Services, L.L.C. acts as transfer agent and
registrar for the Common Stock.
DISTRIBUTIONS
The holders of the Common Stock are entitled to receive such dividends or
distributions as the Board of Directors of the Corporation may declare out of
funds legally available for such payments. The payment of distributions by
NationsBank is subject to the restrictions of North Carolina law applicable to
the declaration of distributions by a business corporation. A corporation
generally may not authorize and make distributions if, after giving effect
thereto, it would be unable to meet its debts as they become due in the usual
course of business or if the corporation's total assets would be less than the
sum of its total liabilities plus the amount that would be needed, if it were to
be dissolved at the time of distribution, to satisfy claims upon dissolution of
shareholders who have preferential rights superior to the rights of the holders
of its common stock. In addition, the payment of distributions to shareholders
is subject to any prior rights of outstanding preferred stock, including the
ESOP Preferred Stock and any other series of Preferred Stock when and if issued
from time to time. See "DESCRIPTION OF PREFERRED STOCK." Share dividends, if any
are declared, may be paid from NationsBank's authorized but unissued shares.
The ability of NationsBank to pay dividends 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
"NATIONSBANK CORPORATION -- Supervision and Regulation."
LEGAL OPINIONS
The legality of the 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 50,000 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, 1995, 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.
14
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS 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. NEITHER THE DELIVERY OF THIS 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 DOES 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
Incorporation of Certain Documents by
Reference................................... 2
Available Information......................... 2
NationsBank Corporation....................... 3
Use of Proceeds............................... 6
Ratios of Earnings to Combined Fixed Charges
and Preferred Stock Dividends............... 6
Plan of Distribution.......................... 7
Description of Preferred Stock................ 8
Description of Depositary Shares.............. 11
Description of Common Stock................... 13
Legal Opinions................................ 14
Experts....................................... 14
</TABLE>
$3,000,000,000
(NationsBank Logo Goes Here)
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
PROSPECTUS
, 1996
<PAGE>
SUBJECT TO COMPLETION [ALTERNATE PAGE -- EQUITY]
PRELIMINARY PROSPECTUS DATED DECEMBER 10, 1996
[EQUITY]
PROSPECTUS
NATIONSBANK(Register mark)
Preferred Stock
Depositary Shares
Common Stock
NationsBank Corporation ("NationsBank" or the "Corporation") may offer from
time to time 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" and, together with the Preferred Stock and the
Depositary Shares, the "Securities"). NationsBank may sell up to $3,000,000,000
in aggregate initial offering price of the Securities, 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 one or more
supplements 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 its unsecured debt securities, which may be
either senior or subordinated (the "Debt Securities"). Any such Debt Securities
will be offered and issued pursuant to the terms of a separate Prospectus
contained in such Registration Statement. The aggregate amount of Securities
that may be offered and sold pursuant hereto is subject to reduction as the
result of the sale of any Debt Securities pursuant to such separate Prospectus
or at the Corporation's discretion.
The applicable Prospectus Supplement will set forth the specific terms of
Securities offered pursuant to this Prospectus, including: (a) in the case of
any series of Preferred Stock, the specific designation, the aggregate number of
shares offered, the dividend rate or method of calculation, the dividend period
and dividend payment dates, whether such dividends will be cumulative or
noncumulative, the liquidation preference, voting rights, if any, any terms for
redemption at the option of the holder or NationsBank, any applicable conversion
provisions in the event that such series is convertible at the option of the
holder or NationsBank into shares of Common Stock, and any other terms of the
offering or the series, and (b) in the case of Common Stock, the aggregate
number of shares offered.
The 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
Securities, and any applicable commissions or discounts, will be set forth in
the applicable Prospectus Supplement, in addition to any other terms of the
offering of such Securities. The net proceeds to the Corporation from such sale
also will be set forth in such Prospectus Supplement.
This Prospectus may not be used to consummate sales of 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, 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.
THIS PROSPECTUS AND RELATED PROSPECTUS SUPPLEMENTS ARE TO BE USED BY NATIONSBANC
CAPITAL MARKETS, INC., A BROKER-DEALER AND A DIRECT WHOLLY-OWNED SUBSIDIARY
OF NATIONSBANK, IN CONNECTION WITH OFFERS AND SALES RELATED TO SECONDARY
MARKET TRANSACTIONS IN THE SECURITIES. NATIONSBANK CAPITAL MARKETS,
INC. OR ITS AFFILIATES MAY ACT AS PRINCIPAL OR AGENT IN SUCH
TRANSACTIONS. ANY SUCH SALES WILL BE MADE AT NEGOTIATED PRICES
RELATING TO PREVAILING MARKET PRICES AT THE TIME OF SALE OR
OTHERWISE.
NATIONSBANC CAPITAL MARKETS, INC.
The date of this Prospectus is , 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
STATE.
<PAGE>
[ALTERNATE PAGE -- EQUITY]
to $905 million plus an additional amount equal to their net profits for 1996 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 Banks may be assessed for the FDIC's loss, subject to
certain exceptions.
USE OF PROCEEDS
The net proceeds from the sale of the 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 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 COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following are the consolidated ratios of earnings to combined fixed
charges and preferred stock dividend requirements for the nine months ended
September 30, 1996 and for each of the years in the five-year period ended
December 31, 1995:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends:
Excluding interest on deposits...................................... 1.8 1.6 1.8 2.3 2.3 1.1
Including interest on deposits...................................... 1.5 1.4 1.5 1.5 1.4 1.0
</TABLE>
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. Preferred
stock dividend requirements represent dividend requirements on the outstanding
preferred stock adjusted to reflect the pre-tax earnings that would be required
to cover such dividend requirements.
ALT -6
<PAGE>
[ALTERNATE PAGE -- EQUITY]
PLAN OF DISTRIBUTION
This Prospectus and related Prospectus Supplements are to be used by
NationsBanc Capital Markets, Inc. ("NCMI"), a broker-dealer and a direct
wholly-owned subsidiary of NationsBank, in connection with offers and sales of
the Securities in secondary market transactions at negotiated prices relating to
prevailing prices at the time of sale or otherwise. NCMI may act as principal or
agent in such transactions. The participation of NCMI in the offer and sale of
the Securities complies with the requirements of Section 2720 of the Conduct
Rules of the National Association of Securities Dealers, Inc. (the "NASD")
regarding underwriting of securities of an affiliate. NCMI will not execute a
transaction in the Securities in a discretionary account without the prior
written specific approval of NCMI's customer. NCMI has no obligation to make a
market in the Securities and may discontinue its market-making activities at any
time without notice, at its sole discretion. Furthermore, NCMI may be required
to discontinue its market-making activities during periods when the Corporation
is involved in a distribution of certain of its securities or when NCMI, by
virtue of its affiliation with the Corporation, is aware of material non-public
information relating to the Corporation. In such instance, NCMI would not be
able to recommence its market-making activities until such distribution has been
completed or such information has become publicly available. It is not possible
to determine the impact, if any, that any such discontinuance may have on the
market for the Securities. While other broker-dealers may make a market in the
Securities from time to time, there can be no assurance that any other
broker-dealer will do so at any time when NCMI discontinues its market-making
activities.
DESCRIPTION OF PREFERRED STOCK
GENERAL
NationsBank has authorized 45,000,000 shares of preferred stock and may
issue such preferred stock in one or more series, each with such preferences,
limitations, designations, conversion rights, voting rights, dividend rights,
voluntary and involuntary liquidation rights and other rights as it may
determine. NationsBank has designated 3,000,000 shares of ESOP Convertible
Preferred Stock, Series C (the "ESOP Preferred Stock"), of which 2.4 million
shares were issued and outstanding as of September 30, 1996.
The ability of NationsBank to pay dividends with respect to its preferred
stock or other capital stock 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 "NATIONSBANK
CORPORATION -- Supervision and Regulation."
THE PREFERRED STOCK
GENERAL. The Preferred Stock shall have the general dividend, voting and
liquidation preference rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of Preferred Stock offered
thereby. Reference is made to the applicable Prospectus Supplement for specific
terms, including, where applicable: (i) the title and stated value of such
Preferred Stock; (ii) the aggregate number of shares of Preferred Stock so
offered; (iii) the price at which such Preferred Stock will be issued; (iv) the
dividend rates or method of calculation, the dividend period and the dates on
which dividends shall be payable; (v) whether any such dividends will be
cumulative or noncumulative, and if cumulative, the date from which dividends
shall commence to cumulate; (vi) the dates on which the Preferred Stock will be
subject to redemption at the option of the Corporation, if applicable, and any
related redemption terms; (vii) any mandatory redemption or sinking fund
provisions; (viii) any rights on the part of the holder or NationsBank to
convert the Preferred Stock into shares of Common Stock; and (ix) any additional
voting, liquidation, preemptive and other rights, preferences, privileges,
limitations and restrictions. The description of certain provisions of the
Preferred Stock set forth below and in the applicable Prospectus Supplement does
not purport to be complete and is subject to and qualified in its entirety by
reference to the Articles of Amendment to the Articles of Incorporation of the
Corporation relating to the particular series of Preferred Stock, which will be
filed with the Commission at or prior to the time of sale of such Preferred
Stock.
NationsBank may, at its option, elect to offer Depositary Shares evidenced
by depositary receipts (the "Depositary Receipts"), each representing a
fractional interest (to be specified in the Prospectus Supplement relating to
the particular series of Preferred Stock) in a share of a particular series of
the Preferred Stock issued and deposited with a Depositary (as defined below).
See "DESCRIPTION OF DEPOSITARY SHARES" below.
ALT -7
<PAGE>
[ALTERNATE PAGE -- EQUITY]
The Preferred Stock ranks senior to the Common Stock as to the payment of
dividends and the distribution of assets on liquidation, dissolution and winding
up of the Corporation. The dividend and liquidation preference rights of the
Preferred Stock relative to the ESOP Preferred Stock or any future series of
preferred stock of the Corporation shall be set forth in the Prospectus
Supplement relating to the particular series of Preferred Stock offered thereby.
When issued in accordance with the terms of the Prospectus and the
applicable Prospectus Supplement, the Preferred Stock will be validly issued,
fully paid and nonassessable.
DIVIDENDS. When and as declared by the Board of Directors of the
Corporation, holders of the Preferred Stock will be entitled to receive
quarterly cash dividends at such rates and on such dates as will be set forth in
the applicable Prospectus Supplement. All dividends shall be paid out of funds
of NationsBank legally available for such purpose. Except as otherwise set forth
in the applicable Prospectus Supplement, no dividends shall be paid on other
shares of the Corporation, nor shall any shares of other capital stock of the
Corporation be redeemed, repurchased or otherwise acquired for any consideration
(or any moneys be paid into a sinking fund for the redemption of shares of such
stock) by the Corporation, if dividends on any series of Preferred Stock are in
arrears.
VOTING. Except as required by applicable law or as otherwise set forth in
the applicable Prospectus Supplement, the holders of Preferred Stock shall have
no voting rights with regard to matters submitted to a general vote of the
shareholders of the Corporation.
LIQUIDATION PREFERENCE. In the event of any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, the holders of
any series of Preferred Stock shall be entitled to receive, by reason of their
ownership thereof, after distributions to holders of any series or class of
capital stock of the Corporation as may be set forth in the applicable
Prospectus Supplement, an amount equal to the appropriate stated or liquidation
value of the shares of such series (as set forth in the applicable Prospectus
Supplement), plus an amount equal to accrued and unpaid dividends, if any,
through the date of such payment. If upon the occurrence of such event, the
assets and funds to be thus distributed among the holders of such Preferred
Stock shall be insufficient to permit the payment to such holders of the full
amount due, then the holders of such Preferred Stock shall share ratably in any
distribution of assets of the Corporation in proportion to the respective
amounts which otherwise would be payable with respect to the shares held by them
upon such distribution if all amounts payable on or with respect to such shares
were paid in full.
ESOP PREFERRED STOCK
THE FOLLOWING SUMMARY OF THE ESOP PREFERRED STOCK IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE DESCRIPTION OF SUCH SERIES OF PREFERRED STOCK
CONTAINED IN THE CORPORATION'S RESTATED ARTICLES OF INCORPORATION, AS AMENDED.
The ESOP Preferred Stock was first issued in the transaction by which
NationsBank was formed from the merger of NCNB Corporation and C&S/Sovran
Corporation in 1991 upon the conversion of shares of ESOP Convertible Preferred
Stock, Series C of C&S/Sovran Corporation. All shares are held by the trustee
under the NationsBank Corporation Retirement Savings Plan (the "ESOP").
Shares of ESOP Preferred Stock have no preemptive or preferential rights to
purchase or subscribe for shares of NationsBank capital stock of any class and
are not subject to any sinking fund or other obligation of NationsBank to
repurchase or retire the series, except as discussed below.
Each share of ESOP Preferred Stock is entitled to an annual dividend,
subject to certain adjustments, of $3.30 per share, payable semiannually. Unpaid
dividends accumulate as of the date on which they first became payable, without
interest. So long as any shares of ESOP Preferred Stock are outstanding, no
dividend may be declared, paid or set apart for payment on any other series of
stock ranking on a parity with the ESOP Preferred Stock as to dividends, unless
like dividends have been declared and paid, or set apart for payment, on the
ESOP Preferred Stock for all dividend payment periods ending on or before the
dividend payment date for such parity stock, ratably in proportion to their
respective amounts of accumulated and unpaid dividends. NationsBank generally
may not declare, pay or set apart for payment any dividends (except for, among
other things, dividends payable solely in shares of stock ranking junior to the
ESOP Preferred Stock as to dividends
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[ALTERNATE PAGE -- EQUITY]
or upon liquidation) on, make any other distribution on, or make payment on
account of the purchase, redemption or other retirement of, any other class or
series of NationsBank capital stock ranking junior to the ESOP Preferred Stock
as to dividends or upon liquidation, until full cumulative dividends on the ESOP
Preferred Stock have been declared and paid or set apart for payment when due.
The holder of the ESOP Preferred Stock is entitled to vote on all matters
submitted to a vote of the holders of Common Stock and votes together with the
holders of Common Stock as one class. Except as otherwise required by applicable
law, the holder of the ESOP Preferred Stock has no special voting rights. To the
extent that the holder of such shares is entitled to vote, each share is
entitled to the number of votes equal to the number of shares of Common Stock
into which such share of ESOP Preferred Stock could be converted on the record
date for determining the shareholders entitled to vote, rounded to the nearest
whole vote.
Shares of the ESOP Preferred Stock initially are convertible into Common
Stock at a conversion rate equal to 0.84 shares of Common Stock per share of
ESOP Preferred Stock and a conversion price of $42.50 per 0.84 shares of Common
Stock, subject to certain customary anti-dilution adjustments.
In the event of any voluntary or involuntary dissolution, liquidation or
winding-up of NationsBank, the holder of the ESOP Preferred Stock will be
entitled to receive out of the assets of NationsBank available for distribution
to shareholders, subject to the rights of the holders of any Preferred Stock
ranking senior to or on a parity with the ESOP Preferred Stock as to
distributions upon liquidation, dissolution or winding-up but before any amount
will be paid or distributed among the holders of Common Stock or any other
shares ranking junior to the ESOP Preferred Stock as to such distributions,
liquidating distributions of $42.50 per share plus all accrued and unpaid
dividends thereon to the date fixed for distribution. If, upon any voluntary or
involuntary dissolution, liquidation or winding-up of NationsBank, the amounts
payable with respect to the ESOP Preferred Stock and any other stock ranking on
a parity therewith as to any such distribution are not paid in full, the holder
of the ESOP Preferred Stock and such other stock will share ratably in any
distribution of assets in proportion to the full respective preferential amounts
to which they are entitled. After payment of the full amount of the liquidating
distribution to which it is entitled, the holder of the ESOP Preferred Stock
will not be entitled to any further distribution of assets by NationsBank.
Neither a merger or consolidation of NationsBank with or into any other
corporation, nor a merger or consolidation of any other corporation with or into
NationsBank nor a sale, transfer or lease of all or any portion of NationsBank's
assets, will be deemed to be a dissolution, liquidation or winding-up of
NationsBank.
The ESOP Preferred Stock is redeemable, in whole or in part, at the option
of NationsBank, at any time. The redemption price for the shares of the ESOP
Preferred Stock, which may be paid in cash or shares of Common Stock, will
depend upon the time of redemption. Specifically, the redemption price for the
12-month period that began on July 1, 1996 is $43.49 per share; on each
succeeding July 1, the redemption price will be reduced by $.33 per share,
except that on and after July 1, 1999, the redemption price will be $42.50 per
share. In each case, the redemption price also must include all accrued and
unpaid dividends to the date of redemption. To the extent that the ESOP
Preferred Stock is treated as Tier 1 capital for bank regulatory purposes, the
approval of the Federal Reserve Board may be required for redemption of the ESOP
Preferred Stock.
NationsBank is required to redeem shares of the ESOP Preferred Stock at the
option of the holder of such shares to the extent necessary either to provide
for distributions required to be made under the ESOP or to make payments of
principal, interest or premium due and payable on any indebtedness incurred by
the holder of the shares for the benefit of the ESOP. The redemption price in
such case will be the greater of $42.50 per share plus accrued and unpaid
dividends to the date of redemption or the fair market value of the aggregate
number of shares of Common Stock into which a share of ESOP Preferred Stock then
is convertible.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
NationsBank may, at its option, elect to offer fractional interests in the
Preferred Stock, rather than whole shares of such securities. In the event such
option is exercised, NationsBank will provide for the issuance by a Depositary
to the public of receipts of Depositary Shares, each of which will represent a
fractional interest in a
ALT -9
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[ALTERNATE PAGE -- EQUITY]
share of a particular series of the Preferred Stock, as set forth in the
Prospectus Supplement for such series of Preferred Stock.
Certain general terms and provisions of the form of Deposit Agreement (as
described below), the Depositary Shares and the form of Depositary Receipts to
which a Prospectus Supplement may relate are set forth below. The particular
terms of the Preferred Stock offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may apply to the Depositary
Shares will be described in the applicable Prospectus Supplement. The
descriptions below and in any Prospectus Supplement do not purport to be
complete and are subject to and qualified in their entirety by reference to the
Deposit Agreement and the Depositary Receipts, the forms of which are
incorporated by reference in the Registration Statement of which this Prospectus
is a part and the definitive forms of which will be filed with the Commission at
the time of sale of such Depositary Shares.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between NationsBank and a bank or trust company selected by
NationsBank having its principal office in the United States and having a
combined capital and surplus of at least $5,000,000 (the "Depositary"). The
applicable Prospectus Supplement will set forth the name and address of the
Depositary. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fractional
interest in a share of Preferred Stock underlying such Depositary Share, to all
the rights and preferences of the Preferred Stock underlying such Depositary
Share (including dividend, voting, redemption, conversion and liquidation
rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Depositary Receipts will be distributed to
those persons purchasing the fractional shares of the related series of
Preferred Stock in accordance with the terms of the offering as described in the
applicable Prospectus Supplement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of NationsBank, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Corporation's expense.
Upon the surrender of Depositary Receipts at the office of the Depositary
(unless the Depositary Shares have been previously called for redemption) and
upon payment by the holder of the charges provided in the Deposit Agreement and
subject to the terms thereof, a holder of Depositary Shares is entitled to have
the Depositary deliver to such holder the number of whole shares of the
Preferred Stock underlying the Depositary Shares evidenced by the surrendered
Depositary Receipts; PROVIDED, HOWEVER, that the holder of such shares of
Preferred Stock will not thereafter be entitled to receive Depositary Shares
therefor. If the Depositary Receipts delivered by the holder evidence a number
of Depositary Shares in excess of the number of Depositary Shares representing
the number of whole shares of the related series of Preferred Stock to be
withdrawn, the Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
number of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary, with the approval of
NationsBank, may sell such property and distribute the net proceeds from such
sale to such holders.
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REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 45 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever NationsBank redeems Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the number
of Depositary Shares relating to the Preferred Stock so redeemed. If less than
all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holder of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock held by the Depositary are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Depositary as to
the exercise of the voting rights pertaining to the amount of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of Preferred Stock underlying such
Depositary Shares in accordance with such instructions, and NationsBank will
agree to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will abstain from voting
Preferred Stock to the extent it does not receive specific instructions from the
holders of Depositary Shares relating to such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between NationsBank and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority in interest of the Depositary Shares then
outstanding. A Deposit Agreement may be terminated by NationsBank or the
Depositary only if (i) all outstanding Depositary Shares relating thereto have
been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock underlying such Depositary Shares in connection with any
liquidation, dissolution or winding up of NationsBank.
CHARGES OF DEPOSITARY
NationsBank will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. NationsBank
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from NationsBank which are delivered to the Depositary and
which NationsBank is required to furnish to the holders of the Preferred Stock.
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Neither the Depositary nor NationsBank will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of NationsBank and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their respective duties thereunder and neither entity will be obligated
to prosecute or defend any legal proceeding in respect of any Depositary Shares
or Preferred Stock unless satisfactory indemnity is furnished. Each entity may
rely upon written advice of counsel or accountants, or information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Shares or
other persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to NationsBank notice
of its election to do so, and NationsBank may at any time remove the Depositary,
any such resignation or removal to take effect only upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $5,000,000.
DESCRIPTION OF COMMON STOCK
THE FOLLOWING SUMMARY OF THE COMMON STOCK IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE DESCRIPTION OF THE COMMON STOCK INCORPORATED HEREIN BY
REFERENCE.
GENERAL
NationsBank is authorized to issue 800,000,000 shares of its Common Stock,
of which 288.1 million shares were outstanding as of September 30, 1996. The
Common Stock is traded on the New York Stock Exchange, Inc. and on The Pacific
Stock Exchange Incorporated under the symbol "NB." The Common Stock is also
listed on the London Stock Exchange, and certain shares are listed and traded on
the Tokyo Stock Exchange. As of September 30, 1996, 55.7 million shares were
reserved for issuance in connection with various employee and director benefit
plans of NationsBank and upon the conversion of the ESOP Preferred Stock, 2.8
million shares were reserved for issuance under the Corporation's Dividend
Reinvestment and Stock Purchase Plan and 110 million shares were reserved for
issuance in connection with the proposed merger of Boatmen's Bancshares, Inc.
into NB Holdings Corporation, a wholly owned subsidiary of NationsBank. After
taking into account the shares reserved as described above, approximately 343.4
million authorized shares of the Common Stock remained available for issuance
for other corporate purposes as of September 30, 1996.
VOTING AND OTHER RIGHTS
The holders of the Common Stock are entitled to one vote per share, and, in
general, a majority of votes cast with respect to a matter is sufficient to take
action upon routine matters. Directors are elected by a plurality of the votes
cast, and each shareholder entitled to vote in such election shall be entitled
to vote each share of stock for as many persons as there are directors to be
elected. In elections for directors, such shareholders do not have the right to
cumulate their votes, so long as the Corporation has a class of shares
registered under Section 12 of the 1934 Act (unless action is taken to provide
otherwise by charter amendment, which action management does not currently
intend to propose). In general, (i) amendments to the Corporation's Restated
Articles of Incorporation must be approved by each voting group entitled to vote
separately thereon by a majority of the votes cast by that voting group, unless
the amendment creates dissenters' rights for a particular voting group, in which
case such amendment must be approved by a majority of the votes entitled to be
cast by such voting group; (ii) a merger or share exchange required to be
approved by shareholders must be approved by each voting group entitled to vote
separately thereon by a majority of the votes entitled to be cast by that voting
group; and (iii) the dissolution of the Corporation, or the sale of all or
substantially all of the property of the Corporation other than in the usual and
regular course of business, must be approved by a majority of all votes entitled
to be cast thereon.
In the event of liquidation of the Corporation, holders of the Common Stock
would be entitled to receive pro rata any assets legally available for
distribution to shareholders with respect to shares held by them, subject to any
prior rights of any preferred stock then outstanding. See "DESCRIPTION OF
PREFERRED STOCK" above.
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The Common Stock does not have any preemptive rights, redemption
privileges, sinking fund privileges or conversion rights. All the outstanding
shares of the Common Stock are, and upon proper conversion of any Preferred
Stock all of the shares of Common Stock into which such shares are converted
will be, validly issued, fully paid and nonassessable.
Chase Mellon Shareholder Services, L.L.C. acts as transfer agent and
registrar for the Common Stock.
DISTRIBUTIONS
The holders of the Common Stock are entitled to receive such dividends or
distributions as the Board of Directors of the Corporation may declare out of
funds legally available for such payments. The payment of distributions by
NationsBank is subject to the restrictions of North Carolina law applicable to
the declaration of distributions by a business corporation. A corporation
generally may not authorize and make distributions if, after giving effect
thereto, it would be unable to meet its debts as they become due in the usual
course of business or if the corporation's total assets would be less than the
sum of its total liabilities plus the amount that would be needed, if it were to
be dissolved at the time of distribution, to satisfy claims upon dissolution of
shareholders who have preferential rights superior to the rights of the holders
of its common stock. In addition, the payment of distributions to shareholders
is subject to any prior rights of outstanding preferred stock, including the
ESOP Preferred Stock and any other series of Preferred Stock when and if issued
from time to time. See "DESCRIPTION OF PREFERRED STOCK." Share dividends, if any
are declared, may be paid from NationsBank's authorized but unissued shares.
The ability of NationsBank to pay dividends 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
"NATIONSBANK CORPORATION -- Supervision and Regulation."
LEGAL OPINIONS
The legality of the 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 50,000 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, 1995, 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.
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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 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 NATIONSBANC CAPITAL MARKETS, INC. NEITHER THE
DELIVERY OF THIS 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 DOES 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. THIS PROSPECTUS AND RELATED PROSPECTUS
SUPPLEMENTS ARE TO BE USED BY NATIONSBANC CAPITAL MARKETS, INC., A BROKER-DEALER
AND A DIRECT WHOLLY-OWNED SUBSIDIARY OF THE CORPORATION, IN CONNECTION WITH
OFFERS AND SALES RELATED TO SECONDARY MARKET TRANSACTIONS.
TABLE OF CONTENTS
<TABLE>
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PAGE
<S> <C>
PROSPECTUS
Incorporation of Certain Documents by
Reference.................................... 2
Available Information.......................... 2
NationsBank Corporation........................ 3
Use of Proceeds................................ 6
Ratios of Earnings to Combined Fixed Charges
and Preferred Stock Dividends................ 6
Plan of Distribution........................... 7
Description of Preferred Stock................. 7
Description of Depositary Shares............... 9
Description of Common Stock.................... 12
Legal Opinions................................. 13
Experts........................................ 13
</TABLE>
$3,000,000,000
(NationsBank Logo Goes Here)
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
PROSPECTUS
NATIONSBANC CAPITAL MARKETS, INC.
, 1996
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement for Debt Securities*
1.2 Form of Underwriting Agreement for Preferred Stock*
1.3 Form of Underwriting Agreement for Common Stock*
1.4 Form of Distribution Agreement for Medium-Term Notes, incorporated herein by reference to
Exhibit 1.4 of the Registrant's Registration Statement on Form S-3 (Registration No. 333-7229)
4.1 Indenture dated as of January 1, 1995 between NationsBank Corporation and BankAmerica National
Trust Company, as trustee, incorporated herein by reference to Exhibit 4.1 of the Registrant's
Registration Statement on Form S-3 (Registration No. 33-57533)
4.2 Successor Trustee Agreement effective December 15, 1995, between NationsBank Corporation and
First Trust Bank of New York, as successor trustee to BankAmerica National Trust Company,
incorporated herein by reference to Exhibit 4.2 of the Registrant's Registration Statement on
Form S-3 (Registration No. 333-7229)
4.3 Form of Senior Registered Note*
4.4 Form of Senior Medium-Term Note (Fixed Rate)*
4.5 Form of Senior Medium-Term Note (Floating Rate)*
4.6 Indenture dated as of January 1, 1995 between NationsBank Corporation and The Bank of New York,
as trustee, incorporated herein by reference to Exhibit 4.5 of the Registrant's Registration
Statement on Form S-3 (Registration No. 33-57533)
4.7 Form of Subordinated Registered Note*
4.8 Form of Subordinated Medium-Term Note (Fixed Rate)*
4.9 Form of Subordinated Medium-Term Note (Floating Rate)*
4.10 Form of Certificate for Preferred Stock, incorporated herein by reference to Exhibit 4.6 of the
Registrant's Registration Statement on Form S-3 (Registration No. 33-54784)
4.11 Form of Deposit Agreement, incorporated herein by reference to Exhibit 4.4 of the Registrant's
Registration Statement on Form S-3 (Registration No. 33-54784)
4.12 Form of Depositary Receipt, incorporated herein by reference to Exhibit 4.5 of the Registrant's
Registration Statement on Form S-3 (Registration No. 33-54784)
5.1 Opinion of Smith Helms Mulliss & Moore, L.L.P. regarding legality of securities being
registered*
12.1 Calculation of Ratios of Earnings to Fixed Charges, incorporated herein by reference to Exhibit
12(a) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996
(File No. 1-6523)
12.2 Calculation of Ratios of Earnings to Fixed Charges and Preferred Dividends, incorporated herein
by reference to Exhibit 12(b) to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996 (File No. 1-6523)
23.1 Consent of Smith Helms Mulliss & Moore, L.L.P. (included in Exhibit 5.1)
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Ernst & Young LLP
24.1 Power of Attorney*
24.2 Certified Resolutions*
25.1 Statement of Eligibility of Senior Trustee on Form T-1*
25.2 Statement of Eligibility of Subordinated Trustee on Form T-1*
99.1 Provisions of the North Carolina Business Corporation Act, as amended, relating to indemni-
fication of directors and officers, incorporated herein by reference to Exhibit 99.1 of the
Registrant's Registration Statement on Form S-3 (Registration No. 33-63097)
</TABLE>
* Previously filed.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Charlotte, North Carolina, on December
10, 1996.
NATIONSBANK CORPORATION
(REGISTRANT)
By: *HUGH L. MCCOLL, JR.
HUGH L. MCCOLL, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
*HUGH L. MCCOLL, JR. Chairman of the Board, Chief Executive December 10, 1996
Officer and Director (Principal
(HUGH L. MCCOLL, JR.) Executive Officer)
*JAMES H. HANCE, JR. Vice Chairman and Chief Financial Officer December 10, 1996
(Principal Financial Officer)
(JAMES H. HANCE, JR.)
*MARC D. OKEN Executive Vice President December 10, 1996
and Chief Accounting Officer
(MARC D. OKEN) (Principal Accounting
Officer)
*RONALD W. ALLEN Director December 10, 1996
(RONALD W. ALLEN)
*RAY C. ANDERSON Director December 10, 1996
(RAY C. ANDERSON)
*WILLIAM M. BARNHARDT Director December 10, 1996
(WILLIAM M. BARNHARDT)
Director , 1996
(THOMAS E. CAPPS)
*CHARLES W. COKER Director December 10, 1996
(CHARLES W. COKER)
*THOMAS G. COUSINS Director December 10, 1996
(THOMAS G. COUSINS)
*ALAN T. DICKSON Director December 10, 1996
(ALAN T. DICKSON)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
Director , 1996
(W. FRANK DOWD, JR.)
*PAUL FULTON Director December 10, 1996
(PAUL FULTON)
*TIMOTHY L. GUZZLE Director December 10, 1996
(TIMOTHY L. GUZZLE)
*W. W. JOHNSON Director December 10, 1996
(W. W. JOHNSON)
*JOHN J. MURPHY Director December 10, 1996
(JOHN J. MURPHY)
*JOHN C. SLANE Director December 10, 1996
(JOHN C. SLANE)
Director December 10, 1996
(O. TEMPLE SLOAN, JR.)
*JOHN W. SNOW Director December 10, 1996
(JOHN W. SNOW)
*MEREDITH R. SPANGLER Director December 10, 1996
(MEREDITH R. SPANGLER)
*ROBERT H. SPILMAN Director December 10, 1996
(ROBERT H. SPILMAN)
*RONALD TOWNSEND Director December 10, 1996
(RONALD TOWNSEND)
*E. CRAIG WALL, JR. Director December 10, 1996
(E. CRAIG WALL, JR.)
*JACKIE M. WARD Director December 10, 1996
(JACKIE M. WARD)
*VIRGIL R. WILLIAMS Director December 10, 1996
(VIRGIL R. WILLIAMS)
*By: /s/ CHARLES M. BERGER
CHARLES M. BERGER, ATTORNEY-IN-FACT
</TABLE>
II-3
<PAGE>
<PAGE>
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE LLP
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Amendment No. 1 to Form S-3
of NationsBank Corporation of our report dated January 12, 1996, which appears
on page 46 of the 1995 Annual Report to Shareholders of NationsBank Corporation,
which is incorporated by reference in NationsBank Corporation's Annual Report
on Form 10-K for the year ended December 31, 1995. We also consent to the
reference to us under the heading "EXPERTS" in such Prospectus.
PRICE WATERHOUSE LLP
Charlotte, North Carolina
December 10, 1996
<PAGE>
<PAGE>
Consent of Ernst & Young LLP
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement (Form S-3), No. 333-13811 and related prospectus of
NationsBank Corporation for the registration of $3,000,000,000 of debt and
equity securities of our report dated January 18, 1996 (except for the pooling
of interest with Fourth Financial Corporation as of January 31, 1996, and Note
3, for which the date is January 31, 1996) with respect to the supplemental
consolidated financial statements of Boatmen's Bancshares, Inc. for the three
years ended December 31, 1995 and 1994, and 1993 incorporated by reference in
NationsBank Corporation's Current Report on Form 8-K dated September 6, 1996
(as amended by Form 8-K/A-1 on September 11, 1996 and Form 8-K/A-2 on
November 13, 1996), as filed with the Securities and Exchange Commission.
(Signature of Ernst & Young LLP)
St. Louis, Missouri
December 9, 1996
