<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 17, 2001
REGISTRATION NO. 333-47222
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
BANK OF AMERICA CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 56-0906609
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BANK OF AMERICA CORPORATE CENTER, CHARLOTTE, NORTH CAROLINA 28255
(888) 279-3457
(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
BANK OF AMERICA CORPORATION
BANK OF AMERICA CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
(704) 386-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
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BOYD C. CAMPBELL, JR. JAMES R. TANENBAUM
SMITH HELMS MULLISS & MOORE, L.L.P. STROOCK & STROOCK & LAVAN LLP
201 NORTH TRYON STREET 180 MAIDEN LANE
CHARLOTTE, NORTH CAROLINA 28202 NEW YORK, NEW YORK 10038
</TABLE>
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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.
---------------------
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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<PAGE> 2
(BANK OF AMERICA LOGO)
$3,000,000,000 INTERNOTES(SM)
We may offer to sell our Bank of America Corporation InterNotes(SM) from time
to time. The specific terms of our InterNotes(SM) are set prior to the time of
sale and described in a separate supplement. You should read this prospectus and
that supplement carefully before you invest.
We may offer the notes through agents who purchase the notes as principal and
receive a concession. The maximum amount we expect to receive is from
$2,994,000,000 to $2,910,000,000, after paying agents concessions of between
$6,000,000 and $90,000,000. The agents are not required to sell any specific
amount of notes but will use their best efforts to sell the notes. We also may
offer the notes directly. We have not set a date for termination of our
offering.
The agents have advised us that from time to time they may purchase and sell
notes in the secondary market, but they are not obligated to make a market in
the notes and may suspend or completely stop that activity at any time. We do
not intend to list notes on any stock exchange.
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OUR NOTES ARE UNSECURED AND ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK. THE NOTES ARE NOT GUARANTEED BY BANK OF AMERICA, N.A. OR
ANY OTHER BANK, ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENTAL AGENCY AND INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL. POTENTIAL PURCHASERS OF THE NOTES ALSO SHOULD CONSIDER THE
INFORMATION SET FORTH IN "RISK FACTORS" ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION NOR THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS
APPROVED OR DISAPPROVED OF THESE NOTES OR PASSED ON THE ADEQUACY OR ACCURACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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JOINT LEAD MANAGERS AND LEAD AGENTS
BANC OF AMERICA SECURITIES LLC INCAPITAL, LLC
AGENTS
A. G. EDWARDS CHARLES SCHWAB & CO., INC.
EDWARD JONES MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES SALOMON SMITH BARNEY
Prospectus dated January , 2001.
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TABLE OF CONTENTS
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PAGE
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SUMMARY................................. 3
ABOUT THIS PROSPECTUS................... 5
RISK FACTORS............................ 5
BANK OF AMERICA CORPORATION............. 6
Business Segment Operations........... 6
Acquisitions and Sales................ 8
Outstanding Debt...................... 8
REGULATORY MATTERS...................... 8
Interstate Banking.................... 9
Changes in Regulations................ 10
Capital and Operational
Requirements....................... 10
Distributions......................... 11
Source of Strength.................... 11
USE OF PROCEEDS......................... 12
RATIOS OF EARNINGS TO FIXED CHARGES..... 12
DESCRIPTION OF NOTES.................... 12
Payment of Principal and Interest..... 13
Interest and Interest Rates........... 14
Payment of Interest................... 14
Redemption and Repayment.............. 14
Survivor's Option..................... 15
</TABLE>
<TABLE>
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PAGE
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Subordination......................... 17
Sale or Issuance of Capital Stock of
Principal Subsidiary Bank.......... 17
Waiver of Covenants................... 18
Modification of the Indentures........ 18
Meetings and Action by Noteholders.... 18
Defaults and Rights of Acceleration... 18
Collection of Indebtedness............ 19
Notices............................... 19
Concerning the Trustees............... 19
REGISTRATION AND SETTLEMENT............. 19
The Depository Trust Company.......... 19
Registration, Transfer and Payment of
Certificated Notes................. 22
TAX CONSEQUENCES TO U.S. HOLDERS........ 22
PLAN OF DISTRIBUTION.................... 25
WHERE YOU CAN FIND MORE INFORMATION..... 26
FORWARD-LOOKING STATEMENTS.............. 27
LEGAL OPINIONS.......................... 27
EXPERTS................................. 27
</TABLE>
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InterNotes(SM) is a Service Mark of Integrated Holdings, LLC
2
<PAGE> 4
SUMMARY
This section summarizes the legal and financial terms of the notes that are
described in more detail in "Description of Notes" beginning on page 12. Final
terms of any particular notes are set at the time of sale and are contained in
the supplement relating to those notes. That supplement may vary from and
supersede the terms contained in this Summary. In addition, you should read the
more detailed information appearing elsewhere in this prospectus and in the
supplement.
Issuer................... Bank of America Corporation, Bank of America
Corporate Center, Charlotte, North Carolina 28255;
phone: (888) 279-3457.
Purchasing Agent......... Incapital, LLC
Joint Lead Managers and
Lead Agents.............. Banc of America Securities LLC and Incapital, LLC
Agents................... A.G. Edwards & Sons, Inc.
Charles Schwab & Co., Inc.
Edward D. Jones & Co., L.P.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Salomon Smith Barney Inc.
Title of Notes........... Bank of America Corporation InterNotes(SM)
Affiliates............... Bank of America Corporation is the indirect parent of
Banc of America Securities LLC, one of the Agents,
and, through a subsidiary, owns a significant equity
interest in Integrated Holdings, LLC, the parent of
Incapital, LLC, the Purchasing Agent. Additional
details of these relationships are disclosed in "Plan
of Distribution" on page 25.
Amount................... We may issue up to $3,000,000,000 of notes in
connection with this prospectus. There are no
limitations on our ability to issue additional
indebtedness in the form of InterNotes(SM) or
otherwise.
Denominations............ The notes will be issued and sold in denominations of
$1,000 and multiples of $1,000 (unless otherwise
stated in the supplement).
Status................... The notes are our direct unsecured obligations. Each
supplement states whether the notes are senior or
subordinated debt. Senior notes rank equally with our
other unsecured senior debt and subordinated notes
rank equally with our other unsecured subordinated
debt and junior in right of payment to our senior
debt.
Although we are a bank holding company, the notes are
not savings accounts or deposits in our banking
subsidiaries and are not insured or guaranteed by the
FDIC or any other government agency.
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<PAGE> 5
Holders of Subordinated
Notes have Limited
Rights................... Payment of principal of our subordinated notes may
not be accelerated if there is a default in the
payment of principal or any premium or interest or
the performance of any of our other Indenture
covenants.
Maturities............... The notes are due nine months or more from the date
of issue.
Interest................. - Each note bears interest from the issue date at a
fixed rate per annum;
- Interest on each note is payable either monthly,
quarterly, semi-annually or annually on each
interest payment date and on the maturity date.
Interest also will be paid on the date of
redemption or repayment if a note is redeemed or
repurchased prior to maturity; and
- Interest on the notes is computed on the basis of a
360-day year of twelve 30-day months.
Principal................ The principal amount of the notes is payable on the
maturity date at the corporate trust office of the
paying agent or at any other place we may designate.
Redemption and Repayment. - Unless stated in the applicable supplement, the
notes are not redeemable at our option or repayable
at the option of the holder prior to the maturity
date; and
- The notes are unsecured and not subject to any
sinking fund.
Survivor's Option........ Specific notes may contain a provision permitting the
optional redemption of those notes prior to maturity
upon the death of a purchaser holding the notes for
at least six months prior to the holder's death. Your
notes may not be redeemed unless that right is
specified in the supplement for your notes. The right
to exercise the Survivor's Option is subject to
limits set by us on the permitted dollar amount of
total exercises by holders of notes in any calendar
year. Additional details of this right are described
in the section entitled "Survivor's Option" on page
15.
Sale and Clearance....... We will sell notes in the United States only. Notes
are issued in book-entry only form and clear through
The Depository Trust Company. We do not intend to
issue notes in certificated form.
Trustee.................. The Trustee for senior and subordinated notes is The
Bank of New York, 101 Barclay Street, 21 West, New
York, New York 10286, under separate restated
Indentures, each dated as of January 1, 2001.
Selling Group............ The agents and dealers comprising the selling group
are broker-dealers and securities firms. The agents,
including the Purchasing Agent, have entered into a
Selling Agent Agreement with us. Dealers who are
members of the selling group have executed a Master
Selected Dealer Agreement with the Purchasing Agent.
The agents and the dealers have agreed to market and
sell the notes in accordance with the terms of those
respective agreements and all other applicable laws
and regulations. You may call the Purchasing Agent at
1-877-284-2663 for a list of selling group members.
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ABOUT THIS PROSPECTUS
---------------------------------------------------------
This document is a prospectus and is part of a registration statement that we
filed with the SEC using a "shelf" registration or continuous offering process.
This prospectus provides you with a general description of the notes we may
offer in connection with the Bank of America Corporation InterNotes(SM) program.
Using this shelf process, we may from time to time sell these InterNotes(SM) in
various offerings up to a total dollar amount of $3,000,000,000. While we have
various notes and other evidence of indebtedness outstanding, references in this
prospectus to "notes" are to the Bank of America Corporation InterNotes(SM).
The specific terms and conditions of notes being offered will be contained in
a pricing supplement or a prospectus supplement. A copy of that supplement will
be provided to you along with a copy of this prospectus. That supplement also
may add, update or change information in this prospectus. If there is any
inconsistency between the information in this prospectus and the supplement, you
should rely on the information in the supplement. You should read both this
prospectus and the supplement together with the additional information that is
incorporated by reference in this prospectus. That additional information is
described under the heading "Where You Can Find More Information" beginning on
page 26 of this prospectus.
You should rely only on the information provided in this prospectus and the
supplement, including the information incorporated by reference. Neither we, nor
any dealers or agents, have authorized anyone to provide you with different
information. We are not offering the notes in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate at any date other than the date indicated on the cover
page of those documents.
Unless otherwise indicated or unless the context requires otherwise,
references in this prospectus to "we," "us," "our," or similar references mean
Bank of America Corporation.
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RISK FACTORS
---------------------------------------------------------
Your investment in the notes will involve certain risks. This prospectus does
not describe all of those risks. Neither we nor the agents are responsible for
advising you of these risks now or as they may change in the future.
In consultation with your own financial and legal advisors, you should
carefully consider, among other matters, the following discussion of risks
before deciding whether an investment in the notes is suitable for you. The
notes are not an appropriate investment for you if you are not knowledgeable
about the significant elements of the notes or financial matters in general. You
should not purchase notes unless you understand and know you can bear these
investment risks.
Redemption -- We may choose to redeem notes when prevailing interest rates are
relatively low.
If your notes are redeemable at our option, we may choose to redeem your notes
from time to time. Prevailing interest rates at the time we redeem your notes
would likely be lower than the rate borne by the notes as of their original
issue date. In such a case you would not be able to reinvest the redemption
proceeds in a comparable security at an effective interest rate as high as the
interest rate on the notes being redeemed. Our redemption right also may
adversely impact your ability to sell your notes as our redemption date
approaches.
Uncertain Trading Markets -- We cannot assure that a trading market for your
notes will ever develop or be maintained.
In making your evaluation of the notes, you should assume that you will be
holding the notes until their maturity. We cannot assure you that a trading
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<PAGE> 7
market for your notes will ever develop or be maintained. Many factors
independent of our creditworthiness affect the trading market and market value
of your notes. Those factors include, without limitation:
- the method of calculating the principal and interest for the notes;
- the time remaining to the maturity of the notes;
- the outstanding amount of the notes;
- the redemption or repayment features of the notes;
- market rates of interest higher than rates borne by the notes; and
- the level, direction and volatility of interest rates generally.
There may be a limited number of buyers when you decide to sell your notes.
This may affect the price you receive for your notes or your ability to sell
your notes at all.
Subordinated notes have limited acceleration rights.
The holders of senior notes may declare those notes in default and accelerate
the due date of those notes. Holders of subordinated notes do not have that
right and may accelerate payment of indebtedness only upon our bankruptcy.
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BANK OF AMERICA CORPORATION
---------------------------------------------------------
Bank of America Corporation is a Delaware corporation and a bank holding
company. Our principal assets are the shares of stock of Bank of America, N.A.
and the other banking and nonbanking subsidiaries that we own. Through those
subsidiaries, we provide a diversified range of banking and nonbanking financial
services and products primarily throughout the Mid-Atlantic, Midwest, Southeast,
Southwest, Northwest and West regions of the United States and in selected
international markets.
We, and our subsidiaries, are subject to supervision by various United States
federal and state banking and other regulatory authorities. See "Regulatory
Matters" on page 8.
BUSINESS SEGMENT OPERATIONS
We report the results of our operations through four business segments: (1)
Consumer and Commercial Banking, (2) Asset Management, (3) Global Corporate and
Investment Banking and (4) Equity Investments.
The major components of our Consumer and Commercial Banking segment are
Banking Regions, Consumer Products and Commercial Banking.
- Banking Regions
Banking Regions serves approximately 30 million consumer households in 21
states and the District of Columbia and overseas through our extensive network
of over 4,500 banking centers, 14,000 ATM's, telephone and Internet channels
on www.bankofamerica.com. Banking Regions provides a wide array of products
and services, including deposit products such as checking, money market
savings accounts, time deposits and IRA's and credit products such as home
equity, personal auto loans and auto leasing. Banking Regions also includes
small business banking providing treasury management, credit services,
community investment, debit card, e-commerce and brokerage services to over 2
million small business relationships across the franchise.
- Consumer Products
Consumer Products provides specialized services such as the origination and
servicing of residential mortgage loans, issuance and servicing of credit
cards, direct banking via the telephone and the Internet, student lending and
certain insurance services. Consumer Products also provides consumer home
equity and auto loans, retail finance
6
<PAGE> 8
programs to dealerships and lease financing of new
and used cars.
- Commercial Banking
Commercial Banking provides commercial lending and treasury management
services to middle market companies with annual revenue between $10 million
and $500 million. These services are available through relationship manager
teams as well as through alternative channels such as the telephone via the
commercial service center and the Internet by accessing Bank of America
Direct(TM).
Our Asset Management segment includes the Private Bank, Banc of America
Capital Management and Banc of America Investment Services, Inc.
- Private Bank
The Private Bank offers financial solutions to high-net-worth clients and
foundations in the United States and internationally by providing customized
asset management and credit, financial advisory, fiduciary, trust and banking
services.
- Banc of America Capital Management
Banc of America Capital Management, offering management of equity, fixed
income, cash and alternative investments, manages the assets of individuals,
corporations, municipalities, foundations and universities, and public and
private institutions; and provides advisory services to our affiliated family
of mutual funds.
- Banc of America Investment Services, Inc.
Banc of America Investment Services, Inc. provides both full-service and
discount brokerage services through investment professionals located
throughout the franchise and a brokerage web site that provides customers a
wide array of market analyses, investment research and self-help tools,
account information and transaction capabilities.
Our Global Corporate and Investment Banking segment provides a broad array of
financial products such as investment banking, trade finance, treasury
management, capital markets, leasing and financial advisory services to domestic
and international corporations, financial institutions and government entities.
Clients are supported through offices in 37 countries in four distinct
geographic regions: United States and Canada; Asia; Europe, Middle East and
Africa; and Latin America. Products and services provided include loan
origination, mergers and acquisitions advisory, debt and equity underwriting and
trading, cash management, derivatives, foreign exchange, leasing, leveraged
finance, project finance, real estate finance, senior bank debt, structured
finance and trade services. Our Global Corporate and Investment Banking segment
offers clients a comprehensive range of global capabilities through four
components: Global Credit Products, Global Capital Raising, Global Markets and
Global Treasury Services.
- Global Credit Products
Global Credit Products provides credit and lending services and includes the
corporate industry-focused portfolio, real estate, leasing and project
finance.
- Global Capital Raising
Global Capital Raising houses our investment banking activities. Through a
separate subsidiary, Bank of America Securities LLC, Global Capital Raising
underwrites and makes markets in equity securities, high-grade and high-yield
corporate debt securities, commercial paper, and mortgage-backed and
asset-backed securities. Bank of America Securities LLC also provides
correspondent clearing services for other securities broker/dealers, offers
traditional brokerage service to high-net-worth individuals, provides
prime-brokerage services and makes markets in equity derivatives. Debt and
equity securities research, loan syndications, mergers and acquisitions
advisory services, private placements and equity derivatives are also provided
through Banc of America Securities LLC.
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<PAGE> 9
- Global Markets
Global Markets provides business solutions for a global customer base using
interest rate derivatives, foreign exchange products, commodity derivatives
and mortgage-related products. In support of these activities the businesses
will take positions in these products and capitalize on market-making
activities. The Global Markets business also takes an active role in the
trading of fixed income securities in all of the regions in which Global
Corporate and Investment Banking transacts business and is a primary dealer in
the United States as well as in several international locations.
- Global Treasury Services
Global Treasury Services provides the technology, strategies and integrated
solutions to help financial institutions, government agencies and public and
private companies of all sizes manage their operations and cash flows on a
local, regional, national and global level.
Our Equity Investments segment includes Principal Investing, which is
comprised of a diversified portfolio of companies at all stages of the business
cycle, from start-up to buyout. Investments are made on both a direct and
indirect basis in the United States and overseas. Direct investing activity
focuses on playing an active role in the strategic and financial direction of
the portfolio company as well as providing broad business experience and access
to our global resources. Indirect investments represent passive limited
partnership stakes in funds managed by experienced third party private equity
investors who act as general partners. Equity Investments also includes our
strategic technology and alliances investment portfolio in addition to other
parent company investments.
ACQUISITIONS AND SALES
As part of our operations, we regularly evaluate the potential acquisition of,
and hold discussions with, various financial institutions and other businesses
of a type eligible for bank holding company or financial holding company
ownership or control. In addition, we regularly analyze the values of, and
submit bids for, the acquisition of customer-based funds and other liabilities
and assets of such financial institutions and other businesses. We also
regularly consider the potential disposition of certain of our assets, branches,
subsidiaries or lines of businesses. As a general rule, we publicly announce any
material acquisitions or dispositions when a definitive agreement has been
reached.
OUTSTANDING DEBT
At September 30, 2000, we had the following debt outstanding (in millions):
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Senior debt
Bank of America Corporation......... $22,115
Subsidiaries........................ 29,441
-------
Total senior debt................ 51,556
-------
Subordinated debt
Bank of America Corporation......... 17,248
Subsidiaries........................ 608
-------
Total subordinated debt.......... 17,856
-------
Total long-term debt............. $69,412
=======
Guaranteed Preferred Beneficial
Interests in Junior Subordinated
Notes............................... $ 4,955
-------
Total....................... $74,367
=======
</TABLE>
As of September 30, 2000, we had $9.9 billion of commercial paper and other
short-term notes payable outstanding.
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REGULATORY MATTERS
---------------------------------------------------------
The following discussion describes elements of an extensive regulatory
framework applicable to bank holding companies, financial holding companies and
banks and specific information about us and our subsidiaries. Federal regulation
of banks, bank holding companies and financial holding companies is intended
primarily for the protection of depositors
8
<PAGE> 10
and the Bank Insurance Fund rather than for the protection of stockholders,
creditors or noteholders.
As a registered bank holding company and, effective March 11, 2000, a
financial holding company under the Gramm-Leach-Bliley Act, we are subject to
the supervision of, and to regular inspection by, the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"). Our banking subsidiaries
are organized predominantly as national banking associations, which are subject
to regulation, supervision and examination by the Office of the Comptroller of
the Currency (the "Comptroller" or "OCC"), Federal Deposit Insurance Corporation
(the "FDIC") and other federal and state regulatory agencies. In addition to
banking laws, regulations and regulatory agencies, we and our 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 our operations and management and our ability to make distributions to
stockholders.
A financial holding company, and the companies under its control, are
permitted to engage in activities considered "financial in nature" as defined by
the Gramm-Leach-Bliley Act and Federal Reserve Board interpretations (including,
without limitation, insurance and securities activities), and, therefore, may
engage in a broader range of activities than permitted for bank holding
companies and their subsidiaries. A financial holding company may directly or
indirectly engage in activities considered financial in nature, either de novo
or by acquisition, provided the financial holding company gives the Federal
Reserve Board after-the-fact notice of the new activities. The
Gramm-Leach-Bliley Act also permits national banks, such as our bank
subsidiaries, to engage in activities considered financial in nature through a
financial subsidiary, subject to certain conditions and limitations and with the
prior approval of the Comptroller.
INTERSTATE BANKING
Bank holding companies (including bank holding companies that also are
financial holding companies) also are required 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, a bank holding company may acquire banks in states other than its
home state without regard to the permissibility of such acquisitions 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, before or after 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% or
such lesser or greater amount set by state law, of such deposits in that state.
Subject to certain restrictions, the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 also authorizes banks to merge across state
lines to create interstate branches. The Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 also permits a bank to open new branches in a
state in which it does not already have banking operations if such state enacts
a law permitting de novo branching. We have consolidated our retail subsidiary
banks into a single interstate bank, Bank of America, N.A., headquartered in
Charlotte, North Carolina, with full service branch offices in 21 states and the
District of Columbia. In addition, we operate a limited purpose nationally
chartered credit card bank, Bank of America, N.A. (USA), headquartered in
Phoenix, Arizona, a nationally chartered banker's bank, Bank of America Oregon,
N.A., headquartered in Portland, Oregon, and a California-chartered nonmember
bank, Bank of America Community
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Development Bank, headquartered in Walnut Creek, California.
CHANGES IN REGULATIONS
Proposals to change the laws and regulations governing the banking industry
are frequently introduced in Congress, in the state legislatures and before the
various bank regulatory agencies. The likelihood and timing of any proposals or
legislation and the impact they might have on us and our subsidiaries cannot be
determined at this time.
CAPITAL AND OPERATIONAL REQUIREMENTS
The Federal Reserve Board, the Comptroller and the FDIC have issued
substantially similar risk-based and leverage capital guidelines applicable to
United States banking organizations. In addition, these 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
three-tier capital framework. Tier 1 capital consists of common and qualifying
preferred shareholders' equity, less certain intangibles and other adjustments.
Tier 2 capital consists of preferred stock not qualifying as Tier 1 capital,
subordinated and other qualifying debt, and the allowance for credit losses up
to 1.25% of risk-weighted assets. Tier 3 capital includes subordinated debt that
is unsecured, fully paid, has an original maturity of at least two years, is not
redeemable before maturity without prior approval by the Federal Reserve and
includes a lock-in clause precluding payment of either interest or principal if
the payment would cause the issuing bank's risk-based capital ratio to fall or
remain below the required minimum. 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%. Our Tier 1 and
total risk-based capital ratios under these guidelines at September 30, 2000
were 7.32% and 10.80%, respectively. At September 30, 2000, we did not have any
subordinated debt that qualified as Tier 3 capital.
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 least 100 to 200 basis points
above 3%. Our leverage ratio at September 30, 2000 was 6.06%. We meet our
leverage ratio requirement.
The Federal Deposit Insurance Corporation Improvement Act of 1991, 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. This act 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
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<PAGE> 12
general unsecured creditors. In addition, this act 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 this act, 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 risk-based capital ratio of at least 6%, a total risk-based
capital ratio of at least 10% and a leverage ratio of at least 5% and not be
subject to a capital directive order. Under these guidelines, each of our
banking subsidiaries is considered well capitalized.
Banking agencies have also adopted final regulations which mandate that
regulators take into consideration (a) concentrations of credit risk; (b)
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; and (c) risks from non-traditional activities, as
well as an institution's ability to manage those risks, when determining the
adequacy of an institution's capital. That evaluation will be made as a part of
the institution's regular safety and soundness examination. In addition, the
banking agencies have amended their regulatory capital guidelines to incorporate
a measure for market risk. In accordance with the amended guidelines, we and any
of our banking subsidiaries with significant trading activity must incorporate a
measure for market risk in our regulatory capital calculations effective for
reporting periods after January 1, 1998. The revised guidelines did not have a
material impact on us or our banking subsidiaries' regulatory capital ratios or
our well capitalized status.
DISTRIBUTIONS
Our funds for cash distributions to our stockholders are derived from a
variety of sources, including cash and temporary investments. The primary source
of these funds and funds used to pay principal and interest on our indebtedness,
such as the notes, however, is dividends received from our banking subsidiaries.
Each of our banking subsidiaries is subject to various regulatory policies and
requirements relating to the payment of dividends, including requirements to
maintain capital above regulatory minimums. The appropriate federal regulatory
authority is authorized to determine under certain circumstances relating to the
financial condition of a bank or bank holding company that the payment of
dividends would be an unsafe or unsound practice and to prohibit payment
thereof.
In addition, our ability, and the ability of our banking subsidiaries, to pay
dividends may be affected by the various minimum capital requirements and the
capital and non-capital standards established under the Federal Deposit
Insurance Corporation Improvement Act of 1991, as described above. Our right,
and the right of our stockholders and creditors, to participate in any
distribution of the assets or earnings of our 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. Similarly,
under the cross-guarantee provisions of the Federal Deposit Insurance Act, in
the event of a loss suffered or anticipated by the
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<PAGE> 13
FDIC -- either as a result of default of a banking subsidiary or related to FDIC
assistance provided to a subsidiary in danger of default the other banking
subsidiaries may be assessed for the FDIC's loss, subject to certain exceptions.
---------------------------------------------------------
USE OF PROCEEDS
---------------------------------------------------------
Unless we describe a different use in a supplement, we will use net proceeds
from the sale of the notes for general corporate purposes. General corporate
purposes include:
- our working capital needs;
- investments in, or extensions of credit to, our banking and nonbanking
subsidiaries;
- the possible acquisitions of other financial institutions or their assets or
liabilities;
- the possible acquisitions of or investments in other businesses of a type we
are eligible to acquire; and
- the possible reduction of outstanding indebtedness or the repurchase of our
outstanding equity securities.
Until we designate the use of these net proceeds, we will temporarily invest
them. We may, from time to time, engage in additional capital financings as we
determine appropriate based on our needs and prevailing market conditions. These
additional capital financings may include the sale of other notes and
securities.
---------------------------------------------------------
RATIOS OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
Our consolidated ratio of earnings to fixed charges for each of the years in
the five year period ended December 31, 1999 and for the nine months ended
September 30, 2000 are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, NINE MONTHS
-------------------------------- ENDED
1995 1996 1997 1998 1999 SEPTEMBER 30, 2000
---- ---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C>
Excluding interest on deposits
2.3 2.3 2.2 1.8 2.2 1.9
Including interest on deposits
1.5 1.5 1.5 1.4 1.6 1.5
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing (a)
earnings before income taxes and fixed charges less (b) equity in undistributed
earnings of unconsolidated subsidiaries by fixed charges.
Fixed charges consist of:
- interest expense
- 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 lease commitments.
---------------------------------------------------------
DESCRIPTION OF NOTES
---------------------------------------------------------
Our senior notes are issued under a restated indenture dated as of January 1,
2001 (the "Senior Indenture") between us and The Bank of New York, and our
subordinated notes are issued under a restated indenture dated as of January 1,
2001 (the "Subordinated Indenture," and together with the Senior Indenture, the
"Indentures") between us and The Bank of New York. The statements in this
prospectus and the related supplements concerning the notes and the Indentures
are not complete and are subject to, and qualified in their entirety by, the
provisions of the Indentures, including the definitions of certain terms.
Whenever we refer to particular provisions of the Indentures or the defined
terms contained in the Indentures, those provisions and defined terms are
incorporated in this prospectus by
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<PAGE> 14
reference. The Indentures do not limit the amount of additional indebtedness
that we may incur. Accordingly, without the consent of the holders of the notes,
we may issue additional indebtedness under the Indentures in excess of the
$3,000,000,000 initial offering price of the notes offered by this prospectus.
Notes issued in accordance with this prospectus and a related supplement will
have the following general characteristics:
- The notes are our direct unsecured obligations. Each supplement states
whether the notes are senior or subordinated debt. Senior notes rank equally
with all of our other unsecured senior debt and subordinated notes rank
equally with all of our other unsecured subordinated debt and junior in
right of payment to our senior debt.
- The notes may be offered from time to time by us through the Purchasing
Agent and will mature on any day nine months or more from the issue date.
Each note will bear interest from the issue date at a fixed rate per annum.
- The notes are not subject to any sinking fund.
- The minimum denomination of the notes will be $1,000 and multiples of $1,000
(unless otherwise stated in the supplement).
In addition, the supplement relating to each offering of notes will describe
specific terms of the notes, including:
- the price, which may be expressed as a percentage of the aggregate initial
public offering price of the note, at which the note will be issued to the
public;
- the date on which the note will be issued to the public;
- the maturity date of the note;
- the rate per annum at which the note will bear interest;
- the interest payment frequency;
- the purchase price, Purchasing Agent's concession and net proceeds to us;
- whether the authorized representative of the holder of a beneficial interest
in the note will have the right to seek repayment upon the death of the
purchaser as described under "Survivor's Option" on page 15;
- if the note may be redeemed at our option or repaid at the option of the
holder prior to its maturity date and the provisions relating to such
redemption or repayment;
- any special United States Federal income tax consequences of the purchase,
ownership and disposition of the note; and
- any other terms of the note not inconsistent with the provisions of the
applicable Indenture.
PAYMENT OF PRINCIPAL AND INTEREST
Principal of, premium, if any, and interest in the notes will be paid to
owners of a beneficial interest in the notes in accordance with the arrangements
then in place between the paying agent and the Depositary and its participants
as described under "Registration and Settlement" on page 19. Interest on each
note will be payable either monthly, quarterly, semiannually or annually on each
interest payment date and at maturity or on the date of redemption or repayment
if a note is redeemed or repaid prior to maturity. Interest is payable to the
person in whose name a note is registered at the close of business on the
regular record date before each interest payment date. Interest payable at
maturity, on a date of redemption or repayment or in connection with the
exercise of a Survivor's Option is payable to the person to whom principal is
payable.
We will pay any administrative costs imposed by banks in connection with
making payments in immediately available funds, but any tax, assessment or
governmental charge imposed upon payments, including, without limitation, any
withholding tax, is the responsibility of the holders of a beneficial interest
in
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<PAGE> 15
the notes in respect of which such payments are made.
INTEREST AND INTEREST RATES
Each note will begin to accrue interest on its issue date. The applicable
supplement will specify a fixed interest rate per annum payable monthly,
quarterly, semi-annually or annually. Interest on the notes is computed on the
basis of a 360-day year of twelve 30-day months. If the maturity date or an
interest payment date for any note is not a Business Day, principal, premium, if
any, and interest for that note is paid on the next Business Day, and no
interest will accrue from, and after, the maturity date or interest payment
date.
PAYMENT OF INTEREST
Interest on the notes will be paid as follows:
<TABLE>
<CAPTION>
Interest Payment
Frequency Interest Payment Dates
<S> <C>
Monthly........ Fifteenth day of each
calendar month, beginning in
the first calendar month
following the month the note
was issued.
Quarterly...... Fifteenth day of every third
month, beginning in the
third calendar month
following the month the note
was issued.
Semi-annual.... Fifteenth day of every sixth
month, beginning in the
sixth calendar month
following the month the note
was issued.
Annual......... Fifteenth day of every
twelfth month, beginning in
the twelfth calendar month
following the month the note
was issued.
</TABLE>
The regular record date for any interest payment date is the first day of the
calendar month in which the interest payment date occurs, except that the
regular record date for the final interest payment date is the final interest
payment date.
Interest on a note will be payable beginning on the first interest payment
date after its issue date to holders of record on the corresponding regular
record date. If interest is payable on a day which is not a Business Day,
payment will be postponed to the next Business Day and no additional interest
will accrue as a result of such delayed payment.
"Business Day" means, with respect to any note, unless the supplement relating
to that note states otherwise, any weekday that is (1) not a legal holiday in
New York, New York or Charlotte, North Carolina and (2) not a day on which
banking institutions in those cities are authorized or required by law or
regulation to be closed.
REDEMPTION AND REPAYMENT
Unless we otherwise provide in the applicable supplement, the notes are not
redeemable or repayable prior to the maturity date.
If the supplement states that the note is redeemable at our option prior to
its maturity date, then, we may redeem any of those notes either in whole or
from time to time in part, upon not less than 30 nor more than 60 days' notice
to DTC as the holder of the note on such date or dates specified in the
supplement.
If the supplement states that your note is repayable at your option prior to
its maturity date, we will require receipt of notice of the request for
prepayment at least 30 but not more than 60 days prior to the date or dates
specified in the supplement. We also must receive the completed form entitled
"Option to Elect Repayment."
Exercise of the repayment option by the holder of a note is irrevocable. The
Depositary's nominee is considered the holder of the notes and therefore will be
the only entity that can exercise that right to repayment. See "Registration and
Settlement" on page 19.
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<PAGE> 16
To ensure that the Depositary's nominee will timely exercise a right to
repayment with respect to a particular beneficial interest in a note, the
beneficial owner of such interest must instruct the broker or other direct or
indirect participant through which it holds a beneficial interest in the note to
notify the Depositary of its desire to exercise a right to repayment. Because
different firms have different cut-off times for accepting instructions from
their customers, each beneficial owner should consult the broker or other direct
or indirect participant through which it holds an interest in a note to
determine the cut-off time by which the instruction must be given for timely
notice to be delivered to the Depositary. Conveyance of notices and other
communications by the Depositary to participants, by participants to indirect
participants and by participants and indirect participants to beneficial owners
of the notes will be governed by agreements among them and any applicable
statutory or regulatory requirements.
The actual redemption or repayment normally will occur on the interest payment
date or dates following receipt of a valid notice. Unless otherwise specified in
the supplement, the redemption or repayment price will equal 100% of the
principal amount of the note plus accrued interest to the date or dates of
redemption or repayment.
We may at any time purchase notes, including those otherwise tendered for
repayment by a holder, or holder's duly authorized representative, pursuant to
the Survivor's Option described in the next paragraph, at any price or prices in
the open market or otherwise. If we purchase the notes in this manner, we have
the discretion to either hold, resell or surrender the notes to the Trustee for
cancellation.
SURVIVOR'S OPTION
The "Survivor's Option" is our agreement with the purchaser of a note to
repurchase that note, if requested, upon the death of the purchaser occurring at
least six months after the purchaser purchased the note. The supplement relating
to any note will state whether the estate of the deceased holder of a beneficial
interest in the note will have the Survivor's Option; notes held for less than
six months at the purchaser's date of death are not eligible for repurchase by
exercise of the Survivor's Option.
If the Survivor's Option is exercised, we will, at our option, either repay or
purchase any note, in whole or in part, that is properly tendered for repayment
by or on behalf of the person that has authority to act on behalf of the
deceased owner of the note, at a price equal to 100% of the principal amount of
the beneficial interest of the deceased owner in the note plus accrued interest
to the date of repayment.
We have the discretionary right to limit the aggregate principal amount of
notes as to which exercises of the Survivor's Option shall be accepted from all
holders in any calendar year to an amount equal to the greater of $1,000,000 or
1% of the outstanding principal amount of all notes outstanding as of the end of
the most recent calendar year. We also have the discretionary right to limit to
$200,000 in any calendar year the aggregate principal amount of acceptances of
exercise of the Survivor's Option in such calendar year for any individual
deceased holder. In addition, we will not permit the exercise of the Survivor's
Option for an amount less than $1,000 or that will result in a note with a
principal amount of less than $1,000 to remain outstanding.
An otherwise valid election to exercise the Survivor's Option may not be
withdrawn. Each election to exercise the Survivor's Option will be accepted in
the order received by the Trustee, except for any note the acceptance of which
would contravene the restrictions described above. Notes accepted for repayment
pursuant to exercise of the Survivor's Option normally will be repaid on the
first interest payment date that occurs 20 or more calendar days after the date
of the acceptance. Each note submitted for repayment that is not accepted in any
15
<PAGE> 17
calendar year due to the application of the limitations described in the
preceding paragraph will be deemed to be tendered in the following calendar year
in the order in which all such notes were originally tendered. If a note
submitted for repayment pursuant to a valid exercise of the Survivor's Option is
not accepted, the applicable Trustee will deliver a notice by first-class mail
to the registered holder, at its last known address as indicated in the note
Register, that states the reason the note has not been accepted for payment.
Since the notes are represented by a global note, the Depositary or its
nominee is treated as the holder of the notes and will be the only entity that
can exercise the Survivor's Option for such notes. To obtain repayment pursuant
to exercise of the Survivor's Option for a note, the deceased holder's
authorized representative must provide the following to the broker or other
entity through which the beneficial interest in the note is held by the deceased
owner:
- appropriate evidence satisfactory to the applicable Trustee that (a) the
deceased was the owner of a beneficial interest in the note at the time of
death and for at least six months prior to his or her death, (b) the death
of the beneficial owner has occurred and (c) the representative has
authority to act on behalf of the deceased beneficial owner;
- if the beneficial interest in the note is held by a nominee of the deceased
beneficial owner, a certificate satisfactory to the applicable Trustee from
the nominee attesting to the deceased's ownership of a beneficial interest
in such note;
- a written request for repayment signed by the representative of the decedent
with signature guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc. or a commercial bank or trust company having an office or correspondent
in the United States.
- if applicable, a properly executed assignment or endorsement;
- tax waivers and any other instruments or documents that the Trustee
reasonably requires in order to establish the validity of the ownership of
the notes and the claimant's entitlement to payment; and
- any additional information the Trustee requires to document ownership or
authority to make the election and to cause the redemption of the notes.
In turn, the broker or other entity will deliver each of these items to the
Trustee, together with evidence satisfactory to the Trustee from the broker or
other entity stating that it represents the deceased beneficial owner.
We retain the right to limit the aggregate principal amount of notes as to
which exercises of the Survivor's Option will be accepted in any one calendar
year as described above. All other questions regarding the eligibility or
validity of any exercise of the Survivor's Option will be determined by the
applicable Trustee, in its sole discretion, which determination will be final
and binding on all parties.
The death of a person owning a note in joint tenancy or tenancy by the
entirety with another or others will be deemed the death of the holder of the
note, and the entire principal amount of the note so held will be subject to
repayment.
The death of a person owning a note by tenancy in common will be deemed the
death of a holder of a note only with respect to the deceased holder's interest
in the note so held by tenancy in common. However, if a note is held by husband
and wife as tenants in common, the death of either will be deemed the death of
the holder of the note, and the entire principal amount of the note so held will
be subject to repayment.
The death of a person who, during his or her lifetime, was entitled to
substantially all of the beneficial interests of ownership of a note, will be
16
<PAGE> 18
deemed the death of the holder of the note for purposes of this provision,
regardless of the registered holder, if the beneficial interest can be
established to the satisfaction of the applicable Trustee. The beneficial
interest will be deemed to exist in typical cases of nominee ownership,
ownership under the Uniform Transfers to Minors Act, community property or other
joint ownership arrangements between a husband and wife and custodial and trust
arrangements where one person has substantially all of the beneficial ownership
interest in the note during his or her lifetime.
The broker or other entity will be responsible for disbursing payments
received from the Trustee to the representative. See "Registration and
Settlement" on page 19.
Forms for the exercise of the Survivor's Option may be obtained from The Bank
of New York, 101 Barclay Street, 7 East, New York, New York 10286, Attention:
Reorganization Department, (212) 815-2742.
SUBORDINATION
The subordinated notes are subordinated in right of payment to our Senior
Indebtedness. The Subordinated Indenture basically defines "Senior Indebtedness"
as any indebtedness for money borrowed, including all of our indebtedness for
borrowed and purchased money, all of our obligations arising from off-balance
sheet guarantees and direct credit substitutes and our obligations associated
with derivative products such as interest and foreign exchange rate contracts
and commodity contracts, that were outstanding on the date we executed the
Subordinated Indenture, or were created, incurred or assumed after that date and
all deferrals, renewals, extensions and refundings of that indebtedness or
obligations unless the instrument creating or evidencing the indebtedness
provides that the indebtedness is subordinate in right of payment to any of our
other indebtedness. Our senior notes are Senior Indebtedness.
We will not be able to make any principal, premium or interest payments on the
subordinated notes or repurchase our subordinated notes if there is a default or
event of default on any Senior Indebtedness that is not remedied and we and the
Subordinated Trustee receive notice of this from the holders of at least 10% in
principal amount of any kind or category of any Senior Indebtedness or the
Subordinated Trustee receives notice from us.
If we repay any subordinated note before the required date or in connection
with a distribution of our assets to creditors pursuant to a dissolution,
winding up, liquidation or reorganization, any principal, premium or interest
owing to holders of our Senior Indebtedness will be paid to those holders before
any holders of Subordinated Indebtedness will be paid. In addition, if such
amounts were previously paid to the holder of a subordinated note or the
Subordinated Trustee, the holders of senior notes will have first rights to such
amounts previously paid.
Until all Senior Indebtedness is repaid in full, the holders of subordinated
notes will be subject to the rights of the holders of Senior Indebtedness to
receive payments or distributions of our assets.
SALE OR ISSUANCE OF CAPITAL STOCK OF PRINCIPAL SUBSIDIARY BANK
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:
- sales of directors' qualifying shares;
- sales or other dispositions for fair market value, if, after giving effect
to the disposition and to the conversion of any shares or securities
convertible into capital stock of a Principal Subsidi-
17
<PAGE> 19
ary Bank, we would own at least 80% of each class of the capital stock of
such Principal Subsidiary Bank;
- sales or other dispositions made in compliance with an order of a court or
regulatory authority of competent jurisdiction;
- any sale by a Principal Subsidiary Bank of additional shares of its capital
stock, securities convertible into shares of its capital stock, or options,
warrants or rights to subscribe for or purchase shares of its capital stock,
to its shareholders at any price, so long as before such sale we owned,
directly or indirectly, securities of the same class and immediately after
the sale, we owned, directly or indirectly, at least as great a percentage
of each class of securities of the Principal Subsidiary Bank as we owned
before such sale of additional securities; and
- 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 us or our
wholly owned subsidiary.
A Principal Subsidiary Bank is defined in the Senior Indenture as any of our
banking subsidiaries (other than any credit card bank, presently Bank of America
N.A. (USA)) with total assets equal to more than 10% of our total consolidated
assets. At present, Bank of America, N.A. is our only Principal Subsidiary Bank.
There is no equivalent covenant in the Subordinated Indenture.
WAIVER OF COVENANTS
The holders of a majority in principal amount of the notes affected that are
outstanding under each of the Indentures may waive compliance with certain
covenants or conditions of such Indentures.
MODIFICATION OF THE INDENTURES
We and the applicable Trustee may modify each of the Senior and Subordinated
Indentures with the consent of the holders of at least 66 2/3% of the aggregate
principal amount of the notes at the time outstanding under that Indenture,
voting as one class. However, we cannot modify either Indenture to extend the
fixed maturity of, reduce the principal amount or redemption premium of, or
reduce the rate of or extend the time of payment of interest on, any note
without the consent of each noteholder. Furthermore, we cannot modify either
Indenture to reduce the percentage of notes required to consent to modification
without the consent of all holders of the notes outstanding under the Indenture.
In addition, we and the Trustee may execute supplemental indentures in limited
circumstances without the consent of any holders of outstanding notes.
MEETINGS AND ACTION BY NOTEHOLDERS
The Trustee may call a meeting in its discretion or upon request by us or the
holders of at least 10% in principal amount of the notes outstanding under
either Indenture upon the giving of notice. If a meeting of noteholders is duly
held, any resolution raised or decision taken will be binding on all holders of
notes outstanding under the Indenture.
DEFAULTS AND RIGHTS OF ACCELERATION
The Senior Indenture defines an event of default as any one of the following
events:
- our failure to pay principal or premium when due on any notes;
- our failure to pay interest on any notes, within 30 days after the interest
becomes due;
- our breach of any of our other covenants contained in the senior notes or
the Senior
18
<PAGE> 20
Indenture that is not cured within 90 days after written notice to us by the
Senior Trustee, or to us and the Senior Trustee by the holders of at least
25% in principal amount of all senior notes then outstanding under the
Senior Indenture and affected thereby; and
- certain events involving our bankruptcy, insolvency or liquidation.
The Subordinated Indenture defines an event of default solely as our
bankruptcy under Federal bankruptcy laws.
If an event of default occurs and is continuing, either the Trustee or the
holders of 25% in principal amount of the notes outstanding under the applicable
Indenture may declare the principal amount of all such notes to be due and
payable immediately. The holders of a majority in principal amount of the notes
then outstanding under the applicable Indenture may annul the declaration of an
event of default and waive past defaults.
Payment of principal of the subordinated notes may not be accelerated in the
case of a default in the payment of principal or any premium or interest or the
performance of any other covenants.
COLLECTION OF INDEBTEDNESS
If we fail to pay principal or premium on the notes or if we are over 30 days
late on an interest payment on the notes, the appropriate Trustee can demand
that we pay to it, for the benefit of the noteholders under that Indenture, the
amount which is due and payable on those notes including any interest incurred
because of our failure to make that payment. If we fail to pay the required
amount on demand, the Trustee may take appropriate action including instituting
judicial proceedings.
The holders of a majority in principal amount of the notes then outstanding
under an Indenture may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee under that Indenture.
Trustee, however, will be entitled to receive from the holders reasonable
indemnity against expenses and liabilities.
At least annually, we are required to file with the Trustees a certificate
stating that we are not in default with any of the terms of the respective
Indentures.
NOTICES
We will provide noteholders any required notices by first-class mail to the
addresses of the holders as they appear in the note Register.
CONCERNING THE TRUSTEES
We and our subsidiaries have from time to time maintained deposit accounts and
conducted other banking transactions with The Bank of New York and its
affiliated entities in the ordinary course of business. The Bank of New York
also serves as trustee for a number of series of our outstanding indebtedness
under other indentures.
---------------------------------------------------------
REGISTRATION AND SETTLEMENT
---------------------------------------------------------
THE DEPOSITORY TRUST COMPANY
All of the notes we offer will be issued in book-entry only form. This means
that we will not issue actual notes or certificates. Instead, we will issue
global notes in registered form (each, a "Global Note"). Each Global Note is
held through DTC, as Depositary, and is registered in the name of Cede & Co., as
nominee of DTC. Accordingly, Cede & Co. will be the holder of record of the
notes. Each note represents a beneficial interest in that Global Note.
Beneficial interests in a Global Note are shown on, and transfers are effected
through, records maintained by DTC or its participants. In order to own a
beneficial interest in a note, you must be an institution that has an account
with DTC or have a direct or indirect account with such an institution.
Transfers of ownership interests in the notes will be accomplished by making
entries in DTC participants'
19
<PAGE> 21
books acting on behalf of beneficial owners. Beneficial owners of these notes
will not receive certificates representing their ownership interest, unless the
use of the book-entry system is discontinued.
So long as DTC or its nominee is the registered owner of a Global Note, DTC or
its nominee, as the case may be, will be the sole holder of the notes
represented thereby for all purposes, including payment of principal and
interest, under the applicable Indenture. Except as otherwise provided below,
the beneficial owners of the notes are not entitled to receive physical delivery
of certificated notes and will not be considered the holders for any purpose
under the applicable Indenture. Accordingly, each beneficial owner must rely on
the procedures of DTC and, if such beneficial owner is not a DTC participant, on
the procedures of the DTC participant through which such beneficial owner owns
its interest in order to exercise any rights of a holder of a note under the
applicable Indenture. The laws of some jurisdictions require that certain
purchasers of notes take physical delivery of such notes in certificated form.
Those limits and laws may impair the ability to transfer beneficial interests in
the notes.
Each Global Note representing notes will be exchangeable for certificated
notes of like tenor and terms and of differing authorized denominations in a
like aggregate principal amount, only if (i) the Depositary notifies us that it
is unwilling or unable to continue as Depositary for the Global Notes or we
become aware that the Depositary has ceased to be a clearing agency registered
under the Exchange Act and, in any such case we fail to appoint a successor to
the Depositary within 60 calendar days, (ii) we, in our sole discretion,
determine that the Global Notes shall be exchangeable for certificated notes or
(iii) an event of default has occurred and is continuing with respect to the
notes under the Indenture. Upon any such exchange, the certificated notes shall
be registered in the names of the beneficial owners of the Global Note
representing the notes.
The following is based on information furnished by DTC:
DTC will act as securities depository for the notes. The notes will be
issued as fully-registered notes registered in the name of Cede & Co. (DTC's
partnership nominee) or such other name as may be requested by an authorized
representative of DTC. Generally, one fully registered Global Note will be
issued for all of the principal amount of the notes. If, however, the
aggregate principal amount of any note exceeds $400 million, one certificate
will be issued with respect to each $400 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such note.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants deposit with
DTC. DTC also facilitates the settlement among direct participants of
securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in direct
participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its direct participants and by the
New York Stock Exchange, Inc., the American Stock Exchange LLC, and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available
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<PAGE> 22
to others such as securities brokers and dealers, banks, and trust companies
that clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly. The rules applicable to DTC and
its direct and indirect participants are on file with the SEC.
Purchases of the notes under the DTC system must be made by or through
direct participants, which will receive a credit for the notes on DTC's
records. The beneficial interest of each actual purchaser of each note is in
turn to be recorded on the direct and indirect participants' records.
Beneficial owners will not receive written confirmation from DTC of their
purchase, but beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the direct or indirect participant through which the beneficial
owner entered into the transaction. Transfers of beneficial interests in the
notes are to be accomplished by entries made on the books of direct and
indirect participants acting on behalf of beneficial owners. Beneficial owners
will not receive certificates representing their beneficial interests in
notes, except in the event that use of the book-entry system for the notes is
discontinued.
To facilitate subsequent transfers, all notes deposited by direct
participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. or such other name as may be requested by an authorized
representative of DTC. The deposit of the notes with DTC and their
registration in the name of Cede & Co. or such other nominee do not effect any
change in beneficial ownership. DTC has no knowledge of the actual beneficial
owners of the notes; DTC's records reflect only the identity of the direct
participants to whose accounts such notes are credited, which may or may not
be the beneficial owners. The direct and indirect participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
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. Beneficial owners of the
notes may wish to take certain steps to augment transmission to them of
notices of significant events with respect to the notes, such as redemption,
tenders, defaults, and proposed amendments to the security documents.
Beneficial owners of the notes may wish to ascertain that the nominee holding
the notes for their benefit has agreed to obtain and transmit notices to
beneficial owners, or in the alternative, beneficial owners may wish to
provide their names and addresses to the Registrar and request that copies of
the notices be provided directly to them.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote
with respect to the notes. Under its usual procedures, DTC mails an Omnibus
Proxy to us as soon as possible after the regular record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those direct
participants to whose accounts the notes are credited on the regular record
date (identified in a listing attached to the Omnibus Proxy).
We will pay principal and any premium or interest payments on the notes in
immediately available funds directly to DTC. DTC's practice is to credit
direct participants' accounts on the applicable payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payment on such date. Payments by
participants to beneficial owners will be governed by standing instructions
and customary practices, as is the case
21
<PAGE> 23
with securities held for the accounts of customers in bearer form or
registered in "street name." These payments will be the responsibility of
these participants and not of DTC or any other party, subject to any statutory
or regulatory requirements that may be in effect from time to time. Payment of
principal and any premium or interest to DTC is our responsibility,
disbursement of such payments to direct participants is the responsibility of
DTC, and disbursement of such payments to the beneficial owners is the
responsibility of the direct or indirect participant.
We will send any redemption notices to Cede & Co. If less than all of the
notes are being redeemed, DTC's practice is to determine by lot the amount of
the interest of each direct participant in such issue to be redeemed.
DTC may discontinue providing its services as securities depository for the
notes at any time by giving us reasonable notice. Under such circumstances, if
a successor securities depository is not obtained, we will print and deliver
certificated notes.
The information in this section concerning DTC and DTC's system has been
obtained from sources that we believe to be reliable, but we take no
responsibility for its accuracy.
REGISTRATION, TRANSFER AND PAYMENT OF CERTIFICATED NOTES
If we ever issue notes in certificated form, those notes may be presented for
registration, transfer and payment at the office of the Registrar or at the
office of any transfer agent designated and maintained by us. We have originally
designated The Bank of New York, 101 Barclay Street, 21 West, New York, New York
10286 to act in those capacities for both senior and subordinated notes. The
Registrar or transfer agent will make the transfer or registration only if it is
satisfied with the documents of title and identity of the person making the
request. There will not be a service charge for any exchange or registration of
transfer of the notes, but we may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with the
exchange. At any time we may change transfer agents or approve a change in the
location through which any transfer agent acts. We may also designate additional
transfer agents for any notes at any time.
We will not be required to (i) issue, exchange or register the transfer of any
note to be redeemed for a period of 15 days after the selection of the notes to
be redeemed; or (ii) exchange or register the transfer of any note that was
selected, called or is being called for redemption, except the unredeemed
portion of any note being redeemed in part.
We will pay principal and any premium and interest on any certificated notes
at the offices of the paying agents we may designate from time to time.
Generally, we will pay interest on a note on any interest payment date to the
person in whose name the note is registered at the close of business on the
regular record date for that payment.
---------------------------------------------------------
TAX CONSEQUENCES TO U.S. HOLDERS
---------------------------------------------------------
The following general summary describes the principal United States Federal
income and estate tax consequences of the ownership and disposition of the
notes. This summary provides general information only and is directed solely to
original holders who hold the notes as capital assets within the meaning of
Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"), and
does not purport to discuss all United States Federal income tax consequences
that may be applicable to particular categories of investors that may be subject
to special rules, such as certain financial institutions, insurance companies,
dealers in securities, persons holding notes as part of a "straddle," conversion
transaction, hedging or other integrated transaction, persons who have ceased to
be United States citizens
22
<PAGE> 24
or to be taxed as resident aliens or persons that are not U.S. Holders. In
addition, the tax consequences of holding a particular note will depend, in
part, on the particular terms of such note as described in the applicable
supplement. This summary also does not discuss the tax consequences that are
specific to holders who purchase notes that are treated as issued with "original
issue discount."
Holders of notes are advised to consult their own tax advisors with regard to
the application of the United States Federal income and estate tax laws to their
particular situations as well as any tax consequences arising under the laws of
any state, local or foreign tax jurisdiction.
This summary is based on the Code, United States Treasury Regulations
(including proposed and temporary regulations) promulgated under the Code,
rulings, official pronouncements and judicial decisions as of the date of this
Prospectus. The authorities on which this summary is based are subject to change
or differing interpretations, which could apply retroactively, so as to result
in United States Federal income tax consequences different from those discussed
below.
For purposes of the following discussion, "U.S. Holder" means a beneficial
owner of a note that is:
(1) for United States Federal income tax purposes a citizen or resident of
the United States;
(2) a corporation or partnership (or other entity properly classified as a
corporation or partnership for United States federal income tax purposes)
created or organized in the United States or under the laws of the United
States or any state (including the District of Columbia);
(3) an estate the income of which is subject to United States Federal income
taxation regardless of its source;
(4) a trust if (a) a court within the United States is able to exercise
primary supervision over the administration of the trust and (b) one or more
United States persons have the authority to control all substantial decisions
of the trust; or
(5) any other holder whose income with respect to a note is effectively
connected with such holder's conduct of a United States trade or business.
PAYMENT OF INTEREST
Interest on a note will generally be taxable to a U.S. Holder as ordinary
interest income at the time it is accrued or is received in accordance with the
U.S. Holder's method of accounting for tax purposes.
BOND PREMIUM
If a U.S. Holder purchases a note for an amount that is greater than the
principal amount of the note, such holder will be considered to have purchased
such note with "amortizable bond premium" equal in amount to such excess. A U.S.
Holder may elect (in accordance with applicable Code provisions) to amortize
such premium over the remaining term of the note (where such note is not
redeemable prior to its maturity date), based on the U.S. Holder's yield to
maturity with respect to the note.
A U.S. Holder may generally use the amortizable bond premium allocable to an
accrual period to offset interest required to be included in the U.S. Holder's
income with respect to the note in that accrual period. If the amortizable bond
premium allocable to an accrual period exceeds the amount of interest allocable
to such accrual period, such excess would be allowed as a deduction for such
accrual period, but only to the extent of the U.S. Holder's prior interest
inclusions on the note that have not been offset previously by bond premium. Any
excess is generally carried forward and allocable to the next accrual period.
If such note may be redeemed by us prior to maturity after the U.S. Holder has
acquired it, the amount of amortizable bond premium is determined with reference
to either the amount payable on
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<PAGE> 25
maturity or, if it results in a smaller premium, attributable to the period
through the earlier redemption date with reference to the amount payable on the
earlier redemption date. A U.S. Holder who elects to amortize bond premium must
reduce his tax basis in the note as described under "Sale, Exchange or
Redemption of the Notes" below.
An election to amortize bond premium applies to all taxable debt obligations
held by the U.S. Holder at the beginning of the first taxable year to which the
election applies and thereafter acquired by the U.S. Holder and may be revoked
only with the consent of the Internal Revenue Service. Generally, a holder may
make an election to include in gross income its entire return on a note (i.e.,
the excess of all remaining payments to be received on the note over the amount
paid for the note by such holder) in accordance with a constant yield method
based on the compounding of interest. If a holder makes such an election for a
note with amortizable bond premium, such election will result in a deemed
election to amortize bond premium for all of the holder's debt instruments with
amortizable bond premium and may be revoked only with the permission of the
Internal Revenue Service.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a note, a U.S. Holder will recognize
taxable gain or loss equal to the difference between the amount realized on the
sale, exchange or redemption (other than amounts representing interest not
previously included in income) and the U.S. Holder's adjusted tax basis in the
note. A U.S. Holder's adjusted tax basis in a note will generally be the U.S.
dollar cost of the note to such U.S. Holder, reduced by any principal payments
received by the U.S. Holder and any amortizable bond premium used to offset
interest.
In general, gain or loss realized on the sale, exchange or redemption of a
note will be capital gain or loss. Prospective investors should consult their
tax advisors regarding the treatment of capital gains (which may be taxed at
lower rates than ordinary income for taxpayers who are individuals, trusts or
estates) and losses (the deductibility of which is subject to limitation).
If a U.S. Holder disposes of only a portion of a note pursuant to a redemption
or repayment (including the Survivor's Option, if applicable), such disposition
will be treated as a pro rata prepayment in retirement of a portion of a debt
instrument. Generally, the resulting gain or loss would be calculated by
assuming that the original note being tendered consists of two instruments, one
that is retired (or repaid), and one that remains outstanding. The adjusted
issue price and the U.S. Holder's adjusted basis, determined immediately before
the disposition, would be allocated between these two instruments based on the
portion of the instrument that is treated as retired by the pro rata prepayment.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to certain
payments of principal, premium and interest on a note, and to payments of
proceeds of the sale or redemption of a note, to certain non-corporate U.S.
Holders. Bank of America Corporation, its agent, a broker, the relevant Trustee
or any paying agent, as the case may be, will be required to withhold from any
payment a tax equal to 31% of such payment if the U.S. Holder fails to furnish
or certify his correct taxpayer identification number (social security number or
employer identification number) to the payor in the manner required, fails to
certify that such U.S. Holder is not subject to backup withholding, or otherwise
fails to comply with the applicable requirements of the backup withholding
rules. Any amounts withheld under the backup withholding rules from a payment to
a holder may be credited against such holder's United States Federal income tax
and may entitle such holder to a refund, provided that the
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<PAGE> 26
required information is furnished to the United States Internal Revenue Service.
---------------------------------------------------------
PLAN OF DISTRIBUTION
---------------------------------------------------------
Under the terms of a Selling Agent Agreement dated as of January , 2001, the
notes are offered from time to time by us to the Purchasing Agent for subsequent
resale to the agents and other dealers who are broker-dealers and securities
firms. The agents, including the Purchasing Agent, are parties to that
agreement. The notes will be offered for sale in the United States only. Dealers
who are members of the selling group have executed a Master Selected Dealer
Agreement with the Purchasing Agent. The agents have agreed to use their
reasonable best efforts to solicit offers from investors to purchase the notes.
We also may appoint additional agents to solicit offers to purchase the notes.
Any solicitation and sale of the notes through those additional agents, however,
will be on the same terms and conditions to which the original agents have
agreed. We will pay the Purchasing Agent a gross selling concession to be
divided among the Purchasing Agent and the other agents as they agree. The
concession is payable to the Purchasing Agent in the form of a discount ranging
from 0.2% to 3.0% of the non-discounted price for each note sold. The Purchasing
Agent also may sell notes to dealers at a discount not in excess of the
concession it received from us.
Following the solicitation of orders, each of the agents, severally and not
jointly, may purchase notes as principal for its own account from the Purchasing
Agent. Unless otherwise set forth in the applicable supplement, these notes will
be purchased by the agents and resold by them to one or more investors at a
fixed public offering price. After the initial public offering of notes to be
resold by an agent to investors, the public offering price (in the case of notes
to be resold at a fixed public offering price), concession and discount may be
changed.
We have the sole right to accept offers to purchase notes and may reject any
proposed offer to purchase notes in whole or in part. Each agent also has the
right, in its discretion reasonably exercised, to reject any proposed offer to
purchase notes in whole or in part. We reserve the right to withdraw, cancel or
modify any offer without notice. We also may change the terms, including the
interest rate we will pay on the notes, at any time prior to our acceptance of
an offer to purchase.
Each agent, including the Purchasing Agent, may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933. We have agreed
to indemnify the agents against certain liabilities, including liabilities under
the Securities Act of 1933. We have also agreed to reimburse the agents for
certain expenses.
If any notes are to be distributed by means other than those set forth in the
Selling Agent Agreement, prior to commencement of such distribution, copies of
the proposed distribution agreements will be submitted to the National
Association of Securities Dealers, Inc. for review along with an estimate of the
maximum compensation to be received by any NASD member or related person
participating in the distribution.
No note will have an established trading market when issued. We do not intend
to apply for the listing of the notes on any securities exchange, but we have
been advised by the agents that the agents may purchase and sell notes in the
secondary market as permitted by applicable laws and regulations. The agents are
not obligated to make a market in the notes, and they may discontinue making a
market at any time without notice. Neither we nor the agents can provide any
assurance regarding the liquidity of any trading market for any notes. All
secondary trading in the notes will settle in immediately available funds. See
"Registration and Settlement" on page 19.
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<PAGE> 27
In connection with certain offerings of notes, the rules of the SEC permit the
Purchasing Agent to engage in transactions that may stabilize the price of the
notes. The Purchasing Agent will conduct these activities for the agents. These
transactions may consist of short sales, stabilizing transactions and purchases
to cover positions created by short sales. A short sale is the sale by the
Purchasing Agent of a greater amount of notes than the amount the Purchasing
Agent has agreed to purchase in connection with an offering of notes.
Stabilizing transactions consist of certain bids or purchases made by the
Purchasing Agent to prevent or retard a decline in the price of the notes while
an offering of notes is in process. In general, these purchases or bids for the
notes for the purpose of stabilization or to reduce a syndicate short position
could cause the price of the notes to be higher than it might otherwise be in
the absence of those purchases or bids. The Purchasing Agent makes no
representation or prediction as to the direction or magnitude of any effect that
these transactions may have on the price of any notes. In addition, the
Purchasing Agent makes no representation that, once commenced, these
transactions will not be discontinued without notice. The Purchasing Agent is
not required to engage in these activities and may end any of these activities
at any time.
Banc of America Securities LLC is a broker-dealer and one of our subsidiaries.
Through one of our subsidiaries we own a significant equity interest in
Integrated Holdings, LLC, the parent of Incapital, LLC, the Purchasing Agent.
Because of the relationship between us, Banc of America Securities LLC and
Incapital, LLC, each offering and any remarketing of notes will be conducted in
compliance with the requirements of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. regarding the offer and sale of
securities of an affiliated entity.
Following the initial distribution of notes, our affiliated entities,
including Banc of America Securities LLC and Incapital, LLC, may buy and sell
the notes in secondary market transactions as part of their business as
broker-dealers. Any sale will be at negotiated prices relating to prevailing
prices at the time of sale. This prospectus and related supplements may be used
by one or more of our affiliated entities in connection with offers and sales
related to secondary market transactions in the notes to the extent permitted by
applicable law. Any of our affiliated entities may act as principal or agent in
these transactions. Neither Banc of America Securities LLC nor Incapital, LLC
will execute a transaction in the notes in a discretionary account without
specific prior written approval of that customer.
The agents or dealers to or through which we may sell notes may engage in
transactions with us and perform services for us in the ordinary course of
business.
---------------------------------------------------------
WHERE YOU CAN FIND MORE INFORMATION
---------------------------------------------------------
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at the
Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. You may also inspect our filings at the
regional offices of the SEC located at 7 World Trade Center, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 or over the Internet at the SEC's home page at
http://www.sec.gov. You can also inspect reports and other information we file
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005.
The SEC allows us to incorporate by reference the information we file with it,
which means:
- incorporated documents are considered part of this prospectus;
- we can disclose important information to you by referring you to those
documents; and
- information that we file with the SEC will automatically update and
supersede this incorporated information and certain information in this
prospectus
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<PAGE> 28
We incorporate by reference the documents listed below which were filed with
the SEC under the Exchange Act:
- our annual report on Form 10-K for the year ended December 31, 1999;
- our quarterly reports on Form 10-Q for the periods ended March 31, 2000,
June 30, 2000 and September 30, 2000; and
- our current reports on Form 8-K filed on our behalf since January 1, 2000
(with the exception of any information filed pursuant to Item 9 of Form 8-K
which is not incorporated herein by reference).
We also incorporate by reference each of the following documents that we will
file with the SEC after the date of this prospectus (except any information
filed pursuant to Item 9 of Form 8-K):
- reports filed under Sections 13(a) and (c) of the Exchange Act;
- definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meetings; and
- any reports filed under Section 15(d) of the Exchange Act.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
position and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding exhibits),
at no cost, by contacting us at the following address:
Bank of America Corporation
Corporate Treasury Division
NC1-007-23-01
100 North Tryon Street
Charlotte, North Carolina 28255
(704) 386-5972
---------------------------------------------------------
FORWARD-LOOKING STATEMENTS
---------------------------------------------------------
This prospectus and all accompanying supplements contain or incorporate
statements that constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. Those
statements can be identified by the use of forward-looking language such as
"will likely result," "may," "are expected to," "is anticipated," "estimate,"
"projected," "intends to," or other similar words. Our actual results,
performance or achievements could differ materially from the results expressed
in, or implied by, those forward-looking statements. Those statements are
subject to certain risks and uncertainties, including but not limited to,
certain risks described in the prospectus supplement. When considering those
forward-looking statements, you should keep in mind these risks, uncertainties
and other cautionary statements made in this prospectus and the prospectus
supplement. You should not place undue reliance on any forward-looking statement
which speaks only as of the date made.
---------------------------------------------------------
LEGAL OPINIONS
---------------------------------------------------------
The legality of the notes will be passed upon for us by Smith Helms Mulliss &
Moore, L.L.P., Charlotte, North Carolina, and for the agents by Stroock &
Stroock & Lavan LLP, New York, New York. As of the date of this prospectus,
certain members of Smith Helms Mulliss & Moore, L.L.P., beneficially owned less
than one-tenth of 1% of our outstanding shares of common stock.
---------------------------------------------------------
EXPERTS
---------------------------------------------------------
Our consolidated financial statements incorporated in this prospectus by
reference to our annual report on Form 10-K for the year ended December 31, 1999
have been incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
auditing and accounting.
27
<PAGE> 29
(BANK OF AMERICA LOGO)
Bank of America Corporation
$3,000,000,000
INTERNOTES(SM)
PROSPECTUS
January , 2001
Our affiliated entities, including Banc of America Securities LLC and
Incapital, LLC, will deliver this prospectus for offers and sales in the
secondary market.
(BANK OF AMERICA LOGO)
<PAGE> 30
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, other than underwriting or broker-dealer fees,
discounts and commissions, in connection with the offering are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee............................. $ 792,000
NASD Fee.................................................... 35,000
Printing and Engraving Expenses............................. 200,000
Legal Fees and Expenses..................................... 260,000
Accounting Fees and Expenses................................ 10,000
Blue Sky Fees and Expenses.................................. 30,000
Trustee's and Depositary's Fees and Expenses (including
counsel fees)............................................. 320,000
Rating Agency Fees and Expenses............................. 50,000
Miscellaneous............................................... 50,000
----------
$1,747,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the Delaware General Corporation Law (the
"DGCL") empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. Subsection (b) of Section 145 of the DGCL
empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection with the defense or settlement of such
action or suit if such person acted in accordance with the above standards,
except that no indemnification may be made in respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which the action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnification
for such expenses which the Court of Chancery or such other court shall deem
proper.
Section 145 of the DGCL further provides that, to the extent that a
director or officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in the defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
therewith; and that indemnification provided by, or granted pursuant to, Section
145 shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled. Section 145 further empowers the corporation to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the
II-1
<PAGE> 31
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against him or her and incurred by him or her in any such capacity, or
arising out of such person's status as such, whether or not the corporation
would have the power to indemnify such person against such liabilities under
Section 145 of the DGCL.
Section 102(b)(7) of the DGCL permits a corporation's certificate of
incorporation to contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director; provided that such provision
shall not eliminate or limit the liability of a director for (i) any breach of
the director's duty of loyalty to the corporation or its stockholders; (ii) acts
or omissions not in good faith or which involved intentional misconduct or a
knowing violation of the law; (iii) willful or negligent unlawful payment of a
dividend or stock purchase or redemption; or (iv) any transaction from which the
director derived an improper personal benefit.
The Restated Certificate of Incorporation of the Registrant eliminates the
ability to recover monetary damages against directors of the Registrant for
breach of fiduciary duty to the fullest extent permitted by the DGCL. In
accordance with the provisions of the DGCL, the Bylaws of the Registrant provide
that, in addition to the indemnification of directors and officers otherwise
provided by the DGCL, the Registrant shall, under certain circumstances,
indemnify its directors, executive officers and certain other designated
officers against any and all liability and litigation expense, including
reasonable attorneys' fees, arising out of their status or activities as
directors and officers, except for liability or litigation expense incurred on
account of activities that were at the time known or believed by such director
or officer to be in conflict with the best interests of the Registrant. Pursuant
to such Bylaws and as authorized by statute, the Registrant may also maintain,
and does maintain, insurance on behalf of its directors and officers against
liability asserted against such persons in such capacity whether or not such
directors or officers have the right to indemnification pursuant to the Bylaws
or otherwise.
In addition, pursuant to the Agreement and Plan of Reorganization dated as
of April 10, 1998 (the "Merger Agreement") between the Registrant, formerly,
NationsBank Corporation ("NationsBank") and the former BankAmerica Corporation
("old BankAmerica"), for six years after September 30, 1998 (the date of the
consummation of the merger of old BankAmerica with and into the Registrant (the
"Merger")), the Registrant will indemnify directors, officers and employees of
old BankAmerica, NationsBank, or any of their respective subsidiaries against
certain liabilities in connection with such persons' status as such or in
connection with the Merger Agreement or any of the transactions contemplated
thereby. Pursuant to the Merger Agreement, the Registrant will also, for six
years after September 30, 1998 and with respect to events occurring prior to the
consummation of the Merger, honor all rights to indemnification and limitations
of liability existing in favor of the foregoing persons as provided in the
governing documents of NationsBank, old BankAmerica or their respective
subsidiaries.
Pursuant to the Merger Agreement, for six years after September 30, 1998,
the Registrant will also use its best efforts to cause the directors and
officers of old BankAmerica and NationsBank to be covered by a directors' and
officers' liability insurance policy with respect to acts or omissions occurring
prior to the consummation of the Merger.
The foregoing is only a general summary of certain aspects of Delaware law
dealing with indemnification of directors and officers and does not purport to
be complete. It is qualified in its entirety by reference to the relevant
statutes which contain detailed specific provisions regarding the circumstances
under which and the persons for whose benefit indemnification shall or may be
made.
In addition, certain sections of the form of the Selling Agent Agreement
filed as an Exhibit hereto provide for indemnification of the Registrant and its
directors and officers by the underwriters or agents against certain
liabilities, including certain liabilities under the 1933 Act. From time to time
similar provisions have been contained in other agreements relating to other
securities of the Registrant.
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<PAGE> 32
ITEM 16. LIST OF EXHIBITS
<TABLE>
<C> <S> <C>
1.1 -- Form of Selling Agent Agreement
4.1 -- Restated Senior Indenture dated as of January 1, 2001
between Bank of America Corporation and The Bank of New
York, as trustee
4.2 -- Restated Subordinated Indenture dated as of January 1, 2001
between Bank of America Corporation and The Bank of New
York, as trustee
4.3 -- Form of Bank of America Corporation Senior InterNote
4.4 -- Form of Bank of America Corporation Subordinated InterNote
5.1 -- Opinion of Smith Helms Mulliss & Moore, L.L.P. regarding
legality of notes being registered*
12.1 -- Calculation of Ratio of Earnings to Fixed Charges,
incorporated herein by reference to Exhibit 12(a) of the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2000, filed November 14, 2000
23.1 -- Consent of Smith Helms Mulliss & Moore, L.L.P. (included in
Exhibit 5.1)*
23.2 -- Consent of PricewaterhouseCoopers 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*
</TABLE>
---------------
*Previously filed with this Registration Statement.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
1933 Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of notes offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
provided, however, that paragraphs (1)(i) and (1)(ii) above do not
apply if the Registration Statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the notes offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-3
<PAGE> 33
(3) To remove from registration by means of a post-effective amendment
any of the notes being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the notes offered herein, and the
offering of such notes at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
The Registrant hereby undertakes (1) to use its best efforts to distribute
prior to the opening of bids, to prospective bidders, underwriters, and dealers,
a reasonable number of copies of a prospectus which at that time meets the
requirements of Section 10(a) of the 1933 Act, and relating to the securities
offered at competitive bidding, as contained in the Registration Statement,
together with any supplements thereto, and (2) to file an amendment to the
Registration Statement reflecting the results of bidding, the terms of the
reoffering and related matters to the extent required by the applicable form,
not later than the first use, authorized by the Registrant after the opening of
bids, of a prospectus relating to the securities offered at competitive bidding,
unless no further public offering of such securities by the Registrant and no
reoffering of such securities by the purchasers is proposed to be made.
The Registrant hereby undertakes to file an application for the purpose of
determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act of 1939, as amended (the "Act"), in
accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
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<PAGE> 34
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
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Charlotte, North Carolina, on January
17, 2001.
BANK OF AMERICA CORPORATION
By: HUGH L. MCCOLL, JR.*
------------------------------------
Hugh L. McColl, Jr.
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
HUGH L. MCCOLL, JR.* Chairman of the Board, January 17, 2001
----------------------------------------------------- Chief Executive
Hugh L. McColl, Jr. Officer and Director
(Principal Executive
Officer)
JAMES H. HANCE, JR.* Vice Chairman, January 17, 2001
----------------------------------------------------- Chief Financial
James H. Hance, Jr. Officer and Director
(Principal Financial
Officer)
MARC D. OKEN* Executive Vice January 17, 2001
----------------------------------------------------- President and
Marc D. Oken Principal Financial
Executive (Principal
Accounting Officer)
CHARLES W. COKER* Director January 17, 2001
-----------------------------------------------------
Charles W. Coker
ALAN T. DICKSON* Director January 17, 2001
-----------------------------------------------------
Alan T. Dickson
FRANK DOWD, IV* Director January 17, 2001
-----------------------------------------------------
Frank Dowd, IV
KATHLEEN F. FELDSTEIN* Director January 17, 2001
-----------------------------------------------------
Kathleen F. Feldstein
PAUL FULTON* Director January 17, 2001
-----------------------------------------------------
Paul Fulton
DONALD E. GUINN* Director January 17, 2001
-----------------------------------------------------
Donald E. Guinn
C. RAY HOLMAN* Director January 17, 2001
-----------------------------------------------------
C. Ray Holman
</TABLE>
II-5
<PAGE> 35
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
W.W. JOHNSON* Director January 17, 2001
-----------------------------------------------------
W.W. Johnson
KENNETH D. LEWIS* President, Chief January 17, 2001
----------------------------------------------------- Operating Officer
Kenneth D. Lewis and Director
WALTER E. MASSEY* Director January 17, 2001
-----------------------------------------------------
Walter E. Massey
O. TEMPLE SLOAN, JR.* Director January 17, 2001
-----------------------------------------------------
O. Temple Sloan, Jr.
MEREDITH R. SPANGLER* Director January 17, 2001
-----------------------------------------------------
Meredith R. Spangler
RONALD TOWNSEND* Director January 17, 2001
-----------------------------------------------------
Ronald Townsend
Director
-----------------------------------------------------
Solomon D. Trujillo
JACKIE M. WARD* Director January 17, 2001
-----------------------------------------------------
Jackie M. Ward
VIRGIL R. WILLIAMS* Director January 17, 2001
-----------------------------------------------------
Virgil R. Williams
*By: /s/ CHARLES M. BERGER
-------------------------------------------------
Charles M. Berger
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 36
EXHIBIT INDEX
<TABLE>
<C> <C> <S>
1.1 -- Form of Selling Agent Agreement
4.1 -- Restated Senior Indenture dated as of January 1, 2001
between Bank of America Corporation and The Bank of New
York, as trustee
4.2 -- Restated Subordinated Indenture dated as of January 1, 2001
between Bank of America Corporation and The Bank of New
York, as trustee
4.3 -- Form of Bank of America Corporation Senior InterNote
4.4 -- Form of Bank of America Corporation Subordinated InterNote
5.1 -- Opinion of Smith Helms Mulliss & Moore, L.L.P. regarding
legality of notes being registered*
12.1 -- Calculation of Ratio of Earnings to Fixed Charges,
incorporated herein by reference to Exhibit 12(a) of the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2000, filed November 14, 2000
23.1 -- Consent of Smith Helms Mulliss & Moore, L.L.P. (included in
Exhibit 5.1)*
23.2 -- Consent of PricewaterhouseCoopers 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*
</TABLE>
---------------
*Previously filed with this Registration Statement.
II-7
