<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OCTOBER 7, 1996
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
PNC BANK CORP.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER 1-9718
PENNSYLVANIA 25-1435979
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PNC PLAZA
249 FIFTH AVENUE
Pittsburgh, Pennsylvania 15222-2707
(Address of principal executive offices)
(Zip Code)
(412) 762-1553
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
On October 4, 1996, PNC Bank Corp. entered into an Underwriting
Agreement by and among it and the several Underwriters named therein
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting
as Representative, relating to the public offering by it of 6,000,000
shares of a newly authorized series of preferred stock
Fixed/Adjustable Rate Noncumulative Preferred Stock, Series F, par
value $1.00 per share (the "Series F Preferred Stock"), at a price per
share of $50.00. The closing is expected to occur on October 9, 1996.
The net proceeds from the sale of the Series F Preferred Stock will be
used by PNC Bank Corp. to repurchase issued and outstanding shares of
PNC Bank Corp.'s common stock.
The Underwriting Agreement is attached to this Form 8-K as Exhibit 1.
The terms of the Series F Preferred Stock are set forth in the
resolutions attached to this Form 8-K as Exhibit 99.2. The shares of
Series F Preferred Stock are being issued pursuant to Registration
Statement on Form S-3, as amended No. 33-40602, filed with the
Securities and Exchange Commission (the "SEC"). Pursuant to Rule 429 of
the Securities Act of 1993, as amended (the "Securities Act"), the
Prospectus contained in Registration Statement on Form S-3, as amended,
No. 33-55114 applies to Registration No. 33-40602. A Prospectus
Supplement dated October 4, 1996 relating to the Series F Preferred
Stock was filed with the SEC pursuant to Rule 424(b)(5) and Rule 424(c)
under the Securities Act on October 7, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The exhibits listed on the Exhibit Index on page 3 of this Form 8-K
are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PNC BANK CORP.
(Registrant)
Date: October 7, 1996 By: /s/ ROBERT L. HAUNSCHILD
------------------------
Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
2
<PAGE> 3
EXHIBIT INDEX
1 Underwriting Agreement dated as of October 4, 1996, among PNC Bank Corp.
and the several Underwriters named therein for whom Merrill Lynch,
Pierce, Fenner & Smith Incorporated is acting as Representative, filed
herewith.
99.1 Articles of Incorporation of PNC Bank Corp., filed herewith.
99.2 Resolutions for Fixed/Adjustable Rate Noncumulative Preferred Stock,
Series F ($1.00 par value), of PNC Bank Corp., filed herewith.
3
<PAGE> 1
Exhibit 1
October 4, 1996
PNC Bank Corp.
Fixed/Adjustable Rate Noncumulative
Preferred Stock, Series F
($1.00 par value)
Underwriting Agreement
New York, New York
To the Representatives
named in Schedule I
hereto of the
Underwriters named in
Schedule II hereto
Dear Sirs:
PNC Bank Corp., a Pennsylvania corporation (the
"Corporation"), proposes to sell to the underwriters named in Schedule II
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), the number of shares of preferred stock of the Corporation
identified in Schedule I hereto (said shares to be issued and sold by the
Corporation being hereinafter called the "Underwritten Securities"). The
Corporation also proposes to grant to the Underwriters an option to purchase up
to such additional number of shares of preferred stock of the Corporation as is
specified in Schedule I hereto (the "Option Securities"; together with the
Underwritten Securities, the "Securities") to cover over-allotments. If
"Depositary Receipt Arrangements" is specified in Schedule I hereto, the
Securities are to be deposited by you or on your behalf against delivery of
Depositary Receipts (the "Depositary Receipts") to be issued by the bank or
trust company identified in Schedule I hereto as Depositary (the "Depositary"),
under the deposit agreement described in Schedule I hereto (the "Deposit
Agreement"), among the Corporation, the Depositary and the holders from time to
time of the Depositary Receipts issued thereunder. Any Depositary Receipts
will evidence Depositary Shares (the "Depositary Shares") and each Depositary
Share will represent a fraction of a Security, as specified in Schedule I
hereto. Except where the context otherwise requires, references to Securities
herein shall include any related Depositary Shares and associated Depositary
Receipts. If the firm or firms listed in Schedule II
<PAGE> 2
- 2 -
hereto include only the firm or firms listed in Schedule I hereto, then the
terms "Underwriters" and "Representatives," as used herein, shall each be
deemed to refer to such firm or firms.
1. Representations and Warranties. The Corporation
represents and warrants to, and agrees with, each Underwriter as set forth
below in this Section 1. Certain terms used in this Section 1 are defined in
paragraph (c) hereof.
(a) If the offering of the Securities is a Delayed
Offering (as specified in Schedule I hereto), paragraph (i)
below is applicable and, if the offering of the Securities is
a Non-Delayed Offering (as so specified), paragraph (ii) below
is applicable.
(i) The Corporation meets the requirements
for the use of Form S-3 under the Securities Act of
1933 (the "Act") and has filed with the Securities
and Exchange Commission (the "Commission") a
registration statement (the file number of which is
set forth in Schedule I hereto), on such Form,
including a basic prospectus, for registration under
the Act of the offering and sale of the Securities.
The Corporation may have filed one or more amendments
thereto, and may have used a Preliminary Final
Prospectus, each of which has previously been
furnished to you. Such registration statement, as so
amended, has become effective. The offering of the
Securities is a Delayed Offering and, accordingly, it
is not necessary that any further information with
respect to the Securities and the offering thereof
required by the Act and the rules thereunder to be
included in the Final Prospectus have been included
in an amendment to such registration statement prior
to the Effective Date. The Corporation will next
file with the Commission pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of
prospectus included in such registration statement
relating to the Securities and the offering thereof.
As filed, such final prospectus supplement shall
include all required information with respect to the
Securities and the offering thereof
<PAGE> 3
- 3 -
and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all
substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only
such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Corporation has
advised you, prior to the Execution Time, will be
included or made therein.
(ii) The Corporation meets the requirements
for the use of Form S-3 under the Act and has filed
with the Commission a registration statement (the
file number of which is set forth in Schedule I
hereto) on such Form, including a basic prospectus,
for registration under the Act of the offering and
sale of the Securities. The Corporation may have
filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has
previously been furnished to you. The Corporation
will next file with the Commission either (x) a final
prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b)(1) or (4), or
(y) prior to the effectiveness of such registration
statement, an amendment to such registration
statement, including the form of final prospectus
supplement. In the case of clause (x), the
Corporation included in such registration statement,
as amended at the Effective Date, all information
(other than Rule 430A Information) required by the
Act and the rules thereunder to be included in the
Final Prospectus with respect to the Securities and
the offering thereof. As filed, such final
prospectus supplement or such amendment and form of
final prospectus supplement shall contain all Rule
430A Information, together with all other such
required information, with respect to the Securities
and the offering thereof and, except to the extent
the Representatives shall agree in writing to a
modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution
Time, shall
<PAGE> 4
- 4 -
contain only such specific additional information and
other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the
Corporation has advised you, prior to the Execution
Time, will be included or made therein.
(b) On the Effective Date, the Registration
Statement did or will, and when the Final Prospectus is first
filed (if required) in accordance with Rule 424(b) and on the
Closing Date, the Final Prospectus (and any supplement
thereto) will, comply in all material respects with the
applicable requirements of the Act and the Securities Exchange
Act of 1934 (the "Exchange Act") and the respective rules
thereunder; on the Effective Date, the Registration Statement
did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein
not misleading; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or
will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Final Prospectus (together
with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that the Corporation makes no
representations or warranties as to the information contained
in or omitted from the Registration Statement or the Final
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the
Corporation by or on behalf of any Underwriter through the
Representatives specifically for use in connection with the
preparation of the Registration Statement or the Final
Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term "the
Effective Date" shall mean each date that the Registration
Statement and any post effective amendment or amendments
thereto became or become effective. "Execution Time" shall
mean the date and time that this Agreement is executed
<PAGE> 5
- 5 -
and delivered by the parties hereto. "Basic Prospectus" shall
mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date
including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus. "Preliminary Final Prospectus"
shall mean any preliminary prospectus supplement to the Basic
Prospectus which describes the Securities and the offering
thereof and is used prior to filing of the Final Prospectus.
"Final Prospectus" shall mean the prospectus supplement
relating to the Securities that is first filed pursuant to
Rule 424(b) after the Execution Time, together with the Basic
Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the
form of final prospectus relating to the Securities, including
the Basic Prospectus, included in the Registration Statement
at the Effective Date. "Registration Statement" shall mean
the registration statement referred to in paragraph (a) above,
including incorporated documents, exhibits and financial
statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall
become effective) and, in the event any post effective
amendment thereto becomes effective prior to the Closing Date
(as hereinafter defined), shall also mean such registration
statement as so amended. Such term shall include any Rule
430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A. "Rule 415," "Rule
424," "Rule 430A" and "Regulation S- K" refer to such rules or
regulation under the Act. "Rule 430A Information" means
information with respect to the Securities and the offering
thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A.
Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the
<PAGE> 6
- 6 -
Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated
therein by reference. A "Non-Delayed Offering" shall mean
an offering of securities which is intended to commence
promptly after the effective date of a registration
statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information)
with respect to the securities so offered must be included
in such registration statement at the effective date
thereof. A "Delayed Offering" shall mean an offering of
securities pursuant to Rule 415 which does not commence
promptly after the effective date of a registration
statement, with the result that only information required
pursuant to Rule 415 need be included in such registration
statement at the effective date thereof with respect to the
securities so offered. Whether the offering of the
Securities is a Non-Delayed Offering or a Delayed Offering
shall be set forth in Schedule I hereto.
2. Purchase and Sale. (a)(i) Subject to the terms
and conditions and in reliance upon the representations and warranties herein
set forth, the Corporation agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the
Corporation, at the purchase price set forth in Schedule I hereto the number of
shares of the Securities set forth opposite such Underwriter's name in Schedule
II hereto, except that, if Schedule I hereto provides for the sale of
Securities pursuant to delayed delivery arrangements, the respective number of
shares of Securities to be purchased by the Underwriters shall be as set forth
in Schedule II hereto less the respective number of shares of Contract
Securities determined as provided below. Securities to be purchased by the
Underwriters are herein sometimes called the "Underwriters' Securities" and
Securities to be purchased pursuant to Delayed Delivery Contracts as
hereinafter provided are herein called "Contract Securities."
<PAGE> 7
- 7 -
(a)(ii) If so provided in Schedule I hereto, the
Underwriters are authorized to solicit offers to purchase Securities from the
Corporation pursuant to delayed delivery contracts ("Delayed Delivery
Contracts"), substantially in the form of Schedule III hereto but with such
changes therein as the Corporation may authorize or approve. The Underwriters
will endeavor to make such arrangements and, as compensation therefor, the
Corporation will pay to the Representatives, for the account of the
Underwriters, on the Closing Date, the percentage set forth in Schedule I
hereto of the aggregate liquidation preference of the Securities for which
Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. The Corporation will enter into Delayed Delivery Contracts in
all cases where sales of Contract Securities arranged by the Underwriters have
been approved by the Corporation but, except as the Corporation may otherwise
agree, each such Delayed Delivery Contract must be for not less than the
minimum number of shares set forth in Schedule I hereto and the aggregate
number of shares of Contract Securities may not exceed the maximum aggregate
number of shares set forth in Schedule I hereto. The Underwriters will not
have any responsibility in respect of the validity or performance of Delayed
Delivery Contracts. The number of shares of Securities to be purchased by each
Underwriter as set forth in Schedule II hereto shall be reduced by the number
of shares which shall bear the same proportion to the total number of shares of
Contract Securities as the number of shares of Securities set forth opposite
the name of such Underwriter bears to the aggregate number of shares set forth
in Schedule II hereto, except to the extent that you determine that such
reduction shall be otherwise than in such proportion and so advise the company
in writing; provided, however, that the total number of shares of Securities to
be purchased by all Underwriters shall be the aggregate number of shares set
forth in Schedule II hereto less the aggregate number of shares of Contract
Securities.
(b) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Corporation hereby grants an option to the several Underwriters to purchase,
severally and not jointly, the Option Securities at the same purchase price per
share as the Underwriters shall
<PAGE> 8
- 8 -
pay for the Underwritten Securities. Said option may be exercised only to
cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date of the Final
Prospectus upon written or telegraphic notice by the Representatives to the
Corporation setting forth the number of shares of the Option Securities as to
which the several Underwriters are exercising the option and the settlement
date. Delivery of certificates for the shares of Option Securities, and
payment therefor, shall be made as provided in Section 3 hereof. The number of
shares of the Option Securities to be purchased by each Underwriter shall be
the same percentage of the total number of shares of the Option Securities to
be purchased by the several Underwriters as such Underwriter is purchasing the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment
for the Underwriters' Securities shall be made on the date and at the time
specified in Schedule I hereto (or such later date not later than five business
days after such specified date as the Representatives shall designate), which
date and time may be postponed by agreement among the Representatives, the
Corporation or as provided in Section 8 hereof (such date and time of delivery
and payment for the Underwriters' Securities being herein called the "Closing
Date"). Delivery of the Underwriters' Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Corporation by certified or official
bank check or checks drawn on or by a New York Clearing House bank and payable
in next day funds. Delivery of the Underwriters' Securities shall be made at
such location in The City of New York as the Representatives shall reasonably
designate at least one business day in advance of the Closing Date and payment
for the Securities shall be made at the office specified in Schedule I hereto.
Certificates for the Underwriters' Securities shall be registered in such names
(including the nominee for any depositary which will hold Securities to be
established for "book entry" issuance and transfer) and in such denominations
as the
<PAGE> 9
- 9 -
Representatives may request not less than two full business days in advance of
the Closing Date.
The Corporation agrees to have the Underwriters'
Securities available for inspection, checking and packaging by the
Representatives in New York, New York, not later than 1:00 p.m. on the business
day prior to the Closing Date.
If the option provided for in Section 2(b) hereof is
exercised after the third business day prior to the Closing Date, the
Corporation will deliver (at the expense of the Corporation) to the
Representatives, at such location in The City of New York as the
Representatives shall reasonably designate, on the date specified by the
Representative (which shall be within three business days after exercise of
said option), certificates for the Option Securities in such names and
denominations as the Representatives shall have requested against payment of
the purchase price thereof to or upon the order of the Corporation by certified
or official bank check or checks drawn on or by a New York Clearing House bank
and payable in next day funds. If settlement for the Option Securities occurs
after the Closing Date, the Corporation will deliver to the Representatives on
the settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 5 hereof.
Notwithstanding the preceding paragraphs, if
"Depositary Receipt Arrangements" is specified in Schedule I hereto,
certificates representing Securities shall be delivered in the names of the
Representatives. Such certificates shall be delivered by the Representatives
to the Depositary against delivery of Depositary Receipts representing
Depositary Shares. Such Depositary Receipts shall be issued in such
denominations and registered in such names as the Representatives shall request
and shall be made available for inspection, checking and packaging by the
Representatives in New York, New York not later than 1:00 p.m. on the business
day prior to the due date for delivery hereof.
4. Agreements. The Corporation agrees with the
several Underwriters that:
<PAGE> 10
- 10 -
(a) The Corporation will use its best efforts to
cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereto, to become
effective. Prior to the termination of the offering of the
Securities, the Corporation will not file any amendment to the
Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus unless the Corporation has furnished you a copy for
your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Corporation
will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to
the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Corporation will
promptly advise the Representatives (i) when the Registration
Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the
Final Prospectus, and any supplement thereto, shall have been
filed with the Commission pursuant to Rule 424(b), (iii) when,
prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed
or become effective, (iv) of any request by the Commission for
any amendment of the Registration Statement or supplement to
the Final Prospectus or for any additional information, (v) of
the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose
and (vi) of the receipt by the Corporation of any notification
with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The
Corporation will use its best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to
the Securities is required to be delivered under the Act, any
event occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of
<PAGE> 11
- 11 -
a material fact or omit to state any material fact necessary
to make the statements therein in the light of the
circumstances under which they were made not misleading, or if
it shall be necessary to amend the Registration Statement or
supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the
Corporation promptly will prepare and file with the
Commission, subject to the second sentence of paragraph (a) of
this Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance.
(c) As soon as practicable, the Corporation will
make generally available to its security holders and to the
Representatives an earnings statement or statements of the
Corporation and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Corporation will furnish to the
Representatives and counsel for the Underwriters, without
charge, copies of the Registration Statement (including
exhibits thereto) and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Act, as many
copies of any Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representatives
may reasonably request. The Corporation will pay the expenses
of printing or other production of all documents relating to
the offering.
(e) The Corporation will use its best efforts to
arrange for the qualification of the Securities for sale under
the laws of such jurisdictions as the Representatives may
designate, will maintain such qualifications in effect so long
as required for the distribution of the Securities and will
arrange for the determination of the legality of the
Securities for purchase by institutional investors; provided,
however, that the Corporation shall not be required to qualify
to do business in any jurisdiction where it is not now
qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction
where they are not now subject.
<PAGE> 12
- 12 -
(f) Until the date specified on Schedule I hereto,
the Corporation will not, without the consent of the
Representatives, offer, sell or contract to sell, or announce
the offering of, (i) any shares of preferred stock covered by
the Registration Statement or any other registration statement
filed under the Act, or (ii) if the Securities are convertible
into other securities of the Corporation, any of such other
securities, in each case other than shares of common or
preferred stock of the Corporation issued pursuant to warrants
to purchase any such shares, issued upon conversion of the
Corporation's outstanding convertible debentures or issued
pursuant to any employee benefit or dividend reinvestment plan
of the Corporation in effect at the Execution Time.
5. Conditions to the Obligations of the
Underwriters. The obligations of the Underwriters to purchase the
Underwriters' Securities shall be subject to the accuracy in all material
respects of the representations and warranties on the part of the Corporation
contained herein as of the Execution Time and the Closing Date, to the accuracy
in all material respects of the statements of the Corporation made in any
certificates pursuant to the provisions hereof, to the performance in all
material respects by the Corporation of its obligations hereunder and to the
following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the
Representatives agree in writing to a later time, the
Registration Statement will become effective not later than
(i) 6:00 p.m. New York City time, on the date of determination
of the public offering price, if such determination occurred
at or prior to 3:00 p.m. New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which
the public offering price was determined, if such
determination occurred after 3:00 p.m. New York City time on
such date; if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the
Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
<PAGE> 13
- 13 -
(b) The Corporation shall have furnished to the
Representatives the opinion of Melanie S. Cibik, Senior
Counsel of the Corporation, dated the Closing Date, to the
effect that:
(i) the Corporation is a corporation validly
organized and presently subsisting under the laws of
the Commonwealth of Pennsylvania with all requisite
corporate power and authority to own its properties
and conduct its business as described in the Final
Prospectus, except for such power and authority the
absence of which would not have a material adverse
effect on the Corporation, is duly registered as a
bank holding company under the Bank Holding Company
Act of 1956, as amended;
(ii) PNC Bank, National Association ("PNC
Bank, N.A.") is a national banking organization
validly existing in good standing under the laws of
the United States, with all requisite corporate power
and authority to own, lease and operate its
properties and conduct its business as described in
the Final Prospectus, except for such power and
authority the absence of which would not have a
material adverse effect on PNC Bank, N.A.;
(iii) all the outstanding shares of capital
stock of PNC Bank, N.A. have been duly and validly
authorized and issued and (except as provided in 12
U.S.C. Section 55) are fully paid and nonassessable,
and, except as otherwise set forth in the Final
Prospectus, all outstanding shares of capital stock
of PNC Bank, N.A. are owned by the Corporation either
directly or through wholly owned subsidiaries free
and clear of any perfected security interest and, to
the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or
encumbrances;
(iv) the Corporation's authorized equity
capitalization, if set forth in the Final Prospectus,
is as set forth in the Final Prospectus; the
Securities and any Depositary Receipts conform in all
material respects to the description thereof
contained
<PAGE> 14
- 14 -
in the Final Prospectus; the Securities have been duly and
validly authorized, and, when issued and delivered to and paid
for by the Underwriters pursuant to this Agreement, will be
fully paid an nonassessable and, if the Securities or related
Depositary Shares are to be listed on any stock exchange,
authorization therefor has been given, subject to official
notice of issuance and evidence of satisfactory distribution,
or the Corporation has filed a preliminary listing application
and all required supporting documents with respect to the
Securities or such Depositary Shares, if any, with such stock
exchange and nothing has caused such counsel to believe that
the Securities or such Depositary Shares, if any, will not be
authorized for listing, subject to official notice of issuance
and evidence of satisfactory distribution;
(v) to the best knowledge of such counsel,
there is no pending or threatened action, suit or
proceeding before any court or governmental agency,
authority or body or any arbitrator involving the
Corporation or any of its subsidiaries, of a
character required to be disclosed in the
Registration Statement which is not adequately
disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character
required to be described in the Registration
Statement or Final Prospectus, or to be filed as an
exhibit, which is not described or filed as required;
and the statements included or incorporated in the
Final Prospectus describing any legal proceedings or
material contracts or agreements relating to the
Corporation or any of its subsidiaries fairly
summarize such matters in all material respects;
(vi) the Registration Statement has become
effective under the Act; any required filing of the
Basic Prospectus, any Preliminary Final Prospectus
and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule
424(b); to the best knowledge of such counsel, no
stop order suspending the
<PAGE> 15
- 15 -
effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Final
Prospectus (other than the financial statements and other
financial and statistical information contained or
incorporated therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
applicable requirements of that Act and the Exchange Act and
the respective rules thereunder; and nothing has come to the
attention of such counsel that has caused such counsel to
believe that at the Effective Date the Registration Statement
contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Final Prospectus includes any untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading except that such
counsel does not express any opinion as to the financial
statements or schedules or other data of a statistical or
financial nature included or incorporated therein or;
(vii) this Agreement and any Delayed
Delivery Contracts have been duly authorized,
executed and delivered by the Corporation and, if any
Depositary is also a subsidiary, by such Depositary;
(viii) no consent, approval, authorization
or order of any court or governmental agency or body
is required for the consummation of the transactions
contemplated herein or in any Delayed Delivery
Contracts, except such as have been obtained under
the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in
such opinion) as have been obtained;
<PAGE> 16
- 16 -
(ix) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment
of the terms hereof or of any Deposit Agreement or
Delayed Delivery Contracts will (A) violate the
charter or by-laws of the Corporation, or (B)
violate, result in a breach of, or constitute a
default under the terms of any material indenture or
other material agreement or instrument known to such
counsel and to which the Corporation or PNC Bank,
N.A. is a party or bound, or (C) violate any material
order or regulation known to such counsel to be
applicable to the Corporation or PNC Bank, N.A. of
any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction
over the Corporation or PNC Bank, N.A.; and
(x) no holders of securities of the
Corporation have rights to the registration of such
securities under the Registration Statement.
In rendering such opinion, such counsel will opine only as to matters involving
the application of the laws of the Commonwealth of Pennsylvania or the United
States and may rely (A) as to matters involving the application of laws of any
jurisdiction other than the Commonwealth of Pennsylvania or the United States,
to the extent deemed proper and specified in such opinion, upon the opinion of
other counsel of good standing believed to be reliable and who are reasonably
satisfactory to counsel for the Underwriters, except that it will not be
required that such counsel obtain an opinion of New York counsel as to matters
of New York law in order to render such opinion or that such counsel express an
opinion as to matters arising under the laws of any jurisdiction other than the
laws of the Commonwealth of Pennsylvania and matters of federal law arising
under the laws of the United States of America, and (B) as to matters of fact,
to the extent deemed proper, on certificates of responsible officers of the
Corporation and public officials. References to the Final Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) The Representatives shall have received from
Cravath, Swaine & Moore, counsel for the Underwriters, such
opinion or opinions, dated the
<PAGE> 17
- 17 -
Closing Date, with respect to the issuance and sale of the
Securities, any Delayed Delivery Contracts, the Registration
Statement, the Final Prospectus (together with any supplement
thereto) and other related matters as the Representatives may
reasonably require, and the Corporation shall have furnished
to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(d) The Corporation shall have furnished to the
Representatives a certificate of the Corporation, signed by
the Chairman of the Board, the President, a Vice Chairman of
the Board or any Executive or Senior Vice President and the
principal financial or accounting officer of the Corporation,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplement to the Final
Prospectus and this Agreement and that:
(i) the representations and warranties of
the Corporation in this Agreement are true and
correct in all material respects on and as of the
Closing Date with the same effect as if made on the
Closing Date and the Corporation has complied in all
material respects with all the agreements and
satisfied in all material respects all the conditions
on its part to be performed or satisfied at or prior
to the Closing Date;
(ii) no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been
instituted or, to the Corporation's knowledge,
threatened; and
(iii) since the date of the most recent
financial statements included in the Final Prospectus
(exclusive of any supplement thereto), and except as
may result from a payment required as a result of
legislation passed by Congress to recapitalize the
Savings Association Insurance Fund, there has been no
material adverse change in the condition (financial
or other), earnings, business or properties of the
Corporation and its subsidiaries taken as a whole,
whether or not arising from transactions in the
ordinary
<PAGE> 18
- 18 -
course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(e) At the Closing Date, Ernst & Young shall have
furnished to the Representatives a letter or letters (which
may refer to letters previously delivered to one or more of
the Representatives), dated as of the Closing Date, in form
and substance satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of
the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in
effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included
or incorporated in the Registration Statement and the
Final Prospectus and reported on by them comply in
form in all material respects with the applicable
accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the
Corporation and its subsidiaries; carrying out
certain specified procedures (but not an audit in
accordance with generally accepted auditing
standards) which would not necessarily reveal matters
of significance with respect to the comments set
forth in such letter; a reading of the minutes of the
meetings of the shareholders and directors of the
Corporation and the audit and executive committees
thereof and inquiries of certain officials of the
Corporation who have responsibility for financial and
accounting matters of the Corporation and its
subsidiaries as to transactions and events subsequent
to the date of the most recent audited financial
statements in or incorporated in the Final
Prospectus, nothing came to their attention which
caused them to believe that: (1) any unaudited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus do
not comply in form in all material respects with
applicable accounting requirements and with the
<PAGE> 19
- 19 -
published rules and regulations of the Commission with
respect to the financial statements included or
incorporated in quarterly reports on Form 10-Q under
the Exchange Act; and said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus; or
(2) with respect to the period subsequent to the date
of the most recent audited financial statements
incorporated in the Registration Statement and the
Final Prospectus, there were, at a specified date not
more than five business days prior to the date of the
letter, any increases in the long-term debt of the
Corporation or any decreases in the capital stock of
the Corporation or the stockholders' equity of the
Corporation as compared with the amounts shown on the
most recent consolidated balance sheet incorporated in
the Registration Statement and the Final Prospectus,
or for the period from the date of the most recent
audited financial statements incorporated in the
Registration Statement and the Final Prospectus to
such specified date there were any decreases, as
compared with the corresponding period in the
preceding year, in total or per share amounts of net
income of the Corporation or net interest income
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall
be accompanied by an explanation by the Corporation as
to the significance thereof unless said explanation is
not deemed necessary by the Representative; and
(iii) they have performed certain other
specified procedures as a result of which they
determined that certain information of an accounting,
financial or statistical nature (which is limited to
accounting, financial or statistical information
derived from the general accounting records of the
Corporation and its subsidiaries) set forth in the
Registration Statement and the Final Prospectus,
including the information
<PAGE> 20
- 20 -
included or incorporated in Items 1, 5, 6 and 7 of the
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995, incorporated in the Registration Statement
and the Final Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" included or incorporated in the
Corporation's Quarterly Reports on Form 10-Q, incorporated in
the Registration Statement and Final Prospectus, agrees with
the accounting records of the Corporation and its
subsidiaries, excluding any questions of legal interpretation.
References to the Final Prospectus in this paragraph
(e) include any supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto,
at the Execution Time, Ernst & Young shall have furnished to the
Representatives a letter or letters, dated as of the Execution Time, in form
and substance satisfactory to the Representatives, to the effect set forth
above.
(f) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto), there shall
not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (e) of this Section
5 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties
of the Corporation and its subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Representatives, so material and adverse
as to make it impractical or inadvisable to proceed with the
offering or the delivery of the Securities as contemplated by
the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement
thereto).
(g) Subsequent to the Execution Time, there shall
not have been any decrease in the ratings of any of the
Corporation's equity securities by Moody's Investors Service,
Inc., or Standard & Poor's Corporation.
<PAGE> 21
- 21 -
(h) Prior to the Closing Date, the Corporation shall
have furnished to the Representatives such further
information, certificates and documents as the Representatives
may reasonably request in connection with the offering of the
Securities.
(i) The Corporation shall have accepted Delayed
Delivery Contracts in any case where sales of Contract
Securities arranged by the Underwriters have been approved by
the Corporation.
(j) Any Deposit Agreement shall have been duly
executed by the Corporation and the Depositary.
If any of the conditions specified in this Section 5
shall not have been fulfilled in all material respects when and as provided in
this Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Corporation
in writing or by telephone or telegraph confirmed in writing.
6. Reimbursement of Underwriters' Expenses. If the
sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 5 hereof
is not satisfied, because of any termination pursuant to Section 9 hereof or
because of any refusal, inability or failure on the part of the Corporation to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Corporation will reimburse
the Underwriters severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities. In no event shall the Corporation be liable to the Underwriters
for loss of anticipated profits from the transactions contemplated by this
Agreement.
<PAGE> 22
- 22 -
7. Indemnification and Contribution. (a) The
Corporation agrees to indemnify and hold harmless each Underwriter and each
person who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities and any related Depositary
Shares as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (i) the Corporation will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Corporation by or on behalf of any Underwriter
through the Representatives specifically for use in connection with the
preparation thereof, and (ii) such indemnity with respect to the Basic
Prospectus or any Preliminary Final Prospectus shall not inure to the benefit
of any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the
Securities or any related Depositary Shares which are the subject thereof if
such person did not receive a copy of the Final Prospectus (or the Final
Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Securities or
Depositary Shares, if any, to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in the Basic Prospectus or any Preliminary Final Prospectus was
corrected in the Final Prospectus (or the Final Prospectus as supplemented).
This
<PAGE> 23
- 23 -
indemnity agreement will be in addition to any liability which the Corporation
may otherwise have.
(b) Each Underwriter severally agrees to indemnify
and hold harmless the Corporation, each of its directors, each of its officers
who signs the Registration Statement, and each person who controls the
Corporation within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Corporation to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Corporation by or on behalf of such Underwriter
through the Representatives specifically for use in the preparation of the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise have.
The Corporation acknowledges that the statements set forth in the last
paragraph of the cover page, the first paragraph of the second page and under
the heading "Underwriting" or "Plan of Distribution" and, if Schedule I hereto
provides for sales of Securities pursuant to delayed delivery arrangements, in
the last sentence under the heading "Delayed Delivery Arrangements" in any
Preliminary Final Prospectus or the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters
for inclusion in the documents referred to in the foregoing indemnity, and you,
as the Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 7. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however, that if
the defendants in any
<PAGE> 24
- 24 -
such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of such
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 7 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (plus any local counsel), approved by the Representatives in
the case of paragraph (a) of this Section 7, representing the indemnified
parties under such paragraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense
of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii).
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
paragraph (a) of this Section 7 is due in accordance with its terms but is for
any reason held by a court to be unavailable from the Corporation on grounds of
policy or otherwise, the Corporation, on the one hand, and the Underwriters, on
the other hand, shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) to which the Corporation and
one or more of the Underwriters may be subject in such proportion so that the
Underwriters are responsible for that portion
<PAGE> 25
- 25 -
represented by the percentage that the underwriting discount bears to the sum
of such discount and the purchase price of the Securities specified in Schedule
I hereto and the Corporation is responsible for the balance; provided, however,
that (y) in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount applicable to
the Securities purchased by such Underwriter hereunder and (z) no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 7, each person
who controls an Underwriter within the meaning of the Act shall have the same
rights to contribution as such Underwriter, and each person who controls the
Corporation within the meaning of either the Act or the Exchange Act, each
officer of the Corporation who shall have signed the Registration Statement and
each director of the Corporation shall have the same rights to contribution as
the Corporation, subject in each case to clauses (y) and (z) of this paragraph
(d). Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or parties
under this paragraph (d), notify such party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have hereunder or otherwise than under this
paragraph (d).
8. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule II hereto bears
to the aggregate amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of
<PAGE> 26
- 26 -
Securities which the defaulting Underwriter or Underwriters agreed but failed
to purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule II hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such non defaulting Underwriters do not purchase all the Securities,
this Agreement will terminate without liability to any non defaulting
Underwriter or the Corporation. In the event of a default by any Underwriter
as set forth in this Section 8, the Closing Date shall be postponed for such
period, not exceeding seven days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Corporation and any non defaulting Underwriter for
damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Corporation prior to delivery of and payment for the Securities, if
prior to such time (i) trading in the Corporation's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by Federal, New York State
or Pennsylvania authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities.
10. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Corporation or its respective officers and of the
Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Corporation or any of the officers, directors or
controlling persons referred to in Section 7 hereof, and will survive delivery
of and
<PAGE> 27
- 27 -
payment for the Securities. The provisions of Sections 6 and 7 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be
in writing and effective only on receipt, and, if sent to the Representatives,
will be mailed, delivered or transmitted by any standard form of
telecommunication, at the address specified in Schedule I hereto; or, if sent
to the Corporation, will be mailed, delivered or transmitted by any standard
form of telecommunication to it at One PNC Plaza, 249 Fifth Avenue, Pittsburgh,
Pennsylvania 15222, attention of the Executive Vice President--Finance and
Administration of the Corporation.
12. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to
in Section 7 hereof, and no other person will have any right or obligation
hereunder.
13. Applicable Law. This Agreement will be governed
by and construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this letter and your acceptance shall represent a
binding agreement among the Corporation and the several Underwriters.
Very truly yours,
PNC Bank Corp.
By:
____________________________
Executive Vice President--
Finance and Administration
Confirmed and accepted,
intending to be legally
bound, as of the date specified
in Schedule I hereto.
<PAGE> 28
- 28 -
By: Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: ___________________
Managing Director
For itself and the other
several Underwriters, if
any, named in Schedule II
to the foregoing Agreement.
<PAGE> 29
SCHEDULE I
Underwriting Agreement dated October 4, 1996
Registration Statement No. 33-55114
Representative(s): Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Designation, Purchase Price and Description of Securities:
Designation: Fixed/Adjustable Rate Noncumulative Preferred Stock, Series F
Liquidation preference per share: $50
Number of shares: 6,000,000
Purchase price per share (include accrued
dividends, if any): $49.375, to be paid by wire
transfer of immediately available funds rather than
as described in Section 3.
Over-allotment option: None
Depositary Receipt Arrangements: None
Name of Depositary:
Date of Deposit Agreement:
Fraction of a Security equal to one Depositary Share:
Closing Date, Time and Location: October 9, 1996
Cravath, Swaine & Moore, 825 Eighth Avenue, New York, NY
Type of Offering: Delayed Offering
Delayed Delivery Arrangements: None
Fee:
Minimum number of shares of Securities of each contract:
Maximum aggregate number of shares of Securities of all
contracts:
Modification of items to be covered by the letter from Ernst
& Young delivered pursuant to Section 5(e) at the Execution
Time:
<PAGE> 30
- 2 -
Letter from Ernst & Young to be delivered pursuant to Section
5(e) at the Closing Date, not also at the Execution Time.
<PAGE> 31
SCHEDULE II
<TABLE>
<CAPTION>
Number of shares
of Securities To
Underwriters Be Purchased
- ------------ ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner &
Smith Incorporated 3,600,000
Morgan Stanley & Co. Incorporated 800,000
Salomon Brothers Inc 800,000
Smith Barney Inc. 800,000
----------------
Total ................... 6,000,000
================
</TABLE>
<PAGE> 1
Exhibit 99.1
ARTICLES OF INCORPORATION
OF
PNC BANK CORP.
[Composite, includes amendments through April 27, 1993.]
FIRST. The name of the Corporation is PNC BANK CORP.
SECOND. The location and post office address of its initial registered
office in this Commonwealth is One PNC Plaza, Fifth Avenue and Wood Street,
Pittsburgh, Pennsylvania 15222.
THIRD. The Corporation is incorporated under the provisions of the
Business Corporation Law, the Act approved May 5, 1933, P. L. 364, as amended.
The purpose of the Corporation is and it shall have unlimited power to engage
in and to do any lawful act concerning any or all lawful business for which
corporations may be incorporated under such Act.
FOURTH. The term of the Corporation's existence is perpetual.
FIFTH. The authority to make, amend and repeal the by-laws of the
Corporation is hereby vested in the Board of Directors, subject to the power of
the shareholders to change any such action.
SIXTH. The aggregate number of shares of capital stock which the
Corporation shall have authority to issue is 470,000,000 shares divided into
two classes consisting of 20,000,000 shares of preferred stock of the par value
of $1 each ("Preferred Stock") and 450,000,000 shares of common stock of the
par value of $5 each ("Common Stock").
SEVENTH. The following is a statement of certain of the designations,
preferences, qualifications, privileges, limitations, restrictions, and special
or relative rights in respect of the Preferred Stock and the Common Stock and a
statement of the authority vested in the Board of Directors to fix by
resolution any designations, preferences, privileges, qualifications,
limitations, restrictions and special or relative rights of any series of
Preferred Stock which are not fixed hereby:
PREFERRED STOCK
1. Issuance in series. The shares of Preferred Stock may be issued from
time to time in series. Each series shall be so designated as to distinguish
the shares thereof from the shares of all other series. All shares of any
particular series shall be identical except, if entitled to cumulative
dividends, as to the date or dates from which dividends thereon shall be
cumulative. The shares of any one series need not be identical or rank equally
with the shares of any other series except as required by law or as provided
hereby. The Board of Directors is expressly vested with authority to establish
and designate any one or more series of Preferred Stock and to fix and
determine by resolution any designations, preferences, qualifications,
privileges, limitations, restrictions or special or relative rights of
additional series which are not fixed hereby, including the following:
(a) The number of shares to constitute the series and the distinctive
designation thereof.
(b) The dividend rate, the dates for payment of dividends, whether
dividends shall be cumulative, and, if so, the date or dates from
which and the extent to which dividends shall be cumulative.
(c) The amount or amounts payable upon voluntary or involuntary
liquidation of the Corporation.
(d) The voting rights, if any, of the holders of shares of the series.
(e) The redemption price or prices, if any, and the terms and conditions
on which shares may be redeemed.
<PAGE> 2
(f) Whether the shares of the series shall be convertible into or
exchangeable for shares of capital stock of the Corporation or other
securities, and, if so, the conversion price or prices or the rate
or rates of conversion or exchange, any adjustments thereof, and any
other terms and conditions of conversion or exchange.
(g) Whether the shares of the series shall be entitled to the benefit of
any retirement or sinking fund to be applied to the purchase or
redemption of such shares, and, if so, the amount thereof and the
terms and conditions relative to the operation thereof.
(h) The rank of the shares of the series, as to dividends and assets, in
relation to the shares of any other class or series of capital stock
of the Corporation.
(i) Such other preferences, qualifications, privileges, limitations,
restrictions or special or relative rights of any series as are not
fixed hereby and as the Board of Directors may deem advisable and
state in such resolutions.
2. Dividends. The holders of shares of each series of Preferred Stock
shall be entitled to receive, when and as declared by the Board of Directors,
dividends at the rate which shall have been fixed hereby or by the Board of
Directors as authorized hereby with respect to such series, and no more except
as shall have been determined by the Board of Directors as authorized hereby.
If dividends on a particular series shall have been determined hereby or by the
Board of Directors as authorized hereby to be cumulative, no dividends shall be
paid or set apart for payment or declared on the Common Stock or on any class
or series of stock of the Corporation ranking as to dividends subordinate to
such series (other than dividends payable in Common Stock or in any class or
series of stock of the Corporation ranking as to dividends and assets
subordinate to such series) and no payment shall be made or set apart for the
purchase, redemption or other acquisition for value of any shares of Common
Stock or of any class or series of stock of the Corporation ranking as to
dividends or assets subordinate to such series, until dividends (to the extent
cumulative) for all past dividend periods on all outstanding shares of such
series have been paid, or declared and set apart for payment, in full. In case
dividends for any dividend period are not paid in full on all shares of
Preferred Stock ranking equally as to dividends, all such shares shall
participate ratably in the payment of dividends for such period in proportion
to the full amounts of dividends to which they are respectively entitled.
3. Liquidation of the Corporation. In the event of voluntary or
involuntary liquidation of the Corporation the holders of shares if each series
of Preferred Stock shall be entitled to receive from the assets of the
corporation (whether capital or surplus), prior to any payment to the holders
of Common Stock or of any class or series of stock of the Corporation ranking
as to assets subordinate to such series, the amount fixed hereby or by the
Board of Directors as authorized hereby for such series, plus, in case
dividends on such series shall have been determined hereby or by the Board of
Directors as authorized hereby to be cumulative, an amount equal to the accrued
and unpaid dividends thereon (to the extent cumulative) computed to the date on
which payment thereof is made available, whether or not earned or declared.
After such payment to the holders of shares of such series, any remaining
balance shall be paid to the holders of Common Stock or of any class or series
of stock of the Corporation ranking as to assets subordinate to such series, as
they may be entitled. If, upon liquidation of the Corporation, its assets are
not sufficient to pay in full the amounts so payable to the holders of shares
of all series of Preferred Stock ranking equally as to assets, all such shares
shall participate ratably in the distribution of assets in proportion to the
full amounts to which they are respectively entitled. Neither a merger nor a
consolidation of the Corporation into or with any other corporation nor a sale,
transfer or lease of all or part of the assets of the Corporation shall be
deemed a liquidation of the Corporation within the meaning of this paragraph.
4. Voting rights.
(a) Except as otherwise required by law, holders of shares of Preferred
Stock shall have only such voting rights, if any, as shall have been
fixed and determined hereby or by the Board of Directors as
authorized hereby. Except as otherwise required by law or as
otherwise provided hereby or by the Board of Directors as authorized
hereby, holders of Preferred Stock having voting rights and holders
of Common Stock shall vote together as one class.
2
<PAGE> 3
(b) If the Corporation shall have failed to pay, or declare and set
apart for payment, dividends on all outstanding shares of Preferred
Stock in an amount equal to six quarterly dividends at the rates
payable upon such shares (whether or not such dividends are
cumulative), the number of directors of the Corporation shall be
increased by two at the first annual meeting of the shareholders of
the Corporation held thereafter, and at such meeting and at each
subsequent annual meeting until cumulative dividends payable for all
past dividend periods and continuous noncumulative dividends for at
least one year on all outstanding shares of Preferred Stock entitled
thereto shall have been paid, or declared and set apart for payment,
in full, the holders of shares of Preferred Stock of all series
shall have the right, voting as a class, to elect such two
additional members of the Board of Directors to hold office for a
term of one year. Upon such payment, or such declaration and setting
apart for payment, in full, the terms of the two additional
directors so elected shall forthwith terminate, and the number of
directors of the Corporation shall be reduced by two, and such
voting right of the holders of shares of Preferred Stock shall
cease, subject to increase in the number of directors as aforesaid
and to revesting of such voting right in the event of each and every
additional failure in the payment of dividends in an amount equal to
six quarterly dividends as aforesaid.
5. Action by the Corporation requiring approval of Preferred Stock. The
Corporation shall not, without the affirmative vote at a meeting, or at the
written consent with or without a meeting, of the holders of at least
two-thirds of the then outstanding shares of Preferred Stock of all series (a)
create or increase the authorized number of shares of any class of stock
ranking as to dividends or assets prior to the Preferred Stock; or (b) change
the preferences, qualifications, privileges, limitations, restrictions or
special or relative rights granted to or imposed upon the shares of Preferred
Stock in any material respect adverse to the holders thereof, provided that if
any such change will affect any particular series materially and adversely as
contrasted with the effect thereof upon any other series, no such change may be
made without, in addition, such vote or consent of the holders of at least
two-thirds of the then outstanding shares of the particular series which would
be so affected.
6. Redemption and acquisition.
(a) Except as otherwise provided by the Board of Directors as authorized
hereby, the Corporation, at its option to be exercised by its Board
of Directors, may redeem the whole or any part of the Preferred
Stock or of any series thereof at such times and at the applicable
amount for each share which shall have been fixed and determined
hereby or by the Board of Directors as authorized hereby with
respect thereto, plus, in case dividends shall have been determined
hereby or by the Board of Directors as authorized hereby to be
cumulative, an amount equal to the accrued and unpaid dividends
thereon (to the extent cumulative) computed to the date fixed for
redemption, whether or not earned or declared (hereinafter
collectively called the "redemption price"). If at any time less
than all of the Preferred Stock then outstanding is to be called for
redemption, the Board may select one or more series to be redeemed,
and if less than all the outstanding Preferred Stock of any series
is to be called for redemption, the shares to be redeemed may be
selected by lot or by such other equitable method as the Board in
its discretion may determine. Notice of every redemption, stating
the redemption date, the redemption price, and the place of payment
thereof, and, if less than all of the Preferred Stock then
outstanding is called for redemption, identifying the shares to be
redeemed, shall be published at least once in a newspaper printed in
the English language and of general circulation in the City of
Philadelphia, Pennsylvania, or in the Borough of Manhattan, the City
of New York, New York, the first publication to be not less than 30
nor more than 60 days prior to the date fixed for redemption. Copies
of such notice shall be mailed at least 30 days and not more than 60
days prior to the date fixed for redemption to the holders of record
of the shares to be redeemed at their addresses as the same shall
appear on the books of the Corporation, but failure to give such
additional notice by mail or any defect therein or failure of any
addressee to receive it shall not affect the validity of the
proceedings for redemption. The Corporation, upon publication of the
first notice of redemption as aforesaid or upon irrevocably
authorizing the bank or trust company hereinafter mentioned to
publish such notice as aforesaid, may deposit or cause to be
deposited in trust with a bank or trust company in the City of
Philadelphia, Pennsylvania, or in the Borough of Manhattan, the City
of New York, New York, an amount equal to the redemption price of
the shares to be redeemed, which amount shall be payable to the
holders thereof upon surrender of certificates therefor on or after
3
<PAGE> 4
the date fixed for redemption or prior thereto if so directed by the
Board of Directors. Upon such deposit, or if no such deposit is made
then from and after the date fixed for redemption unless the
Corporation shall default in making payment of the redemption price
upon surrender of the certificates as aforesaid, the shares called
for redemption shall cease to be outstanding and the holders thereof
shall cease to be shareholders with respect to such shares and shall
have no interest in or claim against the Corporation with respect to
such shares other than the right to receive the redemption price
from such bank or trust company or from the Corporation, as the case
may be, without interest thereon, upon surrender of certificates as
aforesaid; provided that conversion rights of shares called for
redemption shall terminate at the close of business on the date
fixed for redemption or at such earlier time as shall have been
fixed by the Board of Directors as authorized hereby. Any funds so
deposited which shall not be required for such redemption because of
the exercise of conversion rights subsequent to the date of such
deposit shall be returned to the Corporation. In case any holder of
shares called for redemption shall not, within six years after the
date of such deposit, have claimed the amount deposited with respect
to the redemption thereof, such bank or trust company, upon demand,
shall pay over to the Corporation such unclaimed amount and shall
thereupon be relieved of all responsibility in respect thereof to
such holder, and thereafter such holder shall look only to the
Corporation for payment thereof. Any interest which may accrue on
funds so deposited shall be paid to the Corporation from time to
time.
(b) Except as otherwise provided by the Board of Directors as authorized
hereby, the Corporation shall have the right to acquire Preferred
Stock from time to time at such price or prices as the Corporation
may determine, provided that unless dividends (to the extent
cumulative) payable for all past quarterly dividend periods on all
outstanding shares of Preferred Stock entitled to cumulative
dividends have been paid, or declared and set apart for payment, in
full, the Corporation shall not acquire for value any shares of
Preferred Stock except in accordance with an offer (which may vary
as to terms offered with respect to shares of different series but
not with respect to shares of the same series) made in writing or by
publication (as determined by the Board of Directors) to all holders
of record of shares of Preferred Stock.
(c) Except as otherwise provided by the Board of Directors as authorized
hereby, Preferred Stock redeemed or acquired by the Corporation
otherwise than by conversion shall not be canceled or retired except
by action of the Board and shall have the status of authorized and
unissued Preferred Stock which may be reissued by the Board as
shares of the same or any other series until canceled and retired by
action of the Board, but, at the option of the Board, Preferred
Stock acquired otherwise than by redemption or conversion may be
held as treasury shares which may be reissued by the Board until
canceled and retired by action of the Board.
$1.80 CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A
7. Designation. A series of Preferred Stock designated $1.80 Cumulative
Convertible Preferred Stock, Series A (Redeemable) (herein called "Series A
Preferred Stock") is hereby established, consisting of 98,583 shares subject to
increase or decrease in the number of shares in accordance with the law.
8. Dividends. The dividend rate of shares of this series shall be $1.80
per share per year, payable quarterly on the tenth day of each March, June,
September and December. Dividends shall be cumulative from the March 10, June
10, September 10 or December 10 next preceding the date of issue of each share,
unless the date of issue is a quarterly dividend payment date or a date between
the record date for the determination of holders of $1.80 Cumulative
Convertible Preferred Stock of Provident National Corporation, a predecessor of
the Corporation (such stock having been converted into the Series A Preferred
Stock), entitled to receive a quarterly dividend and the date of payment of
such quarterly dividend, in either of which events such dividends shall be
cumulative from such quarterly dividend payment date.
4
<PAGE> 5
9. Liquidation. The amount payable upon shares of Series A Preferred Stock
in the event of voluntary or involuntary liquidation of the Corporation, prior
to any payment to the holders of Common Stock or of any class or series of
stock of the Corporation ranking as to assets subordinate to the Series A
Preferred Stock, shall be $40.00 per share plus an amount equal to accrued and
unpaid dividends thereon computed to the date on which payment thereof is made
available, whether or not earned or declared.
10. Redemption. Shares of Series A Preferred Stock shall be redeemable at
any time at $40.00 per share plus an amount equal to accrued and unpaid
dividends thereon computed to the date fixed for redemption, whether or not
earned or declared.
11. Voting rights. Each holder of record of Series A Preferred Stock shall
have the right to a number of votes equal to the number of full shares of
Common Stock into which the share or shares of Series A Preferred Stock
standing in his name on the books of the Corporation are at the time
convertible.
12. Conversion provisions.
(a) Shares of Series A Preferred Stock may, at the option of the holder,
be converted into Common Stock of the Corporation (as such stock may
be constituted on the conversion date) at the rate of two shares of
Common Stock for each share of Series A Preferred Stock, subject to
adjustment as provided herein; provided that, as to any shares of
Series A Preferred Stock which shall have been called for
redemption, the conversion right shall terminate at the close of
business on the date fixed for redemption.
(b) The holder of a share or shares of Series A Preferred Stock may
exercise the conversion right as to any thereof by delivering to the
Corporation, during regular business hours, at its principal office
or at the office of any of its transfer agents for the Series A
Preferred Stock or at such other place as may be designated by the
Corporation, the certificate or certificates for the shares to be
converted, duly endorsed or assigned in blank or to the Corporation
(if required by it), accompanied by written notice stating that the
holder elects to convert such shares and stating the name or names
(with address) in which the certificate or certificates for Common
Stock are to be issued. Conversion shall be deemed to have been
effected on the date when such delivery is made, and such date is
referred to herein as the "conversion date". As promptly as
practicable thereafter the Corporation shall issue and deliver to or
upon the written order of such holder, at such office or other place
designated by the Corporation, a certificate or certificates for the
number of full shares of Common Stock to which he is entitled and a
check, cash, scrip certificate or other adjustment in respect of any
fraction of a share as provided in section 12(d) below. The person
in whose name the certificate or certificates for Common Stock are
to be issued shall be deemed to have become a holder of such Common
Stock of record on the conversion date unless the transfer books of
the Corporation are closed on that date, in which event he shall be
deemed to have become a holder of such Common Stock of record on the
next succeeding date on which the transfer books are open, but the
conversion rate shall be that in effect on the conversion date.
(c) No payment or adjustment shall be made for dividends accrued on any
shares of Series A Preferred Stock converted or for dividends on any
shares of Common Stock issuable on conversion.
(d) The Corporation shall not be required to issue any fraction of a
share upon conversion of any share or shares of Series A Preferred
Stock. If more than one share of Series A Preferred Stock shall be
surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the total number of shares
of Series A Preferred Stock so surrendered. If any fractional
interest in a share of Common Stock would be deliverable upon
conversion, the Corporation shall make an adjustment therefor in
cash unless its Board of Directors shall have determined to adjust
fractional interests by issuance of scrip certificates or in some
other manner. Adjustment in cash shall be made on the basis of the
current market value of one share of Common Stock, which shall be
taken to be the last reported sale price of the Corporation's Common
Stock on the principal stock exchange on which the Common Stock is
then listed on the last business day before the conversion date or,
if there was no reported sale on that day, the average of the
closing bid and asked quotations on that exchange on that day or, if
the Common Stock is not then listed on any stock exchange, the
average of the lowest bid and the highest asked quotations in the
over-the-counter market on that day.
5
<PAGE> 6
(e) The issuance of Common Stock on conversion of Series A Preferred
Stock shall be without charge to the converting holder of Series A
Preferred Stock for any tax in respect of the issuance thereof, but
the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and
delivery of shares in any name other than that of the holder of
record on the books of the Corporation of the shares of Series A
Preferred Stock converted, and the Corporation shall not be required
to issue or deliver any certificate for shares of Common Stock
unless and until the person requesting the issuance thereof shall
have paid to the Corporation the amount of such tax or shall have
established to the satisfaction of the Corporation that such tax has
been paid.
(f) The conversion rate provided the section 12(a) shall be subject to
the following adjustments, which shall be made to the nearest
one-hundredth of a share of Common Stock or, if none, to the next
lower one-hundredth:
(1) If the Corporation shall pay to the holders of its Common Stock
a dividend in the shares of Common Stock, the conversion rate in effect
immediately prior to the record date fixed for the determination of the
holders of Common Stock entitled to such dividend shall be
proportionately increased, effective at the opening of business on the
next following full business day.
(2) If the Corporation shall split the outstanding shares of its
Common Stock into a greater number of shares or combine the outstanding
shares into a smaller number, the conversion rate in effect immediately
prior to such action shall be proportionately increased in the case of a
split or decreased in the case of a combination, effective at the
opening of business on the full business day next following the day such
action becomes effective.
(3) If the Corporation shall issue to the holders of its Common
Stock rights or warrants to subscribe for or purchase shares of its
Common Stock at a price of less than 90% of the Current Market Price (as
defined below in this paragraph) of the Corporation's Common Stock at
the record date fixed for the determination of the holders of Common
Stock entitled to such rights or warrants, the conversion rate in effect
immediately prior to said record date shall be increased, effective at
the opening of business on the next following full business day, to an
amount determined by multiplying such conversion rate by a fraction the
numerator of which is the number of shares of Common Stock of the
Corporation outstanding immediately prior to said record date plus the
number of additional shares of its Common Stock offered for subscription
or purchase and the denominator of which is said number of shares
outstanding immediately prior to said record date plus the number of
shares of Common Stock of the Corporation which the aggregate
subscription or purchase price of the total number of shares so offered
would purchase at the Current Market Price of the Corporation's Common
Stock at said record date. The term "Current Market Price" at said
record date shall mean the average of the daily last reported sale
prices per share of the Corporation's Common Stock on the principal
stock exchange on which the Common Stock is then listed during the 20
consecutive full business days commencing with the 30th full business
day before said record date, provided that if there was no reported sale
on any such day or days there shall be substituted the average of the
closing bid and asked quotations on that exchange on that day, and
provided further that if the Common Stock was not listed on any stock
exchange on any such day or days there shall be substituted the average
of the lowest bid and the highest asked quotations in the
over-the-counter market on that day.
(g) No adjustment of the conversion rate provided in section 12(a) shall
be made by reason of the issuance of Common Stock for cash except as
provided in section 12(f) (3), or by reason of the issuance of
Common Stock for property or services. Whenever the conversion rate
is adjusted pursuant to section 12(f) the Corporation shall (1)
promptly place on file at its principal office and at the office of
each of its transfer agents for the Series A Preferred Stock a
statement signed by the Chairman of the Board, the President or a
Vice President of the Corporation and by its Treasurer or an
Assistant Treasurer showing in detail the facts requiring such
adjustment and the conversion rate after such adjustment, and shall
make such statement available for inspection by shareholders of the
Corporation, and (2) cause a notice
6
<PAGE> 7
to be published at lease once in a newspaper printed in the English
language and of general circulation in the City of Philadelphia,
Pennsylvania, or in the Borough of Manhattan, the City of New York,
New York, stating that such adjustment has been made and the
adjusted conversion rate.
(h) If the Corporation shall issue to the holders of its Common Stock
rights or warrants to subscribe for or purchase shares of its Common
Stock or any other security, or if the Corporation shall distribute
to the holders of its Common Stock any evidences of indebtedness or
any other assets (excluding dividends and distributions in cash),
the Corporation shall mail to each holder of record of a share or
shares of Series A Preferred Stock, at his address as it shall
appear on the books of the Corporation, a notice stating the record
date fixed or to be fixed for the determination of the holders of
Common Stock of record entitled to such issuance or distribution.
Such notice shall be mailed at least 10 days before such record
date. Failure to mail such notice or any defect therein or failure
of any addressee to receive it shall not affect the validity of such
issuance or distribution or any vote thereon.
(i) In case of any reclassification or change in the outstanding shares
of Common Stock of the Corporation (except a split or combination of
shares) or in case of any consolidation or merger to which the
Corporation is a party (except a merger in which the Corporation is
the surviving corporation and which does not result in any
reclassification of or change in the outstanding Common Stock of the
Corporation except a split or combination of shares) or in case of
any sale or conveyance to another corporation of all or
substantially all of the property of the Corporation, effective
provision shall be made by the Corporation or by the successor or
purchasing corporation (1) that the holder of each share of Series A
Preferred stock then outstanding shall thereafter have the right to
convert such share into the kind and amount of stock and other
securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock of the Corporation into which such
share of Series A Preferred Stock might have been converted
immediately prior thereto and (2) that there shall be subsequent
adjustments of the conversion rate which shall be equivalent, as
nearly as practicable, to the adjustments provided for in section
12(f). The provisions of this section 12(i) shall similarly apply to
successive reclassifications, changes, consolidations, mergers,
sales or conveyances.
(j) Shares of Common Stock issued on conversion of shares of Series A
Preferred Stock shall be issued as fully paid shares and shall be
nonassessable by the Corporation. The Corporation shall at all times
reserve and keep available for the purpose of effecting the
conversion of Series A Preferred Stock, such number of its duly
authorized shares of Common Stock as shall be sufficient to effect
the conversion of all outstanding shares of Series A Preferred
Stock.
(k) Shares of Series A Preferred Stock converted as provided herein
shall not be reissued.
$1.80 CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES B
13. Designation. A series of Preferred Stock designated $1.80 Cumulative
Convertible Preferred Stock, Series B (Nonredeemable) (herein called "Series B
Preferred Stock") is hereby established consisting of 38,542 shares subject to
increase or decrease in the number of shares in accordance with law.
14. Dividends. The dividend rate of shares of Series B Preferred Stock
shall be $1.80 per share per year, payable quarterly on the tenth day of each
March, June, September and December. Dividends shall be cumulative from the
March 10, June 10, September 10 or December 10 next preceding the date of issue
of each share, unless the date if issue is a quarterly dividend payment date or
a date between the record date for the determination of holders of $1.80
Cumulative Convertible Preferred Stock, 1971 Series, of Provident National
Corporation, a predecessor of the Corporation (such stock having been converted
in the Series B Preferred Stock), entitled to receive a quarterly dividend and
the date of payment of such quarterly dividend, in either of which events such
dividends shall be cumulative from such quarterly dividend payment date.
7
<PAGE> 8
15. Liquidation. The amount payable upon shares of Series B Preferred
Stock in the event of voluntary or involuntary liquidation of the Corporation,
prior to any payment to the holders of Common Stock or of any class or series
of stock of the Corporation ranking as to assets subordinate to the Series B
Preferred Stock, shall be $40.00 per share plus an amount equal to accrued and
unpaid dividends thereon computed to the date on which payment thereof is made
available, whether or not earned or declared.
16. Rank. The Series B Preferred Stock shall rank, as to dividends and
assets, equally with the series of Preferred Stock of the Corporation
designated as $1.80 Cumulative Convertible Preferred Stock, Series A
(Redeemable).
17. Redemption. Shares of Series B Preferred stock shall not be
redeemable.
18. Voting rights. Each holder of record of Series B Preferred Stock shall
have the right to a number of votes equal to the number of full shares of
Common Stock into which the share or shares of Series B Preferred Stock
standing in his name on the books of the Corporation are at the time
convertible.
19. Conversion provisions.
(a) Shares of Series B Preferred Stock may, at the option of the holder,
be converted into Common Stock of the Corporation (as such stock may
be constituted on the conversion date) at the rate of two shares of
Common Stock for each share of Series B Preferred Stock, subject to
adjustment as provided herein.
(b) The holder of a share or shares of Series B Preferred Stock may
exercise the conversion right as to any thereof by delivering to the
Corporation during regular business hours, at its principal office
or at the office of any of its transfer agents for the Series B
Preferred Stock or at such other place as may be designated by the
Corporation, the certificate or certificates for the shares to be
converted, duly endorsed or assigned in blank or to the Corporation
(if required by it), accompanied by written notice stating that the
holder elects to convert such shares and stating the name or names
(with address) in which the certificate or certificates for Common
Stock are to be issued. Conversion shall be deemed to have been
effected on the date when such delivery is made, and such date is
referred to herein as the "conversion date". As promptly as
practicable thereafter the Corporation shall issue and deliver to or
upon the written order of such holder, at such office or other place
designated by the Corporation, a certificate or certificates for the
number of full shares of Common Stock to which he is entitled and a
check, cash, scrip certificate or other adjustment in respect of any
fraction of a share as provided in section 19(d) below. The person
in whose name the certificate or certificates for Common Stock are
to be issued shall be deemed to have become a holder of such Common
Stock of record on the conversion date unless the transfer books of
the Corporation are closed on that date, in which event he shall be
deemed to have become a holder of such Common Stock of record on the
next succeeding date on which the transfer books are open, but the
conversion rate shall be that in effect on the conversion date.
(c) No payment or adjustment shall be made for dividends accrued on any
shares of Series B Preferred Stock converted or for dividends on any
shares of Common stock issuable on conversion.
(d) The Corporation shall not be required to issue any fraction of a
share upon conversion of any share or shares of Series B Preferred
Stock. If more than one share of Series B Preferred Stock shall be
surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the total number of shares
of Series B Preferred Stock so surrendered. If any fractional
interest in a share of Common Stock would be deliverable upon
conversion, the Corporation shall make an adjustment therefor in
cash unless its Board of Directors shall have determined to adjust
fractional interests by issuance of scrip certificates or in some
other manner. Adjustment in cash shall be made on the basis of the
current market value of one share of Common Stock, which shall be
taken to be the last reported sale price of the Corporation's Common
Stock on the principal stock exchange on which the Common Stock is
then listed on the last business day before the conversion date or,
if there was no reported sale on that day, the average of the
closing bid and asked quotations on that exchange on that day or, if
the Common Stock is not then listed on any stock exchange, the
average of the lowest bid and the highest asked quotations in the
over-the-counter market on that day.
8
<PAGE> 9
(e) The issuance of Common Stock on conversion of Series B Preferred
Stock shall be without charge to the converting holder of Series B
Preferred Stock for any tax in respect of the issuance thereof, but
the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and
delivery of shares in any name other than that of the holder or
record on the books of the Corporation of the shares of Series B
Preferred Stock converted, and the Corporation shall not be required
to issue or deliver any certificate for shares of Common Stock
unless and until the person requesting the issuance thereof shall
have paid to the Corporation the amount of such tax or shall have
established to the satisfaction of the Corporation that such tax has
been paid.
(f) The conversion rate provided the section 19(a) above shall be
subject to the following adjustments, which shall be made to the
nearest one-hundredth of a share of Common Stock or, if none, to the
next lower one-hundredth:
(1) If the Corporation shall pay to the holders of its Common Stock
a dividend in the shares of Common Stock, the conversion rate in effect
immediately prior to the record date fixed for the determination of the
holders of Common Stock entitled to such dividend shall be
proportionately increased, effective at the opening of business on the
next following full business day.
(2) If the Corporation shall split the outstanding shares of its
Common stock into a greater number of shares of combine the outstanding
shares into a smaller number, the conversion rate in effect immediately
prior to such action shall be proportionately increased in the case of a
split or decreased in the case of a combination, effective at the
opening of business on the full business day next following the day such
action becomes effective.
(3) If the Corporation shall issue to the holders of its Common
Stock rights or warrants to subscribe for or purchase shares of its
Common Stock at a price of less than 90% of the Current Market Price (as
defined below in this paragraph) of the Corporation's Common Stock at
the record date fixed for the determination of the holders of Common
Stock entitled to such rights or warrants, the conversion rate in effect
immediately prior to said record date shall be increased, effective at
the opening of business on the next following full business day, to an
amount determined by multiplying such conversion rate by a fraction the
numerator of which is the number of shares of Common Stock of the
Corporation outstanding immediately prior to said record date plus the
number of additional shares of its Common Stock offered for subscription
or purchase and the denominator of which is said number of shares
outstanding immediately prior to said record date plus the number of
shares of Common Stock of the Corporation which the aggregate
subscription or purchase price of the total number of shares so offered
would purchase at the Current Market Price of the Corporation's Common
Stock at said record date. The term "Current Market Price" at said
record date shall mean the average of the daily last reported sale
prices per share of the Corporation's Common Stock on the principal
stock exchange on which the Common Stock is then listed during the 20
consecutive full business days commencing with the 30th full business
day before said record date, provided that if there was no reported sale
on any such day or days there shall be substituted the average of the
closing bid and asked quotations on that exchange on that day, and
provided further that if the Common Stock was not listed on any stock
exchange on any such day or days there shall be substituted the average
of the lowest bid and the highest asked quotations in the
over-the-counter market on that day.
(g) No adjustment of the conversion rate provided in section 19(a) above
shall be made by reason of the issuance of Common Stock for cash
except as provided in section 19(f)(3) above, or by reason of the
issuance of Common Stock for property or services. Whenever the
converson rate is adjusted pursuant to section 19(f) above the
Corporation shall (1) promptly place on file at its principal office
and at the office of each of its transfer agents for the Series B
Preferred Stock a statement signed by the Chairman of the Board, the
President or a Vice President of the Corporation and by its
Treasurer or an Assistant Treasurer showing in detail the facts
requiring such adjustment and the conversion rate after such
adjustment, and shall make such statement available for inspection
by shareholders of the Corporation,
9
<PAGE> 10
and (2) cause a notice to be published at least once in a newspaper
printed in the English language and of general circulation in the
City of Philadelphia, Pennsylvania, or in the Borough of Manhattan,
the City of New York, New York, stating that such adjustment has
been made and the adjusted conversion rate.
(h) If the Corporation shall issue to the holders of its Common Stock
rights or warrants to subscribe for or purchase shares of its Common
Stock or any other security, or if the Corporation shall distribute
to the holders of its Common Stock any evidences of indebtedness of
any other assets (excluding dividends and distributions in cash),
the Corporation shall mail to each holder of record of a share or
shares of Series B Preferred Stock, at his address as it shalll
appear on the books of the Corporation, a notice stating the record
date fixed or to be fixed for the determination of the holders of
Common Stock of record entitled to such issuance or distribution.
Such notice shall be mailed at least 10 days before such record
date. Failure to mail such notice or any defect therein or failure
of any addressee to receive it shall not affect the validity of such
issuance or distribution of any vote thereon.
(i) In case of any reclassification or change of the outstanding shares
of Common Stock of the Corporation (except a split or combination of
shares) or in case of any consolidation or merger to which the
Corporation is a party (except a merger in which the Corporation is
the surviving corporation and which does not result in any
reclassification of or change in the outstanding Common Stock of the
Corporation except a split or combination of shares) or in case of
any sale or conveyance to another corporation of all or
substantially all of the property of the Corporation, effective
provision shall be made by the Corporation or by the successor or
purchasing corporation (1) that the holder of each share of Seres B
Preferred Stock then outstanding shall thereafter have the right to
convert such share into the kind and amount of stock and other
securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock of the Corporation into which such
share of Series B Preferred Stock might have been converted
immediately prior thereto, and (2) that there shall be subsequent
adjustments of the conversion rate which shall be equivalent, as
nearly as practicable, to the adjustments provided for in section
19(f) above. The provisions of this section 19(i) shall similarly
apply to successive reclassifications, changes, consolidations,
mergers, sales or conveyances.
(j) Shares of Common Stock issued on conversion of shares of Series B
Preferred Stock shall be issued as fully paid shares and shall be
nonassessable by the Corporation. The Corporation shall at all times
reserve and keep available for the purpose of effecting the
conversion of Series B Preferred Stock, such number of its duly
authorized shares of Common Stock as shall be sufficient to effect
the conversion of all outstanding shares of Series B Preferred
Stock.
(k) Shares of Series B Preferred Stock converted as provided herein
shall not be reissued.
20. Retirement or sinking fund. The shares of Series B Preferred Stock
shall not be entitled to the benefit of any retirement or sinking fund to be
applied to the purchase or redemption of such shares.
COMMON STOCK
21. Each holder of record of Common Stock shall have the right to one vote
for each share of Common Stock standing in his name on the books of the
Corporation.
PROVISIONS APPLICABLE TO ALL CLASSES OF CAPITAL STOCK
22. No holder of any class of capital stock of the Corporation shall be
entitled to cumulate his votes for the election of directors.
23. No holder of any class of capital stock of the Corporation shall have
preemptive rights, and the Corporation shall have the right to issue and to
sell to any person or persons any shares of its capital stock or any option
rights or
10
<PAGE> 11
any securities having conversion or option rights, without first offering such
shares, rights or securities to any holders of any class of capital stock of
the Corporation.
[The following text contains resolutions of the Corporation's Board of
Directors relating to additional authorized and outstanding series of Preferred
Stock.]
RESOLVED, that a third series of Preferred Stock, par value $1.00 of the
Corporation is hereby established and that the shares of said series shall
have, in addition to the preferences, qualifications, privileges, limitations,
restrictions and special or relative rights in respect of Preferred Stock
granted or created by law and by the Corporation's Articles of Incorporation,
the following preferences, qualifications, privileges, limitations,
restrictions and special or relative rights which are hereby fixed and
determined:
1. Designation. A series of Preferred Stock designated "$1.60 Cumulative
Convertible Preferred Stock, Series C" (herein called "Series C Preferred
Stock") is hereby established, consisting of 1,433,935 shares subject to
increase or decrease in the number of shares in accordance with the law.
2. Rank. Series C Preferred Stock shall rank, as to dividends and assets,
equally with the Series A Preferred Stock and the Series B Preferred Stock and
every other share of capital stock from time to time outstanding which is not
Common Stock of the Corporation and which is not specifically made senior or
subordinate to the Series C Preferred Stock as to dividends or assets.
3. Dividends. The dividend rate of shares of this series shall be $1.60
per share per year, payable in equal quarterly installments on the first day of
each January, April, July and October. Dividends shall be cumulative from the
January 1, April 1, July 1 and October 1 next preceding the date of issue of
each share, unless the date of issue is a quarterly dividend payment date or a
date between the record date for the determination of holders of record of
Series C Preferred Stock entitled to receive a quarterly dividend and the date
of payment of such quarterly dividend, in either of which events such dividends
shall be cumulative from such dividend payment date.
4. Liquidation. The amount payable upon shares of Series C Preferred Stock
in the event of voluntary or involuntary liquidation of the Corporation, prior
to any payment to the holders of Common Stock or of any class or series of
stock of the Corporation ranking as to assets subordinate to the Series C
Preferred Stock, shall be $20.00 per share plus an amount equal to accrued and
unpaid dividends thereon computed to the date on which payment thereof is made
available, whether or not earned or declared.
5. Redemption. Shares of Series C Preferred Stock shall be redeemable at
any time after [insert the first day of the month following the fifth
anniversary of the Effective Date of the Merger] at $20.00 per share plus an
amount equal to accrued and unpaid dividends thereon computed to the date fixed
for redemption, whether or not earned or declared.
6. Voting rights. Each holder of record of Series C Preferred Stock shall
have the right to a number of votes equal to the number of full shares of
Common Stock into which the share or shares of Series C Preferred Stock
standing in his name on the books of the Corporation are at the time
convertible.
7. Conversion provisions.
(a) Shares of Series C Preferred Stock may, at the option of the holder,
be converted into Common Stock of the Corporation (as such stock may
be constituted on the conversion date) at the conversion price,
determined as hereinafter provided, in effect at the time of
conversion, subject to adjustment as provided herein; provided that,
as to any shares of Series C Preferred Stock which shall have been
called for redemption, the conversion right shall terminate at the
close of business on the date fixed for redemption. The value of
each share on Series C Preferred Stock for the purpose of such
conversion shall be $20.00. The price at which shares of Common
Stock of the Corporation shall be delivered upon conversion (herein
called the "conversion price") shall initially be $48.00 per share
of Common Stock of the Corporation.
11
<PAGE> 12
(b) The holder of a share or shares of Series C Preferred Stock may
exercise the conversion right as to any thereof by delivering to the
Corporation, during regular business hours, at its principal office
or at the office of any of its transfer agents for the Series C
Preferred Stock or at such other place as may be designated by the
Corporation, the certificate or certificates for the shares to be
converted, duly endorsed or assigned in blank or to the Corporation
(if required by it), accompanied by written notice stating that the
holder elects to convert such shares and stating the name or names
(with address) in which the certificate or certificates for Common
Stock are to be issued. Conversion shall be deemed to have been
effected on the date when such delivery is made, and such date is
referred to herein as the "conversion date". As promptly as is
practicable thereafter the Corporation shall issue and deliver to or
upon the written order of such holder, at such office or other place
designated by the Corporation, a certificate or certificates for the
number of full shares of Common Stock to which he is entitled and
cash, scrip certificate or other adjustment in respect of any
fraction of a share as provided in section 7(d) below. The person in
whose name the certificate or certificates for Common Stock are to
be issued shall be deemed to have become a holder of such Common
Stock of record on the conversion date unless the transfer books of
the Corporation are closed on that date, in which event he shall be
deemed to have become a holder of such Common Stock of record on the
next suceeding date on which the transfer books are open, but the
conversion price shall be that in effect on the conversion date.
(c) No payment or adjustment shall be made for dividends accrued on any
shares of Series C Preferred Stock converted or for dividends on any
shares of Common Stock issuable on conversion.
(d) The Corporation shall not be required to issue any fraction of a
share upon conversion of any share or shares of Series C Preferred
Stock. If more than one share of Series C Preferred Stock shall be
surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the total number of shares
of Series C Preferred Stock so surrendered. If any fractional
interest in a share of Common Stock would be deliverable upon
conversion, the Corporation shall make an adjustment therefor in
cash unless its Board of Directors shall have determined to adjust
fractional interests by issuance of scrip certificates or in some
other manner. Adjustment in cash shall be made on the basis of the
current market value of one share of Common Stock, which shall be
taken to be the last reported sale price of the Corporation's Common
Stock on the principal stock exchange on which the Common Stock is
then listed (or if not so listed, on the over-the-counter market)
for the last business day before the conversion date or, if there
was no reported sale on that day, the last reported sales price on
the first preceding day for which such price is available.
(e) The issuance of Common Stock on conversion of Series C Preferred
Stock shall be without charge to the converting holder of Series C
Preferred Stock for any tax in respect of the issuance thereof, but
the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and
delivery of shares in any name other than that of the holder of
record on the books of the Corporation of the shares of Series C
Preferred Stock converted, and the Corporation shall not be required
to issue or deliver any certificate for shares of Common Stock
unless and until the person requesting the issuance thereof shall
have paid to the Corporation the amount of such tax or shall have
established to the satisfaction of the Corporation that such tax has
been paid.
(f) The conversion price provided in section 7(a) shall be subject to
the following adjustments, which shall be made to the nearest cent:
(1) If the Corporation shall pay to the holders of its Common Stock
a dividend in the shares of Common Stock, the conversion rate in effect
immediately prior to the record date fixed for the determination of the
holders of Common Stock entitled to such dividend shall be
proportionately decreased, effective at the opening of business on the
next following full business day.
(2) If the Corporation shall split the outstanding shares of its
Common stock into a greater number of shares or combine the outstanding
shares into a smaller number, the conversion price in effect immediately
prior to such action shall be proportionately decreased in the case of a
split or increased in the case of
12
<PAGE> 13
a combination, effective at the opening of business on the full business
day next following the day such action becomes effective.
(3) If the Corporation shall issue to the holders of its Common
Stock rights or warrants to subscribe for or purchase shares of its
Common Stock at a price of less than 90% of the Current Market Price (as
defined below in this paragraph) of the Corporation's Common Stock at
the record date fixed for the determination of the holders of Common
Stock entitled to such rights or warrants, the conversion price in
effect immediately prior to said record date shall be adjusted,
effective at the opening of business on the next following full business
day, to an amount determined by multiplying such conversion rate by a
fraction the numerator of which is the number of shares of Common Stock
of the Corporation outstanding immediately prior to said record date
plus the number of shares of Common Stock of the Corporation which the
aggregate subscription or purchase price of the total number of shares
so offered would purchase at the Current Market Price of the
Corporation's Common Stock at said record date and the denominator of
which is said number of shares outstanding immediately prior to said
record date plus the number of additional shares of its Common Stock
offered for subscription or purchase. The term "Current Market Price" at
said record date shall mean the average of the daily last reported sale
prices per share of the Corporation's Common Stock on the principal
stock exchange on which the Common Stock is then listed (or if not so
listed, then on the over-the-counter market) during 20 consecutive full
business days commencing with the 30th full business day before said
record date, provided that if there was no reported sale on any such day
or days there shall be substituted the average of the closing bid and
asked quotations on that day obtained from the market specialist
assigned to the Corporation (or a market maker in the case of the
over-the-counter market).
(4) The Corporation may make such reductions in the conversion
price, in addition to those required by the foregoing provisions, as it
considers to be advisable in order that any event treated for federal
income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
(g) No adjustment of the conversion rate provided in section 7(a) shall
be made by reason of the issuance of Common Stock for cash except as
provided in section 7(f)(3), or by reason of the issuance of Common
Stock for property or services. Whenever the conversion rate is
adjusted pursuant to section 7(f) the Corporation shall (1) promptly
place on file at its principal office and at the office of each of
its transfer agents for the Series C Preferred Stock a statement
signed by the Chairman of the Board, the President or a Vice
President of the Corporation and by its Treasurer or an Assistant
Treasurer showing in detail the facts requiring such adjustment and
the conversion price after such adjustment, and shall make such
statement available for inspection by shareholders on the
Corporation, and (2) cause a notice to be published at least once in
a newspaper printed in the English language and of general
circulation in the City of Erie, Pennsylvania, and in the Borough of
Manhattan, the City of New York, New York, stating that such
adjustment has been made and the adjusted conversion price.
(h) If the Corporation shall issue to the holders of its Common Stock
rights or warrants to subscribe for or purchase shares of its Common
Stock or any other security, or if the Corporation shall distribute
to the holders of its Common Stock any evidences of indebtedness of
any other assets (excluding dividends and distributions in cash),
the Corporation shall mail to each holder of record of a share or
shares of Series C Preferred Stock, at his address as it shall
appear on the books of the Corporation, a notice stating the record
date fixed or to be fixed for the determination of the holders of
Common Stock of record entitled to such issuance or distribution.
Such notice shall be mailed at least 10 days before such record
date. Failure to mail such notice or any defect therein or failure
of any addressee to receive it shall not affect the validity of such
issuance or distribution of any vote thereon.
(i) In case of any reclassification or change of the outstanding shares
of Common Stock of the Corporation (except a split or combination of
shares) or in case of any consolidation or merger to which the
Corporation is a party (except a merger in which the Corporation is
the surviving corporation and which does not result in any
reclassification of or change in the outstanding Common Stock of the
Corporation except an increase in the number of outstanding shares
or a split or combination of shares) or in case of
13
<PAGE> 14
any sale or conveyance to another corporation of all or
substantially all of the property of the Corporation, effective
provision shall be made by the Corporation or by the successor or
purchasing corporation (1) that the holder of each share of Series C
Preferred Stock then outstanding shall thereafter have the right to
convert such share into the kind and amount of stock and other
securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock of the Corporation into which such
share of Series C Preferred Stock might have been converted
immediately prior thereto, and (2) that there shall be subsequent
adjustments of the conversion price which shall be equivalent, as
nearly as practicable, to the adjustments provided for in section
7(f). The provisions of this section 7(i) shall similarly apply to
successive reclassifications, changes, consolidations, mergers,
sales or conveyances.
(j) Shares of Common Stock issued on conversion of shares of Series C
Preferred Stock shall be issued as fully paid shares and shall be
nonassessable by the Corporation. The Corporation shall at all times
reserve and keep available for the purpose of effecting the
conversion of Series C Preferred Stock, such number of its duly
authorized shares of Common Stock as shall be sufficient to effect
the conversion of all outstanding shares of Series C Preferred
Stock.
(k) Shares of Series C Preferred Stock converted as provided herein
shall not be reissued.
14
<PAGE> 15
RESOLVED, that a fourth series of Preferred Stock, par value $1.00 of the
Corporation is hereby established and that the shares of said series shall
have, in addition to the preferences, qualifications, privileges, limitations,
restrictions and special or relative rights in respect of Preferred Stock
granted or created by law and by the Corporation's Articles of Incorporation,
the following preferences, qualifications, privileges, limitations,
restrictions and special or relative rights which are hereby fixed and
determined.
1. Designation. A series of Preferred Stock designated "$1.80 Cumulative
Convertible Preferred Stock, Series D" (herein called "Series D Preferred
Stock") is hereby established, consisting of 1,766,140 shares subject to
increase or decrease in the number of shares in accordance with the law.
2. Rank. Series D Preferred Stock shall rank, as to dividends and assets,
equally with the Series A Preferred Stock, the Series B Preferred Stock and the
Series C Preferred Stock and every other share of capital stock from time to
time outstanding which is not Common Stock of the Corporation and which is not
specifically made senior or subordinate to the Series D Preferred Stock as to
dividends or assets.
3. Dividends. The dividend rate of shares of this series shall be $1.80
per share per year, payable in equal quarterly installments on the first day of
each January, April, July and October. Dividends shall be cumulative from the
January 1, April 1, July 1 and October 1 next preceding the date of issue of
each share, unless the date of issue is a quarterly dividend payment date or a
date between the record date for the determination of holders of record of the
Series D Preferred Stock entitled to receive a quarterly dividend and the date
of payment of such quarterly dividend, in either of which events such dividends
shall be cumulative from such dividend payment date.
4. Liquidation. The amount payable upon shares of Series D Preferred Stock
in the event of voluntary or involuntary liquidation of the Corporation, prior
to any payment to the holders of Common Stock or of any class or series of
stock of the Corporation ranking as to assets subordinate to the Series D
Preferred Stock, shall be $20.00 per share plus an amount equal to accrued and
unpaid dividends thereon computed to the date on which payment thereof is made
available, whether or not earned or declared.
5. Redemption. Shares of Series D Preferred Stock shall be redeemable at
any time after [insert the first day of the month following the fifth
anniversary of the Effective Date of the Merger] at $20.00 per share plus an
amount equal to the accrued and unpaid dividends thereon computed to the date
fixed for redemption, whether or not earned or declared.
6. Voting rights. Each holder of record of Series D Preferred Stock shall
have the right to a number of votes equal to the number of full shares of
Common Stock into which the share or shares of Series D Preferred Stock
standing in his name on the books of the Corporation are at the time
convertible.
7. Conversion provisions.
(a) Shares of Series D Preferred Stock may, at the option of the holder,
be converted into Common Stock of the Corporation (as such stock may
be constituted on the conversion date) at the conversion price,
determined as hereinafter provided, in effect at the time of
conversion, subject to adjustment as provided herein; provided that,
as to any shares of Series D Preferred Stock which shall have been
called for redemption, the conversion right shall terminate at the
close of business on the date fixed for redemption. The value of
each share on Series D Preferred Stock for the purpose of such
conversion shall be $20.00. The price at which shares of Common
Stock of the Corporation shall be delivered upon conversion (herein
called the "conversion price") shall initially be $48.00 per share
of Common Stock of the Corporation.
(b) The holder of a share or shares of Series D Preferred Stock may
exercise the conversion right as to any thereof by delivering to the
Corporation, during regular business hours, at its principal office
or at the office of any of its transfer agents for the Series D
Preferred Stock or at such other place as may be designated by the
Corporation, the certificate or certificates for the shares to be
converted, duly endorsed or assigned in blank or to the Corporation
(if required by it), accompanied by written notice stating that the
holder elects to convert such shares and stating the name or names
(with address) in which the
15
<PAGE> 16
certificate or certificates for Common Stock are to be issued.
Conversion shall be deemed to have been effected on the date when
such delivery is made, and such date is referred to herein as the
"conversion date". As promptly as practicable thereafter the
Corporation shall issue and deliver to or upon the written order of
such holder, at such office or other place designated by the
Corporation, a certificate or certificates for the number of full
shares of Common Stock to which he is entitled and cash, scrip
certificate or other adjustment in respect of any fraction of a
share as provided in section 7(d) below. The person in whose name
the certificate or certificates for Common Stock are to be issued
shall be deemed to have become a holder of such Common Stock of
record on the conversion date unless the transfer books of the
Corporation are closed on that date, in which event he shall be
deemed to have become a holder of such Common Stock of record on the
next succeeding date on which the transfer books are open, but the
conversion price shall be that in effect on the conversion date.
(c) No payment or adjustment shall be made for dividends accrued on any
shares of Series D Preferred Stock converted or for dividends on any
shares of Common Stock issuable on conversion.
(d) The Corporation shall not be required to issue any fraction of a
share upon conversion of any share or shares of Series D Preferred
Stock. If more than one share of Series D Preferred Stock shall be
surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the total number of shares
of Series D Preferred Stock so surrendered. If any fractional
interest in a share of Common Stock would be deliverable upon
conversion, the Corporation shall make an adjustment therefor in
cash unless its Board of Directors shall have determined to adjust
fractional interests by issuance of scrip certificates or in some
other manner. Adjustment in cash shall be made on the basis of the
current market value of one share of Common Stock, which shall be
taken to be the last reported sale price of the Corporation's Common
Stock on the principal stock exchange on which the Common Stock is
then listed (or if not so listed, on the over-the-counter market)
for the last business day before the conversion date or, if there
was no reported sale on that day, the last reported sales price on
the first preceding day for which such price is available.
(e) The issuance of Common Stock on conversion of Series D Preferred
Stock shall be without charge to the converting holder of Series D
Preferred Stock for any tax in respect of the issuance thereof, but
the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and
delivery of shares in any name other than that of the holder of
record on the books of the Corporation of the shares of Series D
Preferred Stock converted, and the Corporation shall not be required
to issue or deliver any certificate for shares of Common Stock
unless and until the person requesting the issuance thereof shall
have paid to the Corporation the amount of such tax or shall have
established to the satisfaction of the Corporation that such tax has
been paid.
(f) The conversion price provided the section 7(a) shall be subject to
the following adjustments, which shall be made to the cent:
(1) If the Corporation shall pay to the holders of its Common Stock
a dividend in shares of Common Stock, the conversion price in effect
immediately prior to the record date fixed for the determination of the
holders of Common Stock entitled to such dividend shall be
proportionately decreased, effective at the opening of business on the
next following full business day.
(2) If the Corporation shall split the outstanding shares of its
Common stock into a greater number of shares or combine the outstanding
shares into a smaller number, the conversion price in effect immediately
prior to such action shall be proportionately decreased in the case of a
split or increased in the case of a combination, effective at the
opening of business on the full business day next following the day such
action becomes effective.
(3) If the Corporation shall issue to the holders of its Common
Stock rights or warrants to subscribe for or purchase shares of its
Common Stock at a price of less than 90% of the Current Market Price (as
defined below in this paragraph) of the Corporation's Common Stock at
the record date fixed for the
16
<PAGE> 17
determination of the holders of Common Stock entitled to such rights or
warrants, the conversion price in effect immediately prior to said
record date shall be adjusted, effective at the opening of business on
the next following full business day, to an amount determined by
multiplying such conversion price by a fraction the numerator of which
is the number of shares of Common Stock of the Corporation outstanding
immediately prior to said record date plus the number of shares of
Common Stock of the Corporation which the aggregate subscription or
purchase price of the total number of shares so offered would purchase
at the Current Market Price of the Corporation's Common Stock at said
record date and the denominator of which is said number of shares
outstanding immediately prior to said record date plus the number of
additional shares of its Common Stock offered for subscription or
purchase. The term "Current Market Price" at said record date shall mean
the average of the daily last reported sale prices per share of the
Corporation's Common Stock on the principal stock exchange on which the
Common Stock is then listed (or if not so listed, then on the
over-the-counter market) during 20 consecutive full business days
commencing with the 30th full business day before said record date,
provided that if there was no reported sale on any such day or days
there shall be substituted the average of the closing bid and asked
quotations on that day obtained from the market specialist assigned to
the Corporation (or a market maker in the case of the over-the-counter
market).
(4) The Corporation may make such reductions in the conversion
price, in addition to those required by the foregoing provisions, as it
considers to be advisable in order that any event treated for federal
income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
(g) No adjustment of the conversion price provided in section 7(a) shall
be made by reason of the issuance of Common Stock for cash except as
provided in section 7(f)(3), or by reason of the issuance of Common
Stock for property or services. Whenever the conversion price is
adjusted pursuant to section 7(f) the Corporation shall (1) promptly
place on file at its principal office and at the office of each of
its transfer agents for the Series D Preferred Stock a statement
signed by the Chairman of the Board, the President or a Vice
President of the Corporation and by its Treasurer or an Assistant
Treasurer showing in detail the facts requiring such adjustment and
the conversion price after such adjustment, and shall make such
statement available for inspection by shareholders of the
Corporation, and (2) cause a notice to be published at least once in
a newspaper printed in the English language and of general
circulation in the City of Scranton, Pennsylvania, and in the
Borough of Manhattan, the City of New York, New York, stating that
such adjustment has been made and the adjusted conversion price.
(h) If the Corporation shall issue to the holders of its Common Stock
rights or warrants to subscribe for or purchase shares of its Common
Stock or any other security, or if the Corporation shall distribute
to the holders of its Common Stock any evidences of indebtedness of
any other assets (excluding dividends and distributions in cash),
the Corporation shall mail to each holder of record of a share or
shares of Series D Preferred Stock, at his address as it shall
appear on the books of the Corporation, a notice stating the record
date fixed or to be fixed for the determination of the holders of
Common Stock of record entitled to such issuance or distribution.
Such notice shall be mailed at least 10 days before such record
date. Failure to mail such notice or any defect therein or failure
of any addressee to receive it shall not affect the validity of such
issuance or distribution of any vote thereon.
(i) In case of any reclassification or change of the outstanding shares
of Common Stock of the Corporation (except a split or combination of
shares) or in case of any consolidation or merger to which the
Corporation is a party (except a merger in which the Corporation is
the surviving corporation and which does not result in any
reclassification of or change in the outstanding Common Stock of the
Corporation except an increase in the number of outstanding shares
or a split or combination of shares) or in case of any sale or
conveyance to another corporation of all or substantially all of the
property of the Corporation, effective provision shall be made by
the Corporation or by the successor or purchasing corporation (1)
that the holder of each share of Series D Preferred Stock then
outstanding shall thereafter have the right to convert such share
into the kind and amount of stock and other securities and property
receivable upon such reclassification, change, consolidation,
merger, sale or conveyance by a holder of the number of shares of
Common Stock of the Corporation into which such share of Series D
Preferred
17
<PAGE> 18
Stock might have been converted immediately prior thereto, and (2)
that there shall be subsequent adjustments of the conversion price
which shall be equivalent, as nearly as practicable, to the
adjustments provided for in section 7(f). The provisions of this
section 7(i) shall similarly apply to successive reclassifications,
changes, consolidations, mergers, sales or conveyances.
(j) Shares of Common Stock issued on conversion of shares of Series D
Preferred Stock shall be issued as fully paid shares and shall be
nonassessable by the Corporation. The Corporation shall at all times
reserve and keep available for the purpose of effecting the
conversion of Series D Preferred Stock, such number of its duly
authorized shares of Common Stock as shall be sufficient to effect
the conversion of all outstanding shares of Series D Preferred
Stock.
(k) Shares of Series D Preferred Stock converted as provided herein
shall not be reissued.
[References to a former series of Preferred Stock, designated as $2.60
Cumulative Non-Voting Preferred Stock, Series E have been deleted, since all
such shares have been redeemed and restored to the status of authorized but
unissued Preferred Stock.]
18
<PAGE> 1
Exhibit 99.2
PNC Bank Corp.
Resolutions for Fixed/Adjustable Rate Noncumulative Preferred Stock, Series F
($1.00 par value) Adopted October 4, 1996
RESOLVED, that another series of Preferred Stock, par value $1.00 per share, of
PNC Bank Corp. (the "Corporation") is hereby established and that the shares of
said series shall have, in addition to the preferences, qualifications,
privileges, limitations, restrictions and special or relative rights in respect
of Preferred Stock granted or created by law and by the Corporation's Articles
of Incorporation, the following preferences, qualifications, privileges,
limitations, restrictions and special or relative rights which are hereby fixed
and determined:
1. Designation. A series of Preferred Stock designated "Fixed/Adjustable Rate
Noncumulative Preferred Stock, Series F" (herein called "Series F Preferred
Stock") is hereby established, consisting of 6,000,000 shares subject to
increase or decrease in the number of shares in accordance with law.
2. Rank. Series F Preferred Stock shall rank, as to dividends and assets,
equally with the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock, the Series D Preferred Stock and every other share of
capital stock from time to time outstanding which is not Common Stock of the
Corporation and which is not specifically made senior to or subordinate to the
Series F Preferred Stock as to dividends or assets.
3. Dividends. (a) Through September 29, 2001, the dividend rate per share of
Series F Preferred Stock shall be 6.05% or $3.025 per annum, payable quarterly
on March 31, June 30, September 30 and December 31 of each year (each a
"Dividend Payment Date"), commencing December 31, 1996. The initial dividend
for the dividend period commencing on October 9, 1996 to (but not including)
December 31, 1996, shall be $.6806 per share and shall be payable on December
31, 1996. On and after September 30, 2001, dividends on the Series F Preferred
Stock shall be payable quarterly on each Dividend Payment Date at the
Applicable Rate (as defined in subsection (c) of this Section 3) per share from
time to time in effect. If a Dividend Payment Date is not a business day,
dividends (if declared) on the Series F Preferred Stock shall be paid on the
immediately preceding business day. A dividend period with respect to a
Dividend Payment Date is the period commencing on the immediately preceding
Dividend Payment Date and ending on the day immediately prior to the next
succeeding Dividend Payment Date. Each such dividend shall be payable to
holders of record as they appear on the stock books of the Corporation on such
record dates, not more than 30 nor less than 15 days preceding the payment
dates thereof, as will be fixed by the Corporation's Board of Directors or a
duly authorized committee thereof.
(b) Dividends on the Series F Preferred Stock shall not be cumulative and no
rights shall accrue to the holders of the Series F Preferred Stock by reason of
the fact that the Corporation may fail to declare or pay dividends on the
Series F Preferred Stock in any amount in any year, whether or not the earnings
of the Corporation in any year were sufficient to pay such dividends in whole
or in part. (c) Except as provided below in this subsection (c) of this Section
3, the "Applicable Rate" per annum for any dividend period beginning on or
after September 30, 2001 shall be equal to .35% plus
1
<PAGE> 2
the Effective Rate (as hereinafter defined), but not less than 6.55% nor
greater than 12.55% (without taking into account any adjustments as described
in subsection (d) of this Section 3). The "Effective Rate" for any dividend
period beginning on or after September 30, 2001 shall be equal to the highest
of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty
Year Constant Maturity Rate (each as hereinafter defined) for such dividend
period. In the event that the Corporation determines in good faith that for
any reason: (i) any one of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate cannot be determined
for any dividend period, then the Effective Rate for such dividend period shall
be equal to the higher of whichever two of such rates can be so determined;
(ii) only one of the Treasury Bill Rate, the Ten Year Constant Maturity Rate or
the Thirty Year Constant Maturity Rate can be determined for any dividend
period, then the Effective Rate for such dividend period shall be equal to
whichever such rate can be so determined; or (iii) none of the Treasury Bill
Rate, the Ten Year Constant Maturity Rate or the Thirty Year Constant Maturity
Rate can be determined for any dividend period, then the Effective Rate for the
preceding dividend period shall be continued for such dividend period.
Except as described in this subsection (c) of this Section 3, the "Treasury
Bill Rate" for each dividend period shall be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published during the relevant
Calendar Period (as hereinafter defined)) for three-month U.S. Treasury bills,
as published weekly by the Federal Reserve Board (as hereinafter defined)
during the Calendar Period immediately preceding the last 10 calendar days
preceding the dividend period for which the dividend rate on the Series F
Preferred Stock is being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum market discount rate during any
such Calendar Period, then the Treasury Bill Rate for such dividend period
shall be the arithmetic average of the two most recent weekly per annum market
discount rates (or the one weekly per annum market discount rate, if only one
such rate is published during the relevant Calendar Period) for three-month
U.S. Treasury bills, as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency selected by
the Corporation. In the event that a per annum market discount rate for
three-month U.S. Treasury bills is not published by the Federal Reserve Board
or by any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Treasury Bill Rate for such dividend
period shall be the arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market discount rate, if
only one such rate is published during the relevant Calendar Period) for all of
the U.S. Treasury bills then having remaining maturities of not less than 80
nor more than 100 days, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such rates, by
any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that the Corporation determines in
good faith that for any reason no such U.S. Treasury bill rates are published
as provided above during such Calendar Period, then the Treasury Bill Rate for
such dividend period shall be the arithmetic average of the per annum market
discount rates based upon the closing bids during such Calendar Period for each
of the issues of marketable non-interest-bearing U.S. Treasury securities with
a remaining maturity of not less than 80 nor more than 100 days from the date
of each such quotation, as chosen and quoted daily for each business day in New
York City (or less frequently if daily quotations are not generally available)
to the Corporation by
2
<PAGE> 3
at least three recognized dealers in U.S. Government securities selected by the
Corporation. In the event that the Corporation determines in good faith that
for any reason the Corporation cannot determine the Treasury Bill Rate for any
dividend period as provided in this paragraph, the Treasury Bill Rate for such
dividend period shall be the arithmetic average of the per annum market
discount rates based upon the closing bids during such Calendar Period for each
of the issues of marketable interest-bearing U.S. Treasury securities with a
remaining maturity of not less than 80 or more than 100 days, as chosen and
quoted daily for each business day in New York City (or less frequently if
daily quotations are not generally available) to the Corporation by at least
three recognized dealers in U.S. Government securities selected by the
Corporation.
Except as described in this subsection (c) of this Section 3, the "Ten Year
Constant Maturity Rate" for each dividend period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (as
hereinafter defined) (or the one weekly per annum Ten Year Average Yield, if
only one such yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the Calendar Period
immediately preceding the last 10 calendar days preceding the dividend period
for which the dividend rate on the Series F Preferred Stock is being
determined. In the event that the Federal Reserve Board does not publish such a
weekly per annum Ten Year Average Yield during such Calendar Period, then the
Ten Year Constant Maturity Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum Ten Year Average
Yields (or the one weekly per annum Ten Year Average Yield, if only one such
yield is published during the relevant Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the event that
a per annum Ten Year Average Yield is not published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Ten Year Constant Maturity Rate
for such dividend period shall be the arithmetic average of the two most recent
weekly per annum average yields to maturity (or the one weekly per annum
average yield to maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities (as
hereinafter defined)) then having remaining maturities of not less than eight
nor more than 12 years, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such yields, by
any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that the Corporation determines in
good faith that for any reason the Corporation cannot determine the Ten Year
Constant Maturity Rate for any dividend period as provided above in this
paragraph, then the Ten Year Constant Maturity Rate for such dividend period
shall be the arithmetic average of the per annum average yields to maturity
based upon the closing bids during such Calendar Period for each of the issues
of actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) with a final maturity date not less than eight
nor more than 12 years from the date of each such quotation, as chosen and
quoted daily for each business day in New York City (or less frequently if
daily quotations are not generally available) to the Corporation by at least
three recognized dealers in U.S. Government securities selected by the
Corporation.
Except as described in this subsection (c) of this Section 3, the "Thirty Year
Constant Maturity Rate"
3
<PAGE> 4
for each dividend period shall be the arithmetic average of the two most recent
weekly per annum Thirty Year Average Yields (as hereinafter defined) (or the
one weekly per annum Thirty Year Average Yield, if only one such yield is
published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately preceding the last
10 calendar days preceding the dividend period for which the dividend rate on
the Series F Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Thirty Year Average
Yield during such Calendar Period, then the Thirty Year Constant Maturity Rate
for such dividend period shall be the arithmetic average of the two most recent
weekly per annum Thirty Year Average Yields (or the one weekly per annum Thirty
Year Average Yield, if only one such yield is published during the relevant
Calendar Period), as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency selected by
the Corporation. In the event that a per annum Thirty Year Average Yield is not
published by the Federal Reserve Board or by any Federal Reserve Bank or by any
U.S. Government department or agency during such Calendar Period, then the
Thirty Year Constant Maturity Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum average yields to
maturity (or the one weekly per annum average yield to maturity, if only one
such yield is published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) then having remaining maturities of not less than 28
nor more than 30 years, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such yields, by
any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that the Corporation determines in
good faith that for any reason the Corporation cannot determine the Thirty Year
Constant Maturity Rate for any dividend period as provided above in this
paragraph, then the Thirty Year Constant Maturity Rate for such dividend period
shall be the arithmetic average of the per annum average yields to maturity
based upon the closing bids during such Calendar Period for each of the issues
of actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) with a final maturity date not less than 28 nor
more than 30 years from the date of each such quotation, as chosen and quoted
daily for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty Year
Constant Maturity Rate shall each be rounded to the nearest five hundredths of
a percent, with .025% being rounded upward.
The Applicable Rate with respect to each dividend period beginning on or after
September 30, 2001 shall be calculated as promptly as practicable by the
Corporation according to the appropriate method described in this subsection
(c) of this Section 3. The Corporation shall cause notice of each Applicable
Rate to be enclosed with the dividend payment checks next mailed to the holders
of Series F Preferred Stock.
For the purposes of this subsection (c) of this Section 3, the following terms
shall have the following meanings : (i) "Calendar Period" means a period of 14
calendar days; (ii) "Federal Reserve Board"
4
<PAGE> 5
means the Board of Governors of the Federal Reserve System or any successor
agency; (iii) "Special Securities" means securities which can, at the option of
the holder, be surrendered at face value in payment of any Federal estate tax
or which provide tax benefits to the holder and are priced to reflect such tax
benefits or which were originally issued at a deep or substantial discount;
(iv) the term "Ten Year Average Yield" means the average yield to maturity for
actively traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of 10 years); and (v) "Thirty Year Average
Yield" means the average yield to maturity for actively traded marketable U.S.
Treasury fixed interest rate securities (adjusted to constant maturities of 30
years).
(d) If one or more amendments to the Internal Revenue Code of 1986, as amended
(the "Code"), are enacted that change the percentage of the dividends received
deduction (70% as of October 4, 1996) as specified in Section 243(a)(1) of the
Code or any successor provision (the "Dividends Received Percentage"), as
applicable to the Series F Preferred Stock, the amount of each dividend payable
per share of the Series F Preferred Stock for dividend payments made on or
after the later of the date of enactment or the effective date of such change
shall be adjusted by multiplying the amount of the dividend payable determined
as described under subsection (a) of this Section 3 (before adjustment) by a
factor, which shall be the number determined in accordance with the following
formula (the "DRD Formula"), and rounding the result to the nearest cent:
1 - [.35 (1 - .70)]
- --------------------
1 - [.35 (1 - DRP)]
For purposes of the DRD Formula, "DRP" means the Dividends Received Percentage
applicable to the dividend in question. No amendment to the Code, other than a
change in the percentage of the dividends received deduction set forth in
Section 243(a)(1) of the Code or any successor provision, as applicable to the
Series F Preferred Stock, shall give rise to an adjustment. Notwithstanding the
foregoing provisions of this subsection (d) of this Section 3, in the event
that, with respect to any such amendment, the Corporation shall receive an
unqualified opinion of nationally recognized independent tax counsel selected
by the Corporation and approved by Cravath, Swaine & Moore (which approval
shall not be unreasonably withheld) or a private letter ruling or similar form
of authorization from the Internal Revenue Service to the effect that such an
amendment would not apply to dividends payable on the Series F Preferred Stock,
then any such amendment shall not result in the adjustment provided for
pursuant to the DRD Formula. The opinion referenced in the previous sentence
shall be based upon a specific provision in the legislation or upon a published
pronouncement of the Internal Revenue Service addressing such legislation. The
Corporation's calculation of the dividends payable as so adjusted and as
certified accurate as to calculation and reasonable as to method by the
independent certified public accountants then regularly engaged by the
Corporation, shall be final and not subject to review.
If any amendment to the Code which reduces the Dividends Received Percentage,
as applicable to the Series F Preferred Stock, is enacted and becomes effective
after a dividend payable on a Dividend Payment Date has been declared, the
amount of dividend payable on such Dividend Payment Date shall not be
increased; but instead, an amount, equal to the excess of (x) the product
5
<PAGE> 6
of the dividends paid by the Corporation on such Dividend Payment Date and the
DRD Formula (where the DRP used in the DRD Formula would be equal to the
reduced Dividends Received Percentage) and (y) the dividends paid by the
Corporation on such Dividend Payment Date, shall be payable to holders of
record on the next succeeding Dividend Payment Date in addition to any other
amounts payable on such date.
If prior to April 1, 1997, an amendment to the Code is enacted that reduces the
Dividends Received Percentage, as applicable to the Series F Preferred Stock,
and such reduction retroactively applies to a Dividend Payment Date as to which
the Corporation previously paid dividends on the Series F Preferred Stock (each
an "Affected Dividend Payment Date"), the Corporation shall pay (if declared)
additional dividends (the "Additional Dividends") on the next succeeding
Dividend Payment Date (or if such amendment is enacted after the dividend
payable on such Dividend Payment Date has been declared, on the second
succeeding Dividend Payment Date following the date of enactment) to holders of
record on such succeeding Dividend Payment Date in an amount equal to the
excess of (x) the product of the dividends paid by the Corporation on each
Affected Dividend Payment Date and the DRD Formula (where the DRP used in the
DRD Formula would be equal to the Dividends Received Percentage applicable to
each Affected Dividend Payment Date) over (y) the dividends paid by the
Corporation on each Affected Dividend Payment Date.
Additional Dividends shall not be paid in respect of the enactment of any
amendment to the Code on or after April 1, 1997 which retroactively reduces the
Dividends Received Percentage, or if prior to April 1, 1997, such amendment
would not result in an adjustment due to the Corporation having received either
an opinion of counsel or tax ruling referred to in the third preceding
paragraph. The Corporation shall only make one payment of Additional Dividends.
In the event that the amount of dividend payable per share of the Series F
Preferred Stock shall be adjusted pursuant to the DRD Formula and/or Additional
Dividends are to be paid, the Corporation will cause notice of each such
adjustment and, if applicable, any Additional Dividends, to be sent to the
holders of the Series F Preferred Stock.
In the event that the Dividends Received Percentage, applicable to the Series F
Preferred Stock, is reduced to 40% or less, the Corporation may at its option,
redeem the Series F Preferred Stock as a whole, but not in part, as described
in Section 5 below.
4. Liquidation. The amount payable upon shares of Series F Preferred Stock in
the event of voluntary or involuntary liquidation of the Corporation, prior to
any payment to the holders of Common Stock or of any class or series of stock
of the Corporation ranking as to assets subordinated to the Series F Preferred
Stock, shall be $50.00 per share plus an amount equal to accrued and unpaid
dividends, whether or not earned or declared, computed thereon from the
immediately preceding Dividend Payment Date (but without cumulation for unpaid
dividends for prior dividend periods on the Series F Preferred Stock) to the
date on which payment thereof is made available.
5. Redemption. (a) Prior to September 30, 2001, shares of Series F Preferred
Stock shall not be redeemable, except under the circumstances described in
subsection (b) of this Section 5. Shares of
6
<PAGE> 7
Series F Preferred Stock shall be redeemable by the Corporation, in whole or in
part, at any time and from time to time on and after September 30, 2001 at
$50.00 per share plus an amount equal to accrued and unpaid dividends, whether
or not earned or declared, computed thereon from the immediately preceding
Dividend Payment Date (but without cumulation for unpaid dividends for prior
dividend periods on the Series F Preferred Stock) to the date fixed for
redemption, including any changes in dividends payable due to changes in the
Dividends Received Percentage and Additional Dividends, if any (each as defined
in subsection (d) of Section 3).
(b) Notwithstanding anything to the contrary in subsection (a) of this Section
5, if the Dividends Received Percentage is equal to or less than 40% and, as a
result, the amount of dividends on the Series F Preferred Stock on any Dividend
Payment Date will be or is adjusted upwards as described in subsection (d) of
Section 3 above, the Corporation, at its option, may redeem all, but not less
than all, of the outstanding shares of Series F Preferred Stock; provided,
however, that within 60 days of the date on which an amendment to the Code is
enacted which reduces the Dividends Received Percentage to 40 percent or less,
the Corporation sends notice to the holders of the Series F Preferred Stock of
such redemption. Any redemption of Series F Preferred Stock in accordance with
this Section 5(b) shall take place on the date specified in the notice, which
shall not be less than 30 days nor more than 60 days from the date such notice
is sent to holders of Series F Preferred Stock. Any redemption of Series F
Preferred Stock in accordance with this Section 5(b) shall be on notice as
aforesaid at the applicable redemption price set forth in the following table,
in each case plus accrued and unpaid dividends computed thereon from the
immediately preceding Dividend Payment Date (but without any cumulation for
unpaid dividends for prior dividend periods on Series F Preferred Stock) to the
date fixed for redemption, including any changes in dividends payable due to
changes in the Dividends Received Percentage and Additional Dividends, if any,
whether or not earned or declared.
REDEMPTION PERIOD REDEMPTION PRICE PER SHARE
- ----------------- --------------------------
October 9, 1996 through September 29, 1997 $52.50
September 30, 1997 through September 29, 1998 52.00
September 30, 1998 through September 29, 1999 51.50
September 30, 1999 through September 29, 2000 51.00
September 30, 2000 through September 29, 2001 50.50
On or after September 30, 2001 50.00
(c) Holders of Series F Preferred Stock shall have no right to require the
redemption of shares of Series F Preferred Stock.
7
<PAGE> 8
6. Voting rights. Holders of shares of Series F Preferred Stock shall have no
voting rights except as set forth in Section 4 and Section 5 of ARTICLE SEVENTH
of the Corporation's Articles of Incorporation or as otherwise required from
time to time by law.
7. Conversion Rights. Shares of Series F Preferred Stock shall not be
convertible into shares of Common Stock or any other security of the
Corporation.
8
