<PAGE> 1
Filed pursuant to Rule 424(b)(5)
Registration No. 333-34709
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 9, 1997) PNC BANK LOGO
PNC FUNDING CORP
$300,000,000 6.95% NOTES DUE 2002
$300,000,000 7.00% NOTES DUE 2004
UNCONDITIONALLY GUARANTEED BY
PNC BANK CORP.
------------------
The Notes will be issued in two series--$300,000,000 aggregate principal
amount will mature on September 1, 2002 and $300,000,000 aggregate principal
amount will mature on September 1, 2004. Interest on the Notes is payable
semiannually on March 1 and September 1 beginning March 1, 2000. The Notes are
unconditionally guaranteed by PNC Bank Corp. and rank equally with all of PNC
Funding Corp's other unsecured senior indebtedness. The Notes may not be
redeemed prior to maturity and will not be subject to any sinking fund.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
Prospectus Supplement or the related Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
------------------
<TABLE>
<CAPTION>
PER NOTE PER NOTE
DUE 2002 DUE 2004 TOTAL
--------- --------- ------------
<S> <C> <C> <C>
Public Offering Price 99.968% 99.569% $598,611,000
Underwriting Discount .400% .600% $ 3,000,000
Proceeds to PNC Funding Corp 99.568% 98.969% $595,611,000
</TABLE>
Interest on the Notes will accrue from September 1, 1999 to the date of
delivery.
------------------
The Underwriters are offering the Notes subject to various conditions. The
Underwriters expect to deliver the Notes to purchasers on or about September 1,
1999.
------------------
SALOMON SMITH BARNEY
PNC CAPITAL MARKETS, INC.
August 27, 1999
<PAGE> 2
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING
AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS IS ACCURATE AS OF ANY
DATE OTHER THAN THE DATE ON THE FRONT PAGE OF THIS PROSPECTUS SUPPLEMENT OR,
WITH RESPECT TO INFORMATION INCORPORATED BY REFERENCE, AS OF THE DATE OF SUCH
INFORMATION.
THIS PROSPECTUS SUPPLEMENT AND THE RELATED PROSPECTUS MAY BE USED BY PNC
CAPITAL MARKETS, INC., AN AFFILIATE OF PNC BANK CORP. AND PNC FUNDING CORP, IN
CONNECTION WITH OFFERS AND SALES RELATED TO SECONDARY MARKET TRANSACTIONS IN THE
NOTES. PNC CAPITAL MARKETS, INC. MAY ACT AS PRINCIPAL OR AGENT IN SUCH
TRANSACTIONS. SUCH SALES WILL BE MADE AT PRICES RELATED TO PREVAILING MARKET
PRICES AT THE TIME OF SALE OR OTHERWISE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Certain Updating Information................................ S-3
PNC Bank Corp. ............................................. S-3
Use of Proceeds............................................. S-3
Summary Consolidated Financial Data......................... S-4
Certain Terms of the Notes.................................. S-5
Underwriting................................................ S-6
Legal Opinions.............................................. S-7
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
PNC Bank Corp. ............................................. 3
PNC Funding Corp............................................ 3
Supervision, Regulation and Other Matters................... 3
Consolidated Ratio of Earnings to Fixed Charges............. 6
Consolidated Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends................................. 6
Use of Proceeds............................................. 7
Description of Debt Securities and Guarantees............... 7
Description of Common Stock................................. 18
Description of Preferred Stock.............................. 19
Description of Depositary Shares............................ 24
Plan of Distribution........................................ 27
Legal Opinions.............................................. 28
Experts..................................................... 28
</TABLE>
S-2
<PAGE> 3
CERTAIN UPDATING INFORMATION
Written requests for copies of documents incorporated herein by reference
should be directed to Lynn F. Evans, Financial Reporting, PNC Bank Corp., One
PNC Plaza, 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222-2707 or on the
Internet to [email protected]. The information under
"Incorporation of Certain Documents by Reference" in the accompanying Prospectus
should be read accordingly. Certain information contained in this Prospectus
Supplement updates and supersedes certain information contained in the
accompanying Prospectus.
PNC BANK CORP.
PNC Bank Corp. ("PNC" or the "Corporation") is a bank holding company
organized under Pennsylvania law. PNC was incorporated in 1983 with the
consolidation of Pittsburgh National Corporation and Provident National
Corporation. Since 1983, the Corporation has diversified its geographic presence
and product capabilities through strategic bank and nonbank acquisitions and the
formation of various nonbanking subsidiaries.
PNC is one of the largest diversified financial services companies in the
United States and operates seven major businesses engaged in retail banking,
asset management and wholesale banking activities: PNC Regional Bank, PNC
Advisors, BlackRock, PFPC Worldwide, PNC Institutional Bank, PNC Secured Finance
and PNC Mortgage.
Financial products and services are tailored to specific customer segments
and are offered nationally and in the Corporation's primary geographic markets
in Pennsylvania, New Jersey, Delaware, Ohio, and Kentucky. At June 30, 1999, the
Corporation's consolidated assets, deposits, and shareholders' equity were $75.6
billion, $47.7 billion, and $5.8 billion, respectively.
The corporate structure currently consists of four subsidiary banking and
savings institutions and over 100 active nonbank subsidiaries. PNC Bank,
National Association, headquartered in Pittsburgh, Pennsylvania ("PNC Bank"), is
the Corporation's principal bank subsidiary. At June 30, 1999, PNC Bank had
total consolidated assets of $69.0 billion, representing approximately 91% of
the Corporation's consolidated assets.
PNC's principal executive offices are located at One PNC Plaza, 249 Fifth
Avenue, Pittsburgh, Pennsylvania 15222-2702 and its telephone number is (412)
762-1553.
USE OF PROCEEDS
The net proceeds from the sale of the Notes are expected to be used to fund
a portion of the purchase price to be paid by PNC for First Data Investor
Services Group, Inc. ("ISG"), the mutual fund servicing subsidiary of First Data
Corporation. As described in PNC's Current Report on Form 8-K filed on July 21,
1999, PNC has agreed to acquire ISG for $1.1 billion in cash. The transaction is
expected to close in the fourth quarter of 1999, subject to regulatory approvals
and satisfaction of customary closing conditions.
Pending ultimate application for the ISG acquisition or other corporate
purposes as described in the accompanying Prospectus, the net proceeds may be
used to make short-term investments or to reduce borrowed funds. In view of
anticipated funding requirements for the ISG acquisition and other aspects of
PNC's business, PNC Funding or PNC may from time to time engage in additional
financings of a character and in amounts to be determined.
S-3
<PAGE> 4
SUMMARY CONSOLIDATED FINANCIAL DATA
The following unaudited table sets forth certain consolidated financial
data for PNC and its subsidiaries and is qualified in its entirety by the
detailed information and financial statements included in the documents
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference" in the accompanying Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------- -----------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS (in millions)
Interest income....................... $ 2,494 $ 2,605 $ 5,313 $ 5,051 $ 4,938 $ 5,149 $ 4,724
Interest expense...................... 1,229 1,337 2,740 2,556 2,494 3,007 2,232
Net interest income................... 1,265 1,268 2,573 2,495 2,444 2,142 2,492
Provision for credit losses........... 103 65 225 70 6 84
Noninterest income excluding net
securities gains (losses)(a)........ 1,353 1,062 2,286 1,735 1,353 1,198 1,155
Net securities gains (losses)(a)...... 42 13 16 40 22 (280) (142)
Noninterest expense(a)................ 1,590 1,447 2,940 2,582 2,292 2,427 2,212
Applicable income taxes............... 327 282 595 566 535 219 318
Income before cumulative effect of
changes in accounting principles.... 640 549 1,115 1,052 992 408 891
Cumulative effect of changes in
accounting principles, net of tax
benefits............................ (7)
Net income............................ $ 640 $ 549 $ 1,115 $ 1,052 $ 992 $ 408 $ 884
PERIOD-END BALANCE SHEET DATA (in
millions)
Total assets.......................... $75,558 $75,873 $77,207 $75,120 $73,260 $73,404 $77,461
Loans, net of unearned income......... 52,075 56,237 57,650 54,245 51,798 48,653 44,043
Allowance for credit losses........... 673 859 753 972 1,166 1,259 1,352
Shareholders' equity.................. 5,755 5,633 6,043 5,384 5,869 5,768 5,727
AVERAGE BALANCE SHEET DATA (in millions)
Total assets.......................... $76,003 $72,891 $74,626 $70,644 $70,807 $75,131 $74,362
Earning assets........................ 67,853 65,943 67,439 64,017 64,725 69,535 69,427
Loans, net of unearned income......... 54,576 54,719 55,693 52,907 49,116 45,624 42,599
Securities available for sale......... 8,601 7,552 7,374 8,774 13,550 22,140 24,355
Deposits.............................. 45,940 44,399 44,896 44,534 45,117 44,830 43,937
Borrowed funds........................ 21,061 20,922 21,809 18,594 18,314 23,176 23,622
Shareholders' equity.................. 5,923 5,437 5,581 5,478 5,828 5,784 5,531
SELECTED RATIOS
Return on average common shareholders'
equity.............................. 22.66% 21.26% 20.81% 20.01% 17.18% 7.05% 16.09%
Return on average assets.............. 1.70 1.52 1.49 1.49 1.40 .54 1.19
Average common shareholders' equity to
average total assets................ 7.38 7.03 7.06 7.31 8.11 7.64 7.34
Net interest margin................... 3.75 3.88 3.85 3.94 3.83 3.15 3.64
CREDIT QUALITY RATIOS
Nonperforming loans to period-end
loans............................... .58 .48 .51 .51 .67 .74 1.28
Nonperforming assets to period-end
loans, loans held for sale and
foreclosed
assets.............................. .59 .55 .55 .59 .87 1.08 1.72
As a percent of average loans
Net charge-offs..................... .38 .66 .80 .51 .33 .29 .40
Provision for credit losses......... .38 .24 .40 .13 .01 .20
Allowance for credit losses......... 1.23 1.57 1.35 1.84 2.37 2.76 3.17
Allowance as a percent of period-end
Loans............................... 1.29 1.53 1.31 1.79 2.25 2.59 3.07
Nonperforming loans................. 224.33 315.81 255.25 351.79 334.40 351.68 239.29
RATIO OF EARNINGS TO FIXED CHARGES(b)
Excluding interest on deposits........ 2.61x 2.26x 2.25x 2.38x 2.39x 1.42x 2.10x
Including interest on deposits........ 1.75 1.60 1.60 1.62 1.60 1.21 1.53
</TABLE>
- ---------------
(a) Amortization of mortgage servicing rights and related net securities gains
resulting from residential mortgage banking risk management strategies are
included in noninterest income, which is a change in presentation from the
1998 Annual Report.
(b) The consolidated ratio of earnings to fixed charges has been computed by
dividing income before income taxes, cumulative effect of changes in
accounting principles, and fixed charges by fixed charges. Fixed charges
represent all interest expense (ratios are presented both excluding and
including interest on deposits), borrowed funds discount amortization
expense, and the portion of net rental expense which is deemed to be
equivalent to interest on debt. Interest expense (other than on deposits)
includes interest on bank notes and senior debt, federal funds purchased,
repurchase agreements, other funds borrowed, and subordinated debt.
S-4
<PAGE> 5
CERTAIN TERMS OF THE NOTES
The 6.95% Notes Due 2002 (the "2002 Notes") and the 7.00% Notes Due 2004
(the "2004 Notes" and, together with the 2002 Notes, the "Notes") will be issued
by PNC Funding Corp, a wholly-owned indirect subsidiary of the Corporation ("PNC
Funding"). Each series of Notes will constitute a series of Senior Debt
Securities, as such term is defined in the accompanying Prospectus. The
following description of the particular terms of the Notes supplements, and to
the extent inconsistent therewith replaces, the description of the general terms
and provisions of the Senior Debt Securities in the accompanying Prospectus, to
which description reference is hereby made. The accompanying Prospectus sets
forth the meaning of certain capitalized terms used herein and not otherwise
defined.
GENERAL
The 2002 Notes and the 2004 Notes each will be limited to $300,000,000
aggregate principal amount and will be issued under an Indenture dated as of
December 1, 1991, among PNC, PNC Funding and The Chase Manhattan Bank, as
Trustee, as amended by a Supplemental Indenture dated as of February 15, 1993
(as amended, the "Indenture"), which is more fully described in the accompanying
Prospectus. The Notes are unconditionally guaranteed as to payment of principal
and interest by PNC.
The 2002 Notes and the 2004 Notes, respectively, will bear interest at a
rate of 6.95% and 7.00% per annum from September 1, 1999, which will be payable
semiannually in arrears on March 1 and September 1 of each year, commencing
March 1, 2000. Interest will be payable to the persons in whose names the Notes
are registered at the close of business on February 15 or August 15, as the case
may be, next preceding such interest payment dates. Interest will be computed on
the basis of a 360-day year consisting of twelve 30-day months. The interest
period relating to an interest payment date shall be the period from but not
including the preceding interest payment date to and including the relevant
interest payment date.
The 2002 Notes and the 2004 Notes, respectively, will mature on September
1, 2002 and September 1, 2004. The Notes may not be redeemed prior to their
stated maturity. The Notes will not be subject to any sinking fund.
The Notes and PNC's guarantee thereof are not savings or deposit accounts
or other obligations of any bank. They are not insured by the Federal Deposit
Insurance Corporation or any other insurer or governmental agency.
DELIVERY AND FORM
The Notes of each series initially will be represented by a Global Security
deposited with DTC and registered in the name of Cede & Co. (DTC's partnership
nominee). DTC currently limits the maximum denomination of any global security
to $200,000,000. Therefore, for purposes of this Prospectus Supplement, "Global
Security" refers to the Global Securities representing the entire issue of each
series of Notes offered hereby. The Notes will be available for purchase in
denominations of $1,000 (representing 1/300,000 of the Global Security for each
series) and integral multiples thereof in book-entry form only. Unless and until
certificated Notes are issued under the limited circumstances described in the
accompanying Prospectus, no beneficial owner of a Note shall be entitled to
receive a definitive certificate representing a Note. So long as DTC or any
successor depositary (collectively, the "Depositary") or its nominee is the
registered owner of the Global Security, the Depositary, or such nominee, as the
case may be, will be considered to be the sole owner or holder of the Notes for
all purposes of the Indenture.
Principal of and interest on the Notes is payable at the office of the
corporate trust department of the Trustee, PNC Funding's Paying Agent in The
City of New York, presently located at 450
S-5
<PAGE> 6
West 33rd Street, New York, New York 10001. Payment of interest, other than at
maturity, may be made at the option of PNC Funding by check mailed to the
address of the registered holder entitled thereto. So long as the Global
Security represents the Notes, such payments of interest and principal will be
made to the Depositary or its nominee. Payments to beneficial owners of the
Notes will be made through the Depositary or its nominee, as described in the
accompanying Prospectus. None of PNC Funding, the Trustee, any Paying Agent, or
the Registrar for the Notes will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Security for such Notes or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by PNC
Funding in immediately available funds. The Notes will trade in DTC's Same Day
Funds Settlement System until maturity, and secondary market trading activity in
the Notes will therefore be required by DTC to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated August 27, 1999, PNC Funding has agreed to sell to Salomon Smith Barney
Inc. and PNC Capital Markets, Inc. (collectively, the "Underwriters"), and the
Underwriters have agreed to purchase, the respective principal amount of Notes
set forth after their names below at the price to the public less the
underwriting discount set forth on the cover page of this Prospectus Supplement.
<TABLE>
<CAPTION>
2002 NOTES 2004 NOTES
UNDERWRITER PRINCIPAL AMOUNT PRINCIPAL AMOUNT
- ----------- ---------------- ----------------
<S> <C> <C>
Salomon Smith Barney Inc............. $270,000,000 $270,000,000
PNC Capital Markets, Inc............. $ 30,000,000 $ 30,000,000
------------ ------------
Total........................... $300,000,000 $300,000,000
============ ============
</TABLE>
The following table shows the underwriting discounts and commissions to be
paid to the Underwriters by PNC Funding in connection with this offering.
<TABLE>
<CAPTION>
PER PER
2002 NOTE 2004 NOTE TOTAL
--------- --------- -----
<S> <C> <C> <C>
Underwriting Discount............ .400% .600% $3,000,000
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the Notes if any Notes
are purchased. PNC Funding has been advised by the Underwriters that the
Underwriters propose initially to offer the Notes to the public at the public
offering price set forth on the cover page of this Prospectus Supplement and to
certain dealers at such price less a concession not in excess of $2.00 per
$1,000 principal amount of the 2002 Notes and $3.00 per $1,000 principal amount
of the 2004 Notes. The Underwriters may allow and such dealers may reallow a
concession not in excess of $1.00 per $1,000 principal amount of the 2002 Notes
and $1.50 per $1,000 principal amount of the 2004 Notes. After the initial
public offering, the public offering price and such concessions may be changed.
The Underwriters have agreed to provide PNC Funding a non-accountable expense
allowance of approximately $500,000. PNC Funding expects that the expense
allowance will be more than sufficient to cover its expenses.
S-6
<PAGE> 7
The Underwriting Agreement provides that PNC Funding and PNC will jointly
and severally indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or contribute to any
payments the Underwriters may be required to make in respect thereof.
In connection with this offering and in compliance with applicable law, the
Underwriters may overallot (i.e., sell more than the principal amount of Notes
shown in the first paragraph above) and may effect transactions which stabilize,
maintain or otherwise affect the market price of the Notes at levels above those
which might otherwise prevail in the open market. Such transactions may include
placing bids for the Notes or effecting purchases of the Notes for the purpose
of pegging, fixing or maintaining the price of the Notes or for the purpose of
reducing a short position created in connection with the offering. In addition,
if the Underwriters purchase Notes in the open market and the securities
purchased can be traced to a particular member of the selling group, the
Underwriters may require the selling group member in question to purchase the
Notes in question at the cost price to the Underwriters or may recover from (or
decline to pay to) the selling group member in question the selling concession
applicable to the securities in question. The Underwriters are not required to
engage in any of these activities and any such activities, if commenced, may be
discontinued at any time.
The Underwriters and their respective associates and affiliates may be
customers of, engage in transactions with, and perform investment banking and
other financial services (including commercial lending) for, PNC and its
subsidiaries in the ordinary course of business. PNC Capital Markets, Inc., one
of the Underwriters, is an indirect wholly-owned subsidiary of PNC. Under
Conduct Rule 2720 ("CR 2720") of the National Association of Securities Dealers,
Inc. (the "NASD"), when an NASD member, such as PNC Capital Markets, Inc.,
participates in the distribution of an affiliated company's securities, the
offering must be conducted in accordance with applicable provisions of CR 2720.
PNC and PNC Funding are considered to be "affiliates" (as such term is defined
in CR 2720) of PNC Capital Markets, Inc. The offer and sale of the Notes by PNC
Capital Markets, Inc. will comply with the applicable requirements of CR 2720
regarding the underwriting of securities of affiliates.
This Prospectus Supplement and the related Prospectus may be used by PNC
Capital Markets, Inc., an affiliate of PNC and PNC Funding, in connection with
offers and sales related to secondary market transactions in the Notes. PNC
Capital Markets, Inc. may act as principal or agent in such transactions. Such
sales will be made at prices related to prevailing market prices at the time of
sale or otherwise.
The Notes are new securities with no established trading market and there
can be no assurance as to the liquidity of any markets that may develop for the
Notes, the ability of the holders of the Notes to sell their Notes or at what
price holders of the Notes will be able to sell their Notes. Future trading
prices of the Notes will depend on many factors, including, among other things,
prevailing interest rates, PNC's operating results, and the market for similar
securities. PNC Funding has been advised by Salomon Smith Barney Inc. that it
initially intends to make a market in the Notes, but Salomon Smith Barney Inc.
is not obligated to do so and may discontinue any market making at any time
without notice.
LEGAL OPINIONS
The validity of the Notes and related Guarantees will be passed upon for
PNC Funding and PNC by Victor M. DiBattista, Chief Regional Counsel of PNC.
The validity of the Notes and related Guarantees will be passed upon for
the Underwriters by Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New
York 10019.
S-7
<PAGE> 8
PROSPECTUS
PNC FUNDING CORP
DEBT SECURITIES
PNC BANK LOGO
PNC BANK CORP.
UNCONDITIONAL GUARANTEE OF PNC FUNDING CORP DEBT SECURITIES
AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
COMMON STOCK ($5.00 PAR VALUE)
PREFERRED STOCK ($1.00 PAR VALUE)
PNC Funding Corp ("PNC Funding") from time to time may offer its unsecured
debt securities consisting of debentures, notes and/or other unsecured evidences
of indebtedness (the "Debt Securities") and PNC Bank Corp. ("PNC" or the
"Corporation") from time to time may offer shares of its common stock, $5.00 par
value per share ("Common Stock"), either originally issued or treasury shares,
and shares of its preferred stock, $1.00 par value per share ("Preferred
Stock"), up to an amount resulting in combined net proceeds to PNC Funding and
PNC of $1,300,000,000. The Debt Securities may be either senior (the "Senior
Debt Securities") or subordinated in priority of payment (the "Subordinated Debt
Securities"). All such Senior Debt Securities and Subordinated Debt Securities
will be unconditionally guaranteed on a senior or subordinated basis,
respectively, as to payment of principal, premium, if any, and interest (the
"Guarantees") by PNC. The Debt Securities, the Common Stock and the Preferred
Stock (collectively, the "Securities") may be offered separately or together, in
separate series in amounts, at prices and on terms to be set forth in
supplements to this Prospectus (a "Prospectus Supplement"), which will be
delivered together with this Prospectus at the time of the particular Securities
offering.
The Debt Securities, the Common Stock and the Preferred Stock may be offered
and sold to or through underwriters or dealers, directly to other purchasers or
through agents. Underwritten offerings of the Securities may involve
underwriting syndicates represented by managing underwriters, or underwriters
without a syndicate. See "Plan of Distribution." The names of, and the principal
amounts to be purchased by, underwriters or agents, if any, and the compensation
of such underwriters or agents, including applicable commissions and discounts,
will be set forth in the Prospectus Supplement. The aggregate net proceeds to
PNC Funding and PNC from the sale of the Debt Securities, the Common Stock and
the Preferred Stock will be the public offering or purchase price of the
Securities sold less the aggregate of any applicable commissions, discounts and
other expenses of issuance and distribution.
The applicable Prospectus Supplement for offered Debt Securities, among
other things and where applicable, will include the specific designation,
priority, aggregate principal amount, denominations, maturity, premium, interest
rate (which may be fixed or variable) and time of payment of interest,
redemption terms, terms for sinking fund payments, the initial public offering
price, terms relating to temporary or global securities, provisions regarding
repayment, provisions regarding convertibility, special provisions and
restrictions relating to Debt Securities, the principal, premium and interest of
which is denominated and payable in a foreign currency or currency unit,
provisions regarding original issue discount securities, and other terms of the
offer and sale of such Debt Securities.
The applicable Prospectus Supplement for offered Common Stock, among other
things, will include the number of shares and other terms of the offer and sale
of such Common Stock.
The applicable Prospectus Supplement for offered Preferred Stock, among
other things and where applicable, will include the specific designation, number
of shares, whether fractional interests will be offered through depositary
arrangements, dividend rate or method of calculation, dividend periods, dividend
payment dates, whether dividends are cumulative or noncumulative, liquidation
preference, any redemption, sinking fund, or conversion or exchange provisions,
voting or other rights, and other terms of the offer and sale of such Preferred
Stock.
The applicable Prospectus Supplement will also contain information, where
applicable, concerning United States federal income tax considerations relating
to, and as to any listing on a securities exchange of, the Securities covered by
such Prospectus Supplement.
------------------------
THESE SECURITIES AND THE GUARANTEES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER
OBLIGATIONS OF ANY BANK. THEY ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER INSURER OR GOVERNMENTAL AGENCY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER 9, 1997.
<PAGE> 9
AVAILABLE INFORMATION
PNC is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Information, as of particular dates, concerning directors and
executive officers, their compensation, options granted to them, the principal
holders of securities of PNC and any material interest of such persons in
transactions with PNC is disclosed in proxy statements distributed to
shareholders of PNC and filed with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Room of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20459, and the Commission's Regional Offices at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New
York, New York 10048. Copies of such materials can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20459 at prescribed rates. In addition, such material may be accessed
electronically at the Commission's site on the World Wide Web located at
http://www.sec.gov. Such reports, proxy statements and other materials
concerning PNC may also be inspected at the office of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which exchange PNC's
Common Stock and certain series of Preferred Stock are listed.
PNC Funding and PNC have filed with the Commission a Registration Statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities being offered by this Prospectus. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For additional information about PNC Funding, PNC
and the Securities, reference is made to the Registration Statement, including
the exhibits thereto. The Registration Statement may be inspected by anyone
without charge at the principal office of the Commission in Washington, D.C. and
copies of all or any part of it may be obtained from the Commission upon payment
of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by PNC with the Commission are incorporated
herein by reference:
(1) PNC's Annual Report on Form 10-K for the year ended December 31,
1996, as amended by Form 10-K/A (Amendment No. 1) filed on June 30, 1997;
(2) Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1997 and June 30, 1997;
(3) Current Reports on Form 8-K dated as of April 15, 1997, July 9,
1997 and July 16, 1997; and
(4) Description of PNC's Common Stock and certain series of Preferred
Stock contained in the Form 8-A filed on September 24, 1987.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated by
reference or deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
PNC will provide without charge to each person to whom this Prospectus is
delivered, on the written or oral request of such person, a copy of any or all
documents incorporated herein by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents). Written requests should be directed to: Glenn Davies, Vice
President Financial Reporting, PNC Bank Corp., One PNC Plaza, 249 Fifth Avenue,
Pittsburgh, Pennsylvania 15222 or "[email protected]" on
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<PAGE> 10
the Internet. Telephone requests may be directed to (412)762-1553. PNC's
Exchange Act filings are also electronically available to the public at its
World Wide Web site at http://www.pncbank.com.
PNC BANK CORP.
PNC is a bank holding company registered under the Bank Holding Company Act
of 1956, as amended (the "BHC Act"). PNC was incorporated under the laws of the
Commonwealth of Pennsylvania in 1983 with the consolidation of Pittsburgh
National Corporation and Provident National Corporation. Since 1983, PNC has
diversified its geographic presence and product capabilities through strategic
bank and nonbank acquisitions and the formation of various nonbank subsidiaries.
PNC is one of the largest diversified financial service companies in the
United States. The Corporation operates through five lines of business: Consumer
Banking, Corporate Banking, Real Estate Banking, Mortgage Banking and Asset
Management. Each line of business focuses on specific customer segments and
offers financial products and services in PNC's primary geographic markets in
Pennsylvania, New Jersey, Delaware, Ohio and Kentucky and nationally through
retail distribution networks and alternative delivery channels. At June 30,
1997, the Corporation's consolidated assets, loans (net of unearned income),
deposits, and shareholders' equity were $72.0 billion, $53.5 billion, $45.2
billion and $5.4 billion, respectively.
While the Corporation manages five lines of business, the corporate legal
structure consists of 10 subsidiary banks and over 110 active nonbank
subsidiaries. PNC Bank, National Association, headquartered in Pittsburgh,
Pennsylvania ("PNC Bank"), is the Corporation's principal bank subsidiary. At
June 30, 1997, PNC Bank had total assets of $57.5 billion, representing
approximately 80% of the Corporation's consolidated assets.
PNC's principal executive offices are located at One PNC Plaza, 249 Fifth
Avenue, Pittsburgh, Pennsylvania 15222, and its telephone number is
(412)762-1553.
PNC FUNDING CORP
PNC Funding is a wholly-owned indirect subsidiary of PNC. PNC Funding was
incorporated under the laws of the Commonwealth of Pennsylvania in 1972 and is
engaged in financing the activities of PNC and its subsidiaries through the
issuance of commercial paper and other debt guaranteed by PNC.
PNC Funding's principal executive offices are located at 1600 Market
Street, Philadelphia, Pennsylvania 19101, and its telephone number is
(215)585-5000.
SUPERVISION, REGULATION AND OTHER MATTERS
The Corporation and its subsidiaries are subject to extensive governmental
regulation. The coverage of the regulations range from activity, investment and
dividend limitations on the bank holding company and its subsidiaries to
consumer-related protections for loans, deposits, brokerage and mutual fund
customers. The following information is not intended to be an exhaustive
description of the statutes and regulations applicable to PNC. The discussion is
qualified in its entirety by reference to all particular statutory or regulatory
provisions. Additional information regarding supervision and regulation is
included in the incorporated documents. See "Incorporation of Certain Documents
by Reference."
As a bank holding company registered under the BHC Act, PNC's primary bank
regulatory authority is the Board of Governors of the Federal Reserve System
(the "Federal Reserve"). Under Federal Reserve policy, a bank holding company is
expected to act as a source of strength to each of its subsidiary banks and to
commit resources to support each such bank. As a result of that policy, PNC may
be required to commit resources to its subsidiary banks in circumstances where
it might not otherwise do so. Moreover, the actions and policy directives of the
Federal Reserve determine to a significant degree the cost and the availability
of funds obtained from money market sources for lending and investing. The
Federal Reserve's policies and regulations also influence, directly and
indirectly, the rates of interest paid by commercial banks on their time and
savings deposits. The nature and impact on PNC of future changes in monetary and
other policies of the
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<PAGE> 11
Federal Reserve are not predictable, as such changes also depend on economic
conditions and domestic and foreign governmental policies, among other factors.
PNC is a legal entity separate and distinct from PNC Funding, PNC Bank and
its other subsidiaries and affiliates. Such subsidiaries and affiliates are also
subject to supervision and examination by various federal and state regulatory
agencies, including the Office of the Comptroller of the Currency ("OCC") with
respect to PNC Bank. Because PNC is a holding company, its rights and the rights
of its creditors and shareholders, including the holders of the Securities, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that PNC may itself be a creditor with
recognized claims against the subsidiary.
PNC derives substantially all of its income from payment of dividends by
its bank and non-bank subsidiaries. There are various legal limitations on the
extent to which PNC's bank subsidiaries may extend credit, pay dividends or
otherwise supply funds to PNC. For example, the approval of the OCC is required
if total dividends by a national bank in any calendar year exceed retained net
income (as defined) for that year to date combined with its retained net income
for the preceding two years. In addition, dividends by such national bank may
not be paid in excess of the bank's undivided profits. State-chartered bank
subsidiaries are subject to dividend limitations imposed by applicable state
law. The approval of the Office of Thrift Supervision may be required if total
dividends declared by PNC's savings association subsidiary in any calendar year
exceed amounts specified in that agency's regulations. In determining whether
and to what extent to pay dividends, each bank subsidiary must also consider the
effect of dividend payments on applicable risk-based capital and leverage
requirements (as described below) as well as policy statements of the federal
regulatory agencies that indicate that banking organizations should generally
pay dividends out of current operating earnings. Contractual restrictions may
also limit the ability to pay dividends, such as those contained in
documentation relating to mandatorily redeemable capital securities in the event
of a default.
The U.S. federal bank regulatory authorities have each adopted risk-based
capital guidelines to which the Corporation and its insured depository
institutions subsidiaries are subject. These guidelines are based on an
international agreement developed by the Basle Committee on Banking Regulations
and Supervisory Practices, which consists of representatives of central banks
and supervisory authorities in 12 countries including the United States of
America. The guidelines establish a systematic analytical framework that makes
regulatory capital requirements more sensitive to differences in risk profiles
among banking organizations, takes off-balance sheet exposures into explicit
account in assessing capital adequacy and minimizes disincentives to holding
liquid, low-risk assets. Risk-based assets are determined by allocating assets
and specified off-balance sheet commitments and exposures into four weighted
categories, with higher levels of capital being required for the categories
perceived as representing greater risk. From time to time, the federal
regulatory agencies propose amendments to and issue interpretations of their
risk-based capital guidelines and reporting instructions, which can affect
reported capital ratios and net risk-adjusted assets.
Each of the Corporation's subsidiary banks is required to maintain a
minimum total risk-based ratio of 8%, of which half (4%) must be "Tier I"
capital. In addition, U.S. federal bank regulators have established leverage
ratio (Tier I capital to average adjusted total assets) requirements providing
for a minimum leverage ratio of 3% for banks meeting certain specified criteria,
including high asset quality, high liquidity, no undue interest rate risk
exposure, excellent control systems, good earnings and the highest regulatory
rating. Institutions not meeting these criteria are expected to maintain a ratio
which exceeds the 3% minimum by at least 100 to 200 basis points. The federal
bank regulatory authorities may, however, set higher capital requirements when a
bank's particular circumstances warrant.
The federal banking agencies possess broad powers to take corrective action
as deemed appropriate for an insured depository institution and its holding
companies. The extent of these powers depends upon whether the institution in
question is considered "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Generally, as an institution is deemed to be less well
capitalized, the scope and severity of the agencies' powers increase. The
agencies' corrective powers can include, among other things, requiring an
insured financial institution to adopt a capital restoration plan which cannot
be approved unless guaranteed by the institution's parent holding company;
placing limits on asset
4
<PAGE> 12
growth and restrictions on acquisitions, branching and activities; placing
restrictions on transactions with affiliates; requiring an institution to sell
stock; restricting the interest rates the institution may pay on deposits to
prevailing rates; prohibiting the institution from accepting deposits from
correspondent banks; prohibiting the payment of principal or interest on
subordinated debt; prohibiting the holding company from making capital
distributions without prior regulatory approval; requiring divestiture of the
institution; and, ultimately, appointing a receiver for the institution. A
bank's business activities may also be influenced by an institution's capital
classification. For instance, only a "well capitalized" depository institution
may accept brokered deposits without prior regulatory approval and only an
"adequately capitalized" depository institution may accept brokered deposits
with prior regulatory approval. At June 30, 1997, each of the Corporation's
subsidiary banks exceeded the required ratios for classification as "well
capitalized."
The deposits of the Corporation's subsidiary banks are insured by the
Federal Deposit Insurance Corporation (the "FDIC") and are subject to FDIC
insurance assessments. The amount of FDIC assessments paid by individual insured
depository institutions is based on their relative risk as measured by
regulatory capital ratios and certain other factors. Currently, the
Corporation's bank subsidiaries are not assessed any premium for deposits
insured by either the Bank Insurance Fund or by the Savings Association
Insurance Fund. The Corporation's bank subsidiaries, however, continue to pay
premiums based on deposit levels to service debt on certain bonds issued by a
governmental entity.
Under U.S. federal law, a financial institution insured by the FDIC under
common ownership with a failed insured institution can be required to indemnify
the FDIC for its losses resulting from the insolvency of the failed institution,
even if such indemnification causes the affiliated institution also to become
insolvent. As a result, the Corporation's subsidiary banks could, under certain
circumstances, be obligated for the liabilities of its affiliates that also are
FDIC-insured institutions. In addition, if any insured depository institution
becomes insolvent and the FDIC is appointed its conservator or receiver, the
FDIC may disaffirm or repudiate any contract or lease to which such institution
is a party, the performance of which is determined to be burdensome and the
disaffirmance or repudiation of which is determined to promote the orderly
administration of the institution's affairs. If federal law were construed to
permit the FDIC to apply these provisions to debt obligations of an insured
depository institution, the result could be that such obligations would be
prepaid without premium even where by their terms they were not prepayable or
prepayable only with a premium. Federal law also accords the claims of a
receiver of an insured depository institution for administrative expenses and
the claims of holders of deposit liabilities of such an institution priority
over the claims of general unsecured creditors of such an institution in the
event of a liquidation or other resolution of such institution.
The BHC Act currently permits adequately capitalized and adequately managed
bank holding companies from any state to acquire banks and bank holding
companies located in any other state without regard to any prohibition of such
transaction under state law, subject to certain conditions. Effective June 1,
1997, the Corporation's bank subsidiaries have the ability, subject to certain
restrictions, to consolidate with other banking subsidiaries of the Corporation
or to acquire by acquisition or merger or, in certain cases, establish de novo,
branches outside of their home state. Competition may continue to increase as
more banks branch across state lines and enter new markets.
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<PAGE> 13
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratio of earnings
to fixed charges of PNC. The consolidated ratio of earnings to fixed charges has
been computed by dividing income before income taxes and cumulative effect of
changes in accounting principles and fixed charges by fixed charges. Fixed
charges represent all interest expense (ratios are presented both excluding and
including interest on deposits), the portion of net rental expense which is
deemed to be equivalent to interest on debt, borrowed funds discount
amortization expense and distributions on trust preferred capital securities.
Interest expense (other than on deposits) includes interest on bank notes and
senior debt, federal funds purchased, repurchase agreements, other borrowed
funds and subordinated debt. Since PNC Funding is a provider of funds to PNC and
its subsidiaries, fixed charges ratios have been presented on a consolidated
basis.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding interest on
deposits...................... 2.40x 2.39x 1.42x 2.10x 2.62x 2.35x
Including interest on
deposits...................... 1.62 1.60 1.21 1.53 1.67 1.37
</TABLE>
CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following unaudited table presents the consolidated ratio of earnings
to combined fixed charges and preferred stock dividends of PNC. The consolidated
ratio of earnings to combined fixed charges and preferred stock dividends has
been computed by dividing income before income taxes, cumulative effect of
changes in accounting principles and fixed charges by fixed charges and
preferred stock dividends. Fixed charges represent all interest expense (ratios
are presented both excluding and including interest on deposits), the portion of
net rental expense which is deemed to be equivalent to interest on debt,
borrowed funds discount amortization expense and distributions on trust
preferred capital securities. Interest expense (other than on deposits) includes
interest on bank notes and senior debt, federal funds purchased, repurchase
agreements, other borrowed funds and subordinated debt.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding interest on
deposits...................... 2.36x 2.38x 1.42x 2.09x 2.60x 2.33x
Including interest on
deposits...................... 1.62 1.60 1.21 1.53 1.66 1.37
</TABLE>
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<PAGE> 14
USE OF PROCEEDS
Unless otherwise provided in the Prospectus Supplement, PNC Funding and PNC
will apply the net proceeds from the sale of the Securities offered hereby to
their general funds to be used for corporate financing purposes, including
advances to PNC (in the case of PNC Funding) and subsidiaries of PNC (including
its bank subsidiaries), financing of possible future acquisitions, repayment of
outstanding indebtedness and repurchases of issued and outstanding shares of
Common Stock under authorized programs of PNC. The amount and timing of advances
will depend on future growth and financing requirements of PNC and its
subsidiaries. Pending ultimate application, the net proceeds may be used to make
short-term investments or reduce borrowed funds. In view of anticipated funding
requirements, PNC Funding or PNC may from time to time engage in additional
financings of a character and in amounts to be determined.
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
The Debt Securities will constitute either Senior Debt Securities of PNC
Funding or Subordinated Debt Securities of PNC Funding. The following
description of the terms of the Debt Securities sets forth certain general terms
and provisions of the Debt Securities to which any Prospectus Supplement may
relate. The particular terms of the Debt Securities and Guarantees offered by
any Prospectus Supplement ("Offered Debt Securities") and the extent, if any, to
which such general provisions may apply to the Debt Securities and Guarantees so
offered will be described in the Prospectus Supplement relating to such Offered
Debt Securities.
The Offered Debt Securities are to be issued under an Indenture, dated as
of December 1, 1991, as amended by a Supplemental Indenture dated as of February
15, 1993 (as amended, the "Indenture"), a copy of which has been filed with the
Commission. The Chase Manhattan Bank, formerly known as Chemical Bank and as
successor by merger to Manufacturers Hanover Trust Company, shall be the Trustee
under the Indenture ("Trustee"), unless a different Trustee for a series of Debt
Securities is named in the Prospectus Supplement. For each series of Debt
Securities, a supplemental indenture may be entered into among PNC Funding, PNC
and The Chase Manhattan Bank or such other Trustee as may be named in the
Prospectus Supplement relating to such series of Debt Securities. The following
summaries of certain provisions of the Indenture do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein of certain terms.
Wherever particular sections or defined terms of the Indenture are referred to,
it is intended that such sections or defined terms shall be incorporated herein
by reference.
GENERAL
The Debt Securities will be unsecured obligations of PNC Funding.
Although the amount of Offered Debt Securities will be limited to the
amount that will result in net proceeds to PNC Funding as described on the cover
page of this Prospectus, the Indenture does not limit the aggregate principal
amount of debt securities that may be issued thereunder from time to time in one
or more series.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the terms of the Offered Debt
Securities, including, where applicable; (1) the form, title and denomination of
the Debt Securities; (2) the aggregate principal amount of the Debt Securities;
(3) the date or dates on which Debt Securities may be issued; (4) the date or
dates on which the principal of, and premium, if any, on the Debt Securities
shall be payable; (5) the rate or rates, or the method of determination thereof,
at which the Debt Securities shall bear interest, if any, the date or dates from
which such interest shall accrue, and the Interest Payment Dates on which such
interest shall be payable; (6) the priority of payment of such Debt Securities
and thus whether they shall be designated as Senior Debt Securities or
Subordinated Debt Securities; (7) the place or places where the principal of,
and premium, if any, and interest on Debt Securities of the series shall be
payable; (8) the provisions, if any, for optional or mandatory redemption of the
Debt Securities, including any sinking fund provisions; (9) if other than the
principal amount thereof, the
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<PAGE> 15
portion of the principal amount of Debt Securities which shall be payable upon
declaration of acceleration of the Maturity thereof in accordance with the
provisions of the Indenture; (10) whether payment of the principal of, premium,
if any, and interest, if any, on the Debt Securities shall be with or without
deduction for taxes, assessments or governmental charges, and with or without
reimbursement of taxes, assessments or governmental charges paid by Holders;
(11) any Events of Default or Defaults with respect to the Debt Securities that
differ from those set forth in the Indenture; (12) whether the securities of
such series are to be issued in a form registered as to principal ("Registered
Securities") (with or without interest coupons ("Coupons")) or in a form
registered with regard to principal and interest ("Fully Registered Securities")
or in bearer form ("Unregistered Securities"), or as both Registered Securities
and Unregistered Securities; (13) the currency or currencies, or currency unit
or currency units in which the principal of, and premium, if any, and interest,
if any, on the Debt Securities are to be denominated, payable, redeemable or
repurchaseable, as the case may be; (14) if other than as set forth in the
Indenture, provisions the satisfaction and discharge of the indebtedness
represented by the Debt Securities; (15) whether the Debt Securities of such
series are issuable as a global security and, in such case, the identity of the
depositary for such series; (16) any trustees, paying agents, transfer agents or
registrars for the Debt Securities; (17) with regard to Debt Securities that do
not bear interest, the dates for certain required reports to the Trustee; (18)
any special federal income tax considerations applicable to any Offered Debt
Securities; and (19) any other terms of such Debt Securities.
Any Subordinated Debt Securities offered are intended to be included as
regulatory capital under recent interpretations of the Federal Reserve Board
and, as a result, contain subordination and acceleration provisions different
from, and covenants more limited than in, prior issuances of PNC Funding's
Subordinated Securities.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of or any interest on any series of Debt
Securities is payable in foreign currencies or foreign currency units, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such issue of Debt Securities and such currencies or currency
units will be set forth in the Prospectus Supplement relating thereto.
Although the Indenture provides that Debt Securities may be issued as
Registered Securities, with or without Coupons, or Unregistered Securities, each
series of Debt Securities will be issued as Fully Registered Securities unless
the Prospectus Supplement provides otherwise. Debt Securities that are not
registered as to interest shall have Coupons attached, unless issued as Original
Issue Discount Securities. All references to the Debt Securities shall, where
applicable, include the Coupons, if any, appertaining thereto.
Principal of, and premium, if any, and interest on Fully Registered
Securities will be payable at the Place of Payment designated for such Debt
Securities; provided that payment of interest may, at the option of PNC Funding,
be made by check mailed to the address of the person entitled thereto as it
appears in the Security Register at the close of business on the day or days
specified in the Prospectus Supplement relating to such Debt Securities. The
principal of, and premium, if any, and interest on any Debt Securities in other
forms will be payable in such manner and at such place or places as may be
designated by PNC Funding and specified in the Prospectus Supplement relating to
such Debt Securities. (Sections 3.01 and 5.01)
The Debt Securities may be exchanged, and Registered Securities may be
transferred, at the Corporate Trust Office of the Trustee for such series of
Debt Securities or at any other office or agency maintained by PNC Funding or
PNC for such purposes. Unregistered Securities and Coupons shall be transferred
by delivery. No service charge will be made for any transfer or exchange of the
Debt Securities, but PNC Funding may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Section 3.05)
Unless the Prospectus Supplement provides otherwise, each series of the
Debt Securities will be issued only in denominations of $1,000 or any integral
multiple thereof and payable in Dollars. (Section 3.02) Under the Indenture,
however, Debt Securities may be issued in any denomination and payable in a
foreign currency or currency unit. (Section 3.01)
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<PAGE> 16
Debt Securities may be issued with "original issue discount" (within the
meaning of the Internal Revenue Code). Federal income tax consequences and other
special considerations applicable to any such securities issued with original
issue discount will be described in the Prospectus Supplement relating thereto.
SENIOR DEBT SECURITIES
The Senior Debt Securities will rank equally with all Senior Indebtedness
of PNC Funding. At June 30, 1997, such outstanding Senior Indebtedness of PNC
Funding was approximately $513.7 million.
Senior Indebtedness of PNC Funding, defined in the Indenture as "Senior
Company Indebtedness," means the principal of, and premium, if any, and interest
on (i) all indebtedness for money borrowed, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, except
(A) such indebtedness as is by its terms expressly stated not to be superior in
right of payment to the Subordinated Debt Securities or to rank pari passu with
the Subordinated Debt Securities, and (B) PNC Funding's 9 7/8% Subordinated
Notes Due 2001, 6 7/8% Subordinated Notes Due 2003, 6 1/8% Subordinated Notes
Due 2003, 7 3/4% Subordinated Notes Due 2004 and 6 7/8% Subordinated Notes Due
2007 and CCNB Corporation's 10.55% Equity Commitment Notes Due 1998 assumed by
PNC Funding and PNC in connection with the acquisition of CCNB Corporation on
October 23, 1992 and (ii) any deferrals, renewals or extensions of any such
Senior Indebtedness of PNC Funding. The term "indebtedness for money borrowed"
as used in the prior sentence means any obligation of, or any obligation
guaranteed by, PNC Funding for the repayment of money borrowed, whether or not
evidenced by bonds, debentures, notes or other written instruments, any
capitalized lease obligation and any deferred obligation for payment of the
purchase price of any property or assets. Senior Indebtedness of PNC Funding
would include any borrowings under the $500 million credit facility under an
Amended and Restated Credit Agreement dated as of March 18, 1996 (the "$500
Million Credit Facility"), under which no amounts are outstanding as of the date
of this Prospectus. There is no limitation under the Indenture on the issuance
of additional Senior Indebtedness of PNC Funding.
SUBORDINATED DEBT SECURITIES
The payment of the principal of and interest on the Subordinated Debt
Securities will, to the extent set forth in the Indenture, be subordinated in
right of payment to the prior payment in full of all Senior Indebtedness of PNC
Funding. (Section 12.01) In certain events of insolvency, the payment of the
principal of and interest on the Subordinated Debt Securities will, to the
extent set forth in the Indenture, also be effectively subordinated in right of
payment to the prior payment in full of all Other Company Obligations (as
defined in the Indenture). (Section 12.13) Other Company Obligations means
obligations of PNC Funding associated with derivative products such as interest
rate and currency exchange contracts, foreign exchange contracts, commodity
contracts or any similar arrangements, unless the instrument by which PNC
Funding incurred, assumed or guaranteed the obligation expressly provides that
it is subordinate or junior in right of payment to any other indebtedness or
obligations of PNC Funding. At June 30, 1997, there were no Other Company
Obligations of PNC Funding. (Section 1.01)
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency or similar
proceedings of PNC Funding, the holders of all Senior Indebtedness of PNC
Funding will first be entitled to receive payment in full of all amounts due or
to become due thereon before the Holders of the Subordinated Debt Securities
will be entitled to receive any payment in respect of the principal of or
interest on the Subordinated Debt Securities. If upon any such payment or
distribution of assets to creditors there remain, after giving effect to such
subordination provisions in favor of the holders of Senior Indebtedness of PNC
Funding, any amounts of cash, property or securities available for payment or
distribution in respect of Subordinated Debt Securities (as defined in the
Indenture, "Excess Proceeds"), and if, at such time, any creditors in respect of
Other Company Obligations have not received payment in full of all amounts due
or to become due on or in respect of such Other Company Obligations, then such
Excess Proceeds shall first be applied to pay or provide for the payment in full
of such Other Company Obligations before any payment or distribution may be made
in respect of the Subordinated Debt Securities. In addition, no payment may be
9
<PAGE> 17
made of the principal of or interest on the Subordinated Debt Securities, or in
respect of any retirement, purchase or other acquisition of any of the
Subordinated Debt Securities at any time when (i) there is a default in the
payment of the principal of, or premium, if any, or interest on or otherwise in
respect of any Senior Indebtedness of PNC Funding or (ii) any event of default
with respect to any Senior Indebtedness of PNC Funding has occurred and is
continuing, or would occur as a result of such payment on the Subordinated Debt
Securities or any retirement, purchase or other acquisition of any of the
Subordinated Debt Securities permitting the holders of such Senior Indebtedness
of PNC Funding to accelerate the maturity thereof. Except as described above,
the obligation of PNC Funding to make payment of the principal of or interest on
the Subordinated Debt Securities will not be affected. By reason of such
subordination, in the event of insolvency, holders of the Subordinated Debt
Securities may recover less, ratably, than holders of Senior Indebtedness of PNC
Funding and Other Company Obligations and may also recover less, ratably, than
holders of Existing Company Subordinated Indebtedness and other creditors of PNC
Funding. (Sections 12.01, 12.02, 12.03, and 12.13)
Existing Company Subordinated Indebtedness means PNC Funding's 9 7/8%
Subordinated Notes Due 2001 and CCNB Corporation's 10.55% Equity Commitment
Notes Due 1998 assumed by PNC Funding and PNC in connection with the acquisition
of CCNB Corporation on October 23, 1992. (Section 1.01) At June 30, 1997, the
Existing Company Subordinated Indebtedness was approximately $101.3 million.
PNC Funding's obligations under the Subordinated Debt Securities shall rank
pari passu in right of payment with each other and with the Existing Company
Subordinated Indebtedness, subject to the obligations of the Holders of
Subordinated Debt Securities to pay over any Excess Proceeds to creditors in
respect of Other Company Obligations as provided in the Indenture. (Section
12.13)
GUARANTEES
PNC will unconditionally guarantee the due and punctual payment of the
principal of, premium, if any, and interest on the Debt Securities when and as
the same shall become due and payable, whether at maturity, upon redemption or
otherwise. (Section 3.12)
GUARANTEES OF SENIOR DEBT SECURITIES
The Guarantees of Senior Debt Securities will rank equally with all Senior
Indebtedness of PNC. At June 30, 1997, the outstanding Senior Indebtedness of
PNC was approximately $869.9 million, which is inclusive of the guarantee of
Senior Indebtedness of PNC Funding.
Senior Indebtedness of PNC, defined in the Indenture as "Senior Guarantor
Indebtedness," means the principal of, and premium, if any, and interest on (i)
all indebtedness of PNC for money borrowed, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, except
(A) such indebtedness as is by its terms expressly stated not to be superior in
right of payment to the Subordinated Guarantees or to rank pari passu with the
Subordinated Guarantees, (B) PNC's 8 1/4% Convertible Subordinated Debentures
Due 2008 and PNC's 8 1/2% Convertible Subordinated Debentures Due 2005
originally issued by Citizens Fidelity Corporation, and (C) PNC's Guarantee of
PNC Funding's 9 7/8% Subordinated Notes Due 2001, 6 7/8% Subordinated Notes Due
2003, 6 1/8% Subordinated Notes Due 2003, 7 3/4% Subordinated Notes Due 2004 and
6 7/8% Subordinated Notes Due 2007 and CCNB Corporation's 10.55% Equity
Commitment Notes Due 1998 assumed by PNC Funding and PNC in connection with the
acquisition of CCNB Corporation on October 23, 1992, and (ii) any deferrals,
renewals or extensions of any such Senior Indebtedness of PNC. The term
"indebtedness for money borrowed" as used in the prior sentence means any
obligation of, or any obligation guaranteed by, PNC for the repayment of money
borrowed, whether or not evidenced by bonds, debentures, notes or other written
instruments, any capitalized lease obligation and any deferred obligation for
payment of the purchase price of any property or assets. Senior Indebtedness of
PNC includes PNC's Guarantee of PNC Funding's 4.93% Senior Notes Due 1998, 5.43%
Senior Notes Due 2000 and 5.18% Senior Notes Due 1999 and the following joint
and several obligations of PNC and PNC Bancorp, Inc. assumed in connection with
the merger of Midlantic Corporation with PNC Bancorp, Inc. at December 31, 1996:
8 1/4% Convertible Subordinated Debentures Due 2010, 9.875% Subordinated Capital
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Notes Due 1999, 9.20% Subordinated Capital Notes Due 2001 and 9.25% Senior Notes
Due 1999. Senior Indebtedness of PNC would also include PNC's Guarantee of any
borrowings under the $500 Million Credit Facility. There is no limitation under
the Indenture on the issuance of additional Senior Indebtedness of PNC.
GUARANTEES OF SUBORDINATED DEBT SECURITIES
The payment of the principal of and interest on the Subordinated Debt
Securities pursuant to the Guarantees of the Subordinated Debt Securities
("Subordinated Guarantees") will, to the extent set forth in the Indenture, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness of PNC. (Section 12.04) In certain events of insolvency, the
payment of the principal of and interest on the Subordinated Guarantees will, to
the extent set forth in the Indenture, also be effectively subordinated in right
of payment to the prior payment in full of all Other Guarantor Obligations (as
defined in the Indenture). (Section 12.05) Other Guarantor Obligations means
obligations of PNC associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts or
any similar arrangements, unless the instrument by which PNC incurred, assumed
or guaranteed the obligation expressly provides that it is subordinate or junior
in right of payment to any other indebtedness or obligations of PNC. (Section
1.01) At June 30, 1997, there were no Other Guarantor Obligations of PNC.
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of PNC, the holders of all Senior Indebtedness of PNC will first be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the Subordinated Guarantees will be entitled to receive
any payment in respect of the principal of or interest on the Subordinated Debt
Securities pursuant to the Subordinated Guarantees. If upon any such payment or
distribution of assets to creditors there remain, after giving effect to such
subordination provisions in favor of the holders of Senior Indebtedness of PNC,
any amounts of cash, property or securities available for payment or
distribution in respect of Subordinated Guarantees (as defined in the Indenture,
"Excess Proceeds"), and if, at such time, any creditors in respect of Other
Guarantor Obligations have not received payment in full of all amounts due or to
become due on or in respect of such Other Guarantor Obligations, then such
Excess Proceeds shall first be applied to pay or provide for the payment in full
of such Other Guarantor Obligations before any payment or distribution may be
made in respect of the Subordinated Guarantees. In addition, no payment may be
made of the principal of or interest on the Subordinated Debt Securities
pursuant to the Subordinated Guarantees or in respect of any retirement,
purchase or other acquisition of any of the Subordinated Debt Securities
pursuant to the Subordinated Guarantees, at any time when (i) there is a default
in the payment of the principal of, premium, if any, or interest on or otherwise
in respect of any Senior Indebtedness of PNC or (ii) any event of default with
respect to any Senior Indebtedness of PNC has occurred and is continuing, or
would occur as a result of such payment on the Subordinated Debt Securities
pursuant to the Subordinated Guarantees or any retirement, purchase or other
acquisition of any of the Subordinated Debt Securities pursuant to the
Subordinated Guarantees, permitting the holders of such Senior Indebtedness of
PNC to accelerate the maturity thereof. Except as described above, the
obligation of PNC to make payment under the Subordinated Guarantees will not be
affected. By reason of such subordination, in the event of insolvency, holders
of Subordinated Guarantees of PNC may recover less, ratably, than holders of
Senior Indebtedness of PNC and Other Guarantor Obligations and may also recover
less, ratably, than holders of Existing Guarantor Subordinated Indebtedness (as
defined in the Indenture) and other creditors of PNC. (Section 3.12, 12.04,
12.05, 12.06 and 12.14)
Existing Guarantor Subordinated Indebtedness means the Guarantor's 8 1/4%
Convertible Subordinated Debentures Due 2008, PNC's Convertible Subordinated
Debentures Due 2005 originally issued by Citizens Fidelity Corporation, PNC's
Guarantee of PNC Funding's 9 7/8% Subordinated Notes Due 2001, and CCNB
Corporation's 10.55% Equity Commitment Notes Due 1998 assumed by PNC Funding and
PNC in connection with the acquisition of CCNB on October 23, 1992. (Section
1.01) At June 30, 1997, the Existing Guarantor Subordinated Indebtedness was
approximately $102.1 million. PNC's 8.315% Junior Subordinated Debentures Due
2027, in the aggregate principal amount of $300 million, issued on May 12, 1997
would be subordinated to the Debt Securities and the Existing Guarantor
Subordinated Indebtedness.
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PNC's obligations under the Subordinated Guarantees shall rank pari passu
in right of payment with each other and with the Existing Guarantor Subordinated
Indebtedness, subject to the obligations of the Holders of Subordinated
Guarantees to pay over any Excess Proceeds to creditors in respect of Other
Guarantor Obligations as provided in the Indenture. (Section 12.14)
Since PNC is a holding company separate from its subsidiaries, the rights
of PNC to share in the distribution of the assets of any subsidiary upon the
subsidiary's liquidation, reorganization or otherwise will be subject to the
prior claims of the subsidiary's creditors (including in the case of any bank
subsidiary, its depositors), except to the extent that PNC may itself be a
creditor with recognized claims against the subsidiary. In addition, there are
certain regulatory and other limitations on the payment of dividends and on
loans and other transfers of funds to PNC by its bank subsidiaries. See
"Supervision, Regulation and Other Matters."
CERTAIN COVENANTS
The Indenture contains certain covenants that impose various restrictions
on PNC Funding and PNC and, as a result, afford the holders of Debt Securities
certain protections. Although statements have been included as to the general
purpose and effect of the covenants, investors must review the full text of the
covenants to be able to meaningfully evaluate the covenants.
Restriction on Sale or Issuance of Voting Stock of a Principal Subsidiary Bank
The covenant described below is designed to ensure that, for so long as any
Senior Debt Securities are issued and outstanding, PNC will continue directly or
indirectly to own and thus serve as the holding company for its Principal
Subsidiary Banks (defined as each of (i) PNC Bank, (ii) any other Subsidiary
Bank the consolidated assets of which constitute 20% or more of the consolidated
assets of PNC and its subsidiaries, (iii) any other Subsidiary Bank designated
as a Principal Subsidiary Bank by the board of directors of PNC, or (iv) any
Subsidiary that owns any Voting Shares or certain rights to acquire Voting
Shares of any Principal Subsidiary Bank, and their respective successors,
provided any such successor is a Subsidiary Bank or a Subsidiary, as
appropriate). Principal Subsidiary Banks, in the past, have provided PNC income
in the form of dividends. See "Supervision, Regulation and Other Matters." The
Indenture prohibits PNC, unless debtholder consent is obtained from the holders
of Senior Debt Securities, from (i) selling or otherwise disposing of, and
permitting a Principal Subsidiary Bank to issue, Voting Shares or certain rights
to acquire Voting Shares of a Principal Subsidiary Bank, (ii) permitting the
merger or consolidation of a Principal Subsidiary Bank with or into any other
corporation, or (iii) permitting the sale or other disposition of all or
substantially all the assets of any Principal Subsidiary Bank, if after giving
effect to any one of such transactions and the issuance of the maximum number of
Voting Shares issuable upon the exercise of all such rights to acquire Voting
Shares of a Principal Subsidiary Bank, PNC would own directly or indirectly less
than 80% of the Voting Shares of such Principal Subsidiary Bank, with the
following exceptions: (i) transactions required by any law, or any regulation or
order of any governmental authority; (ii) transactions required as a condition
imposed by any governmental authority to the acquisition by PNC, directly or
indirectly, or any other corporation or entity if thereafter, (a) PNC would own
at least 80% of the Voting Shares of such other corporation or entity, (b) the
Consolidated Banking Assets of PNC would be at least equal to those prior
thereto, and (c) the board of directors of PNC shall have designated such other
corporation or entity a Principal Subsidiary Bank; (iii) transactions that do
not reduce the percentage of Voting Shares of such Principal Subsidiary Bank
owned directly or indirectly by PNC; and (iv) transactions where the proceeds
are invested within 180 days after such transaction in any one or more
Subsidiary Banks. However, the Indenture permits the merger of a Principal
Subsidiary Bank with and into a Principal Subsidiary Bank or PNC, the
consolidation of Principal Subsidiary Banks into a Principal Subsidiary Bank or
PNC, or the sale or other disposition of all or substantially all of the assets
of any Principal Subsidiary Bank to another Principal Subsidiary Bank or PNC,
if, in any such case in which the surviving, resulting or acquiring entity is
not PNC, PNC would own, directly or indirectly, at least 80% of the Voting
Shares of the Principal Subsidiary Bank surviving such merger, resulting from
such consolidation or acquiring such assets. (Section 5.06)
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Ownership of PNC Funding
The Indenture contains a covenant that, so long as any of the Debt
Securities are outstanding and subject to certain rights described below under
"Consolidation or Merger," PNC will continue to own, directly or indirectly, all
of the outstanding voting shares of PNC Funding. (Section 5.07)
Restriction on Liens
The purpose of the restriction on liens covenant is to preserve PNC's
direct or indirect interest in Voting Shares of Principal Subsidiary Banks free
of security interests of other creditors. The covenant permits certain specified
liens and liens where the Senior Debt Securities are equally secured. The
Indenture prohibits PNC and its subsidiaries from creating or permitting any
liens (other than certain tax and judgment liens) upon Voting Shares of any
Principal Subsidiary Bank to secure indebtedness for borrowed money without
making effective provision whereby the Senior Debt Securities shall be equally
and ratably secured, except that PNC may create or permit (i) purchase money
liens and liens on Voting Shares of any Principal Subsidiary Bank existing at
the time such Voting Shares are acquired or created within 120 days thereafter;
(ii) the acquisition of any Voting Shares of any Principal Subsidiary Bank
subject to liens at the time of acquisition or the assumption of obligations
secured by a lien on such Voting Shares; (iii) under certain circumstances,
renewals, extensions or refunding of the liens described in (i) and (ii) above;
and (iv) liens to secure loans or other extensions of credit under Section 23A
of the Federal Reserve Act or any successor or similar federal law or
regulation. (Section 5.08)
Consolidation or Merger
The covenant described below protects the holders of Debt Securities upon
certain transactions involving PNC Funding or PNC by requiring any successor to
PNC Funding or PNC to assume the predecessor's obligations under the Indenture,
and prohibits transactions that would result in an Event of Default, a Default
or an event which could become an Event of Default or Default under the
Indenture. PNC Funding or PNC may consolidate with, merge into, or transfer
substantially all of its properties to, any other corporation organized under
the laws of any domestic jurisdiction, provided that the successor corporation
assumes all obligations of PNC Funding or PNC, as the case may be, under the
Debt Securities and the Guarantees and under the Indenture, that after giving
effect to the transaction no Event of Default or Default, and no event which,
after notice or lapse of time, would become an Event of Default or Default,
shall have occurred and be continuing, and that certain other conditions are
met. (Sections 10.01 and 10.03)
Except as may be disclosed in a Prospectus Supplement and other than the
restrictions on liens on Voting Shares of Principal Subsidiary Banks and on
certain dispositions of Principal Subsidiary Banks described above, the
Indenture and the Debt Securities do not contain any covenants or other
provisions designed to afford holders of the Debt Securities protection in the
event of a highly leveraged transaction involving PNC.
MODIFICATION AND WAIVER
Modifications of the Indenture may be made by PNC Funding, PNC and the
Trustee with the consent of the Holders of the majority in aggregate principal
amount of Outstanding Debt Securities of each series affected thereby; provided,
however, that no such modification may, without the consent of the Holder of
each Outstanding Debt Security affected thereby: (i) change the Maturity of the
principal of, or the stated Maturity of any installment of interest on, any such
Debt Security; (ii) reduce the principal amount of, or the premium, if any, or
the interest on such Debt Security (including, in the case of an Original Issue
Discount Security, the amount payable upon acceleration of the maturity
thereof); (iii) change the place or currency of payment of principal of or
premium, if any, or interest on any such Debt Security; (iv) impair the right to
institute suit for the enforcement of any payment on or with respect to any such
Debt Security; (v) reduce the aforesaid percentage in principal amount of
Outstanding Debt Securities of any series necessary to modify the Indenture or
the percentage in principal amount of Outstanding Debt Securities necessary for
any waiver of compliance with conditions and defaults thereunder; or (vi) modify
or affect in any manner adverse to a Holder the terms and conditions of the
Guarantees. (Section 9.02)
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Modification and amendment of the Indenture may be made by PNC Funding,
PNC, and the Trustee without the consent of any Holder of Debt Securities for
any of the following purposes: (i) to evidence the succession of another
corporation to PNC Funding or PNC; (ii) to provide for the acceptance of
appointment of a successor Trustee; (iii) to add to the covenants of PNC Funding
or PNC for the benefit of the Holders of Debt Securities; (iv) to cure any
ambiguity, defect or inconsistency in the Indenture, provided such action does
not adversely affect the Holders of Debt Securities in any material respect; (v)
to secure the Debt Securities under applicable provisions of the Indenture; (vi)
to establish the form or terms of Debt Securities; (vii) to permit the payment
in the United States of principal, premium or interest on Unregistered
Securities; or (viii) to provide for the issuance of uncertificated Debt
Securities in place of certificated Debt Securities. (Section 9.01)
The Holders of a majority in principal amount of Outstanding Debt
Securities of any series may waive, insofar as that series is concerned,
compliance with certain covenants, including those described under the captions
above entitled "Restriction on Sale or Issuance of Capital Stock of a Principal
Subsidiary Bank," "Ownership of PNC Funding" and "Restriction on Liens."
(Section 5.09) No waiver by the Holders of any series of Subordinated Debt
Securities is required with respect to the covenant described under the caption
above entitled "Restriction on Sale or Issuance of Voting Stock of a Principal
Subsidiary Bank." (Section 5.10) Covenants concerning the payment of principal,
premium, if any, and interest on the Debt Securities, compliance with the terms
of the Indenture, maintenance of an agency and certain monies held in trust, may
only be waived pursuant to a supplemental indenture executed with the consent of
each Holder of Debt Securities affected by such waiver. The covenant concerning
certain reports required by federal law may not be waived.
EVENTS OF DEFAULT, DEFAULTS, WAIVERS
The Indenture defines an Event of Default with respect to any series of
Senior Debt Securities as being any one of the following events and such other
event as may be established for the Debt Securities of a particular series: (i)
default for 30 days in the payment of interest on such series; (ii) default in
any payment of principal of or premium, if any, on such series; (iii) default in
the payment of any sinking fund installment with respect to such series; (iv)
default for 90 days after appropriate notice in performance of any other
covenant or warranty in the Indenture (other than a covenant or warranty
included in the Indenture solely for the benefit of a series of Debt Securities
other than that series); (v) the occurrence of certain events relating to
bankruptcy, insolvency or reorganization of PNC, PNC Funding or any Principal
Subsidiary Bank; or (vi) any other Event of Default provided in the supplemental
indenture under which such Senior Debt Securities are issued. (Section 7.01(a))
The Indenture defines an Event of Default with respect to any series of
Subordinated Debt Securities as certain events involving the bankruptcy or
reorganization of PNC or any Principal Subsidiary Bank. There is no right of
acceleration in the case of events involving the bankruptcy, insolvency or
reorganization of PNC Funding or of a default in the payment of principal,
interest, premium, if any, or any sinking fund payment with respect to a series
of Subordinated Debt Securities or in the case of a default in the performance
of any other covenant of PNC Funding or PNC in the Indenture. The Indenture
defines a Default with respect to any series of Subordinated Debt Securities as
any of the items listed in (i) through (iv) of the above paragraph, events
involving the bankruptcy, insolvency or reorganization of PNC Funding and such
other Default as may be established for the Subordinated Debt Securities of a
particular series. A breach of the covenant described under the caption above
entitled "Restriction on Sale or Issuance of Voting Stock of a Principal
Subsidiary Bank" will not result in a default with respect to any Series of
Subordinated Debt Securities. (Sections 7.01(b) and (c))
In case an Event of Default shall occur and be continuing with respect to
any series of Debt Securities, either the Trustee or the Holders of not less
than 25% in principal amount of Outstanding Debt Securities of that series may
declare the principal of such series (or if Debt Securities of that series are
Original Issue Discount Securities, such portion of the principal as may be
specified in the terms of that series) to be due and payable immediately. At any
time after a declaration of acceleration has been made but before a judgment or
decree for payment of money due has been obtained by the Trustee, the Holders of
a majority in principal
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amount of the Outstanding Debt Securities of such series may rescind any
declaration of acceleration and its consequences, if all payments due (other
than those due as a result of acceleration) have been made and all Events of
Default and Defaults have been remedied or waived. Any Event of Default or
Default with respect to a particular series of Debt Securities may be waived by
the Holders of a majority in principal amount of the Outstanding Debt Securities
of such series, except in each case of a failure to pay principal of, or
premium, if any, or interest on, or any sinking fund installment in respect of,
such Debt Securities or in respect of a covenant or provision of the Indenture
which cannot be modified without the consent of the Holder of each Outstanding
Debt Security affected. (Sections 7.02, 7.08 and 7.13)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default or a Default shall occur and be continuing,
the Trustee will be under no obligation to exercise any of the rights or powers
in the Indenture at the request or direction of Holders of Debt Securities,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity. Subject to such provisions for indemnification and certain
limitations contained in the Indenture, the Holders of a majority in principal
amount of the Outstanding Debt Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee with respect to Debt Securities of such series.
(Sections 8.03 and 7.12)
The Indenture provides that in the event of a default of 30 days in the
payment of interest upon any Debt Security of any series, or defaults in the
payment of any principal of or premium, if any, or any sinking fund installment
with respect to any Debt Securities of any series, PNC Funding will, upon demand
of the Trustee, pay to it, for the benefit of the Holder of any such Debt
Security the whole amount then due and payable on such Debt Security for
principal and interest. The Indenture, as amended, further provides that if PNC
Funding fails to pay such amount forthwith upon such demand, the Trustee may,
among other things, institute a judicial proceeding for the collection thereof.
(Section 7.03)
The Indenture requires PNC Funding and PNC to file with the Trustee, on an
annual basis, certificates as to the absence of any default and as to compliance
with the terms of the Indenture. The Indenture provides that the Trustee may
withhold notice to the Holders of Debt Securities of any default (except in
payment of principal, premium, if any, interest or sinking fund installment) if
the Trustee considers it in the interest of the Holders of Debt Securities to do
so. (Sections 5.04 and 8.02)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default or Default with respect to Debt
Securities of that series and unless the Holders of at least 25% in principal
amount of the Outstanding Debt Securities of that series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the Holders
of a majority in principal amount of the Outstanding Debt Securities of that
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. However, the Holder of any Debt
Security will have an absolute right to receive payment of the principal of, and
premium, if any, and interest on such Debt Security on the due dates expressed
in such Debt Security and to institute suit for the enforcement of any such
payment. (Sections 7.07 and 7.08)
DEFEASANCE
Except as may otherwise be provided in the applicable Prospectus Supplement
with respect to the Debt Securities of any series, the Indenture provides that
PNC Funding and PNC shall be discharged from their obligations under the Debt
Securities of a series at any time prior to the Stated Maturity or redemption
thereof when (a) PNC Funding or PNC has irrevocably deposited with the Trustee,
in trust, (i) sufficient funds to pay the principal of (and premium, if any),
and interest to Stated Maturity (or redemption) on, the Debt Securities of such
series, or (ii) such amount of government securities as will, together with the
predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay when due the principal of, and
premium, if any, and interest to Stated Maturity (or redemption) on, the Debt
Securities of such series, and (b) PNC Funding or PNC has paid all other sums
payable with respect to the
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Debt Securities of such series. Deposited funds shall be in the currency or
currency unit in which the Debt Securities are denominated. Deposited government
securities shall be direct obligations of, or obligations the principal of and
interest on which are fully guaranteed by, the government which issued the
currency in which the Debt Securities are denominated, and which are not subject
to prepayment, redemption or call. Upon such discharge, the Holders of the Debt
Securities of such series shall no longer be entitled to the benefits of the
Indenture, except for the purposes of registration of transfer and exchange of
the Debt Securities of such series, and replacement of lost, stolen or mutilated
Debt Securities, and shall look only to such deposited funds or obligations for
payment. (Sections 11.01 and 11.02)
For federal income tax purposes, the deposit and discharge may, depending
on a variety of factors, result in a taxable gain or loss being recognized by
the Holders of the affected Debt Securities. Prospective investors are urged to
consult their own tax advisers as to the specific consequences of such a deposit
and discharge, including the applicability and effect of tax laws other than
federal income tax laws.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of a global security ("Global Security") that will be deposited with, or on
behalf, of, a depositary (the "Depositary"). Such Depositary will be The
Depository Trust Company ("DTC"), unless otherwise identified in the Prospectus
Supplement relating to such series. A Global Security may be issued as either a
Registered or Unregistered Security and in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for individual certificates
evidencing Debt Securities in definitive form represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security or any nominee thereof to a successor of such Depositary or a
nominee of such successor. (Section 2.05)
If DTC is the Depositary for a series of Debt Securities, such series will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully-registered Global Security will be issued
for such series of Debt Securities, in the aggregate principal amount of such
series, and will be deposited with DTC. If, however, the aggregate principal
amount of such series of Debt Securities exceeds $200 million, one Global
Security will be issued with respect to each $200 million of principal amount
and an additional Global Security will be issued with respect to any remaining
principal amount of such series.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of a series of Debt Securities under the DTC system will need to
be made by or through Direct Participants, which will receive a credit for the
Debt Securities on DTC's records. The ownership interest of each actual
purchaser of each Debt Security ("Beneficial Owner") is in turn to be recorded
on the Direct Participants' and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as provide periodic statements of their
holdings, from the Direct Participants or Indirect Participants through which
the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Debt Securities are to be accomplished by entries made on the
books of the Participants acting
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on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interest in the Global Security or Global
Securities, except in the event that use of the book-entry system for such Debt
Securities is discontinued.
To facilitate subsequent transfers, all Global Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Global Securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has advised
PNC and PNC Funding that DTC will have no knowledge of the actual Beneficial
Owners of the Global Securities, and that DTC's records reflect only the
identity of the Direct Participants to whose accounts Global Securities are
credited, which may or may not be the Beneficial Owners. Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
To the extent any series of Debt Securities is redeemable, redemption
notices will be sent to DTC. If less than all of the Debt Securities within an
issue are being redeemed, DTC's practice is to determine by lot the amount of
the interest of each Direct Participant in such issue to be redeemed. The
applicable Prospectus Supplement for a series of Debt Securities will indicate
whether such series is redeemable.
To the extent applicable, neither DTC nor Cede & Co. will consent or vote
with respect to any Global Securities deposited with it. Under its usual
procedure, DTC will mail an Omnibus Proxy to the issuer as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting and
voting rights to those Direct Participants to whose accounts the Debt Securities
are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Principal and interest payments on the Global Securities deposited with DTC
will be made to Cede & Co., as nominee of DTC. DTC's practice is to credit
Direct Participants' accounts, upon DTC's receipt of funds and corresponding
detail information from the issuer, on the payable date in accordance with their
respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as in the case with securities held for the accounts of customers
registered in "street name", and will be the responsibility of such Participant
and not DTC or PNC Funding, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal and interest to Cede
& Co. will be the responsibility of the Trustee, who unless otherwise indicated
in the applicable Pricing Supplement, will be PNC Funding's paying agent,
disbursements of such payments to Direct Participants will be the responsibility
of DTC, and disbursements of such payments to Beneficial Owners will be the
responsibility of Direct Participants and Indirect Participants. None of PNC
Funding, PNC, the Trustee, any paying agent, or the registrar for the Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security or Global Securities for any series of Debt
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial interests.
If DTC notifies the Company that it is unwilling, unable or ineligible to
continue as the Depositary and a successor depositary is not appointed by PNC
Funding within 90 days after the Company receives such notice, PNC Funding will
issue certificated Debt Securities for each series in definitive form in
exchange for each Global Security. If PNC Funding determines not to have a
series of Debt Securities represented by a Global Security, which it may do, it
will issue certificated Debt Securities for such series in definitive form in
exchange for the Global Security. In either instance, a Beneficial Owner will be
entitled to physical delivery of certificated Debt Securities for such series in
definitive form equal in principal amount to such Beneficial Owner's beneficial
interest in the Global Security and to have such certificated Debt Securities
for such series registered in such Beneficial Owner's name. Certificated Debt
Securities so issued in definitive form will be issued in denominations of
$1,000 and integral multiples thereof and will be issued in registered form
only, without coupons.
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Any other or differing terms of the depositary arrangement will be
described in the Prospectus Supplement relating to a series of Debt Securities.
REGARDING THE TRUSTEE
In the ordinary course of business, PNC Funding and PNC may maintain lines
of credit with one or more Trustees for a series of Debt Securities and the
Banks may maintain deposit accounts and conduct other banking transactions with
one or more Trustees for a series of Debt Securities.
TRUSTEE'S DUTY TO RESIGN UNDER CERTAIN CIRCUMSTANCES
PNC Funding may issue both Senior and Subordinated Debt Securities under
the Indenture. Because the Subordinated Debt Securities will rank junior in
right of payment to the Senior Debt Securities, the occurrence of a default
under the Indenture with respect to the Subordinated Debt Securities or any
Senior Debt Securities could create a conflicting interest under the Trust
Indenture Act of 1939, as amended ("1939 Act"), with respect to any Trustee who
serves as trustee for both Senior and Subordinated Debt Securities. In addition,
upon the occurrence of a default under the Indenture with respect to any series
of Debt Securities the Trustee of which maintains banking relationships with PNC
Funding or PNC, such Trustee would have a conflicting interest under the 1939
Act as a result of such business relationships. If a default has not been cured
or waived within 90 days after the Trustee has or acquires a conflicting
interest, the Trustee generally is required by the 1939 Act to eliminate such
conflicting interest or resign as Trustee with respect to the Subordinated Debt
Securities or the Senior Debt Securities. In the event of the Trustee's
resignation, PNC Funding and/or PNC shall promptly appoint a successor trustee
with respect to the affected securities.
DESCRIPTION OF COMMON STOCK
PNC is authorized to issue 450,000,000 shares of Common Stock. At June 30,
1997, there were 306,976,545 shares of Common Stock issued and outstanding and
40,407,600 shares held in treasury. For a description of authorized and issued
and outstanding shares of Preferred Stock of PNC, see "Description of Preferred
Stock--General."
Holders of Common Stock are entitled to one vote per share on all matters
submitted to shareholders. Holders of Common Stock have neither cumulative
voting rights nor any preemptive rights for the purchase of additional shares of
any class of stock of PNC, and are not subject to liability for further calls or
assessments. The Common Stock does not have any sinking fund, conversion or
redemption provisions.
Holders of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors of PNC out of funds legally available
therefor. The Board of Directors may not pay or set apart dividends on Common
Stock until dividends for all past dividend periods on any series of outstanding
preferred stock have been paid or declared and set apart for payment.
In the event of dissolution or winding up of the affairs of PNC, holders of
Common Stock will be entitled to share ratably in all assets remaining after
payments to all creditors and payments required to be made in respect of
outstanding preferred stock (including accrued and unpaid dividends thereon).
The Board of Directors of PNC may, except as otherwise required by
applicable law, cause the issuance of authorized shares of Common Stock without
shareholder approval to such persons and for such consideration as the Board of
Directors may determine in connection with acquisitions by PNC or for other
corporate purposes.
The Chase Manhattan Bank, New York, New York, is the transfer agent and
registrar for PNC's Common Stock. The shares of Common Stock are listed on the
New York Stock Exchange under the symbol "PNC". The outstanding shares of Common
Stock are, and the shares offered hereby will be, validly issued, fully paid and
nonassessable and the holders thereof are not and will not be subject to any
liability as shareholders.
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DESCRIPTION OF PREFERRED STOCK
GENERAL
The Board of Directors of PNC (the "PNC Board") is authorized without
further shareholder action to cause the issuance, as of June 30, 1997, of up to
10,662,800 additional shares of Preferred Stock, and such Preferred Stock may be
issued in one or more series, each with such preferences, limitations,
designations, conversion rights, voting rights, dividend rights, voluntary and
involuntary liquidation rights and other rights as the PNC Board may determine
at the time of issuance.
Under such authority, PNC has previously designated six series of preferred
stock, of which, at June 30, 1997, five series were outstanding, including:
16,048 shares of $1.80 Cumulative Convertible Preferred Stock, Series A
("Preferred Stock-A"); 4,452 shares of $1.80 Cumulative Convertible Preferred
Stock, Series B ("Preferred Stock-B"); 319,865 shares of $1.60 Cumulative
Convertible Preferred Stock, Series C ("Preferred Stock-C"); 432,310 shares of
$1.80 Cumulative Convertible Preferred Stock, Series D ("Preferred Stock-D");
and 6,000,000 shares of Fixed/Adjustable Rate Noncumulative Preferred Stock,
Series F ("Preferred Stock-F"). All shares of a former series of Preferred
Stock, designated as $2.60 Cumulative NonVoting Preferred Stock, Series E, have
been redeemed and restored to the status of authorized but unissued Preferred
Stock. See "Description of Preferred Stock--Preferred Stock Currently
Outstanding" below.
The rights of the holders of PNC's Common Stock are subject to any rights
and preferences of such outstanding series of Preferred Stock, and the Preferred
Stock herein offered, and would be subject to the rights and preferences of any
additional shares of Preferred Stock, or any series thereof, which might be
issued in the future.
The existence of authorized but unissued Preferred Stock could have the
effect of discouraging an attempt to acquire control of PNC. For example,
Preferred Stock could be issued to persons, firms or entities known to be
friendly to management.
PREFERRED STOCK OFFERED HEREIN
General
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. The particular terms of any series of
Preferred Stock offered by any Prospectus Supplement and the extent, if any, to
which such general provisions may apply to the Preferred Stock so offered will
be described in the Prospectus Supplement relating to such Preferred Stock. If
so specified in the applicable Prospectus Supplement, the terms of any series of
Preferred Stock may differ from the terms set forth below. The description below
and in any Prospectus Supplement does not purport to be complete and is subject
to and qualified in its entirety by reference to the Designation of Series
relating to the Preferred Stock the form of which is incorporated by reference
as Exhibit 4.4 to the Registration Statement of which this Prospectus is a part
and the definitive form of which will be filed with the Commission.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the applicable Prospectus Supplement, the shares
of each series of Preferred Stock will upon issuance rank on a parity in all
respects with PNC's existing series of Preferred Stock, described below, and
each other then outstanding series of preferred stock of PNC. Holders of the
Preferred Stock will have no preemptive rights to subscribe for any additional
securities which may be issued by PNC. Unless otherwise specified in the
applicable Prospectus Supplement, The Chase Manhattan Bank, New York, New York,
will be the transfer agent and registrar for the Preferred Stock.
Because PNC is a holding company, its rights and the rights of holders of
its securities, including the holders of Preferred Stock, to participate in the
assets of any PNC subsidiary upon the latter's liquidation or recapitalization
will be subject to the prior claims of such subsidiary's creditors and preferred
shareholders,
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except to the extent PNC may itself be a creditor with recognized claims against
such subsidiary or a holder of preferred shares of such subsidiary. See
"Supervision, Regulation and Other Matters"
PNC may, at its option, elect to offer Depositary Shares ("Depositary
Shares") evidenced by depositary receipts ("Depositary Receipts"), each
representing a fractional interest (to be specified in the Prospectus Supplement
relating to the particular series of Preferred Stock) in a share of a particular
series of the Preferred Stock issued and deposited with a Depositary (as defined
below). See "Description of Depositary Shares" below.
Dividends
The holders of the Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors of PNC or a duly authorized committee
thereof, out of funds legally available therefor, dividends at such rates and on
such dates as will be specified in the applicable Prospectus Supplement. Such
rates may be fixed or variable or both. If variable, the formula used for
determining the dividend rate for each dividend period will be specified in the
applicable Prospectus Supplement. Dividends will be payable to the holders of
record as they appear on the stock books of PNC on such record dates as will be
fixed by the Board of Directors of PNC or a duly authorized committee thereof.
Dividends may be paid in the form of cash, Preferred Stock (of the same or a
different series) or Common Stock of PNC, in each case as specified in the
applicable Prospectus Supplement.
Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as specified in the applicable Prospectus Supplement. If the
Board of Directors of PNC fails to declare a dividend payable on a dividend
payment date on any Preferred Stock for which dividends are noncumulative
("Noncumulative Preferred Stock"), then the holders of such Preferred Stock will
have no right to receive a dividend in respect of the dividend period relating
to such dividend payment date, and PNC will have no obligation to pay the
dividend accrued for such period, whether or not dividends on such Preferred
Stock are declared or paid on any future dividend payment dates.
If dividends on a particular series shall have been determined 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 PNC ranking as to
dividends subordinate to such series (other than dividends payable in Common
Stock or in any class or series of stock of PNC 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 PNC 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.
Voting
Except as provided herein or in the applicable Prospectus Supplement, or as
required by applicable law, the holders of Preferred Stock have only such voting
rights with regard to matters submitted to a vote of the shareholders of PNC as
shall be fixed and determined by PNC's Board of Directors. Except as otherwise
required by law or provided by the Board of Directors and described in the
applicable Prospectus Supplement, holders of Preferred Stock having voting
rights and holders of Common Stock vote together as one class. Holders of
Preferred Stock do not have cumulative voting rights.
If PNC 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 PNC shall be increased by
two at the first annual meeting of the shareholders of PNC 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
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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 PNC 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.
PNC shall not, without the affirmative vote at a meeting, or 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.
Subject to such affirmative vote or consent of the holders of the
outstanding shares of Preferred Stock of any series, PNC may, by resolution of
its Board of Directors or as otherwise permitted by law, from time to time alter
or change the preferences, rights or powers of the Preferred Stock of such
series. The holders of the Preferred Stock of such series shall not be entitled
to participate in any such vote if, at or prior to the time when any such
alteration or change is to take effect, provision is made for the redemption of
all the Preferred Stock of such series at the time outstanding. See "Redemption
by PNC" below. Nothing in this section shall be taken to require a class vote or
consent in connection with the authorization, designation, increase or issuance
of any shares of any class or series (including additional Preferred Stock of
any series) that rank junior to or on a parity with the Preferred Stock of such
series as to dividends and liquidation rights or in connection with the
authorization, designation, increase or issuance of any bonds, mortgages,
debentures or other obligations of PNC.
Under interpretations adopted by the Federal Reserve or its staff, if the
holders of Preferred Stock of any series become entitled to vote for the
election of directors because dividends on such series are in arrears as
described above, such series may then be deemed a "class of voting securities"
and a holder of 25% or more of such series (or a holder of 5% or more if it
otherwise exercises a "controlling influence" over PNC) may then be subject to
regulation as a bank holding company in accordance with the BHC Act. In
addition, at such time as such series is deemed a class of voting securities,
any other bank holding company may be required to obtain the prior approval of
the Federal Reserve to acquire more than 5% of such series, and any person other
than a bank holding company may be required to obtain the prior approval of the
Federal Reserve to acquire 10% or more of such series.
Liquidation of PNC
In the event of voluntary or involuntary liquidation of PNC, the holders of
shares of each series of Preferred Stock shall be entitled to receive from the
assets of PNC (whether capital or surplus), prior to any payment to the holders
of Common Stock or of any class or series of stock of PNC ranking as to assets
subordinate to such series, the amount fixed by the Board of Directors for such
series and described in the applicable Prospectus Supplement, plus, in case
dividends on such series shall have been determined 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 PNC ranking as to assets subordinate to such series,
as they may be entitled. If, upon liquidation of PNC, 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
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respectively entitled. Neither a merger nor a consolidation of PNC into or with
any other corporation nor a sale, transfer or lease of all or part of the assets
of PNC shall be deemed a liquidation of PNC within the meaning of this
paragraph.
Redemption by PNC
Except as otherwise provided by the Board of Directors and described in the
applicable Prospectus Supplement, PNC, 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, plus, in case dividends shall have
been determined 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 redemption shall be published at least once in a newspaper of
general circulation in Philadelphia, Pennsylvania, or in the Borough of
Manhattan, New York, and copies of such notice shall be given by mailing the
same to each record holder of the Preferred Stock to be redeemed, not less than
30 nor more than 60 days prior to the date fixed for redemption thereof, to the
respective addresses of such holders as the same shall appear on the stock books
of PNC. Each notice shall state: (i) the redemption date; (ii) the number of
shares and series of the Preferred Stock to be redeemed; (iii) the redemption
price; and (iv) the place or places where certificates for such Preferred Stock
are to be surrendered for payment of the redemption price. If fewer than all the
shares of Preferred Stock of any series held by any holder are to be redeemed,
the notice mailed to such holder shall also specify the number of shares of
Preferred Stock to be redeemed from such holder.
If notice of redemption of any share of Preferred Stock has been given,
from and after the redemption date for such shares (unless default shall be made
by PNC in providing money for the payment of the redemption price of such
shares), dividends on such shares shall cease to accrue and such shares shall no
longer be deemed to be outstanding, and all rights of the holders thereof as
shareholders of PNC (except the right to receive the redemption price) shall
cease. Failure to give 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. 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. Upon surrender in accordance
with such notice of the certificates representing any such shares (properly
endorsed or assigned for transfer, if the Board of Directors of PNC shall so
require and the notice shall so state), the redemption price set forth above
shall be paid out of the funds provided by PNC. If fewer than all the shares
represented by any such certificate are redeemed, a new certificate representing
the unredeemed shares shall be issued without cost to the holder thereof.
Except as otherwise provided by the Board of Directors and described in the
applicable Prospectus Supplement, PNC shall have the right to acquire Preferred
Stock from time to time at such price or prices as PNC 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, PNC 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.
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Conversion
The holders of any series of Preferred Stock will have such rights, if any,
to convert such shares into or to exchange such shares for, cash, shares of
PNC's Common Stock or any other class of capital securities of PNC as may be set
forth in the Prospectus Supplement relating to such series of Preferred Stock.
PREFERRED STOCK CURRENTLY OUTSTANDING
The following summaries of the outstanding Preferred Stock are qualified in
their entirety by reference to the corresponding Designations of Series and
description of Preferred Stock contained in PNC's Articles of Incorporation, as
amended, attached as Exhibits 99.1 and 99.2 (with respect to the Preferred
Stock-F) to PNC's Current Report on Form 8-K dated October 7, 1996 and PNC's
application for registration of securities on Form 8-A filed September 24, 1987
(File No. 1-9718) and incorporated herein by reference.
Holders of outstanding Preferred Stock are entitled to cumulative dividends
at the annual rate of $1.80 per share for Preferred Stock-A, Preferred Stock-B
and Preferred Stock-D and $1.60 per share for Preferred Stock-C, payable
quarterly when and as declared by the Board of Directors of PNC. The Board of
Directors may not pay or set apart dividends on Common Stock until dividends for
the current period and all past dividend periods on all series of outstanding
Preferred Stock have been paid or declared and set apart for payment. Dividends
on Preferred Stock-F are payable quarterly at a rate per share of 6.05% per
annum through September 29, 2001, and thereafter at the "Applicable Rate" (as
defined in the Designation of Series relating to the Preferred Stock-F), which
rate will not be less than 6.55% nor greater than 12.55% (unless there are
certain changes made to the Internal Revenue Code). Dividends on the Preferred
Stock-F are not cumulative and no rights accrue to the holders by reason of the
fact that PNC may fail to declare or pay dividends on the Preferred Stock-F in
any amount in any year.
Holders of outstanding Preferred Stock, other than Preferred Stock-F, are
entitled to a number of votes equal to the number of full shares of Common Stock
into which their Preferred Stock is at the time convertible. Holders of
outstanding Preferred Stock currently are entitled to the following conversion
privileges: (i) one share of Preferred Stock-A or Preferred Stock-B is
convertible into eight shares of Common Stock and (ii) 2.4 shares of Preferred
Stock-C or Preferred Stock-D are convertible into four shares of Common Stock.
Shares of Preferred Stock-F do not have voting rights, except in limited
circumstances.
On the liquidation of PNC, holders of outstanding Preferred Stock would be
entitled to receive, before any payments are made with respect to Common Stock,
a specified amount for each share held by them, plus all dividends accrued and
unpaid thereon, or such lesser amount remaining after the claims of all
creditors have been satisfied, ratably with holders of other series of Preferred
Stock ranking equally as to assets. The liquidation preference is $40 per share
for Preferred Stock-A and Preferred Stock-B, $20 per share for Preferred Stock-C
and Preferred Stock-D and $50 per share for Preferred Stock-F.
Preferred Stock-A, Preferred Stock-C and Preferred Stock-D are redeemable
at any time at the option of PNC at redemption prices equal to the respective
liquidation preference amounts stated above, plus accrued and unpaid dividends,
if any. Preferred Stock-B is not redeemable. Prior to September 30, 2001,
Preferred Stock-F is not redeemable, except in limited circumstances by PNC upon
certain changes to the Internal Revenue Code at a declining redemption price
ranging from $52.20 to the liquidation preference amount, plus accrued and
unpaid dividends (whether or not earned or declared) from the immediately
preceding dividend payment date (but without any cumulation for unpaid dividends
for prior dividend periods) to the date fixed for redemption. On and after
September 30, 2001, Preferred Stock-F is redeemable at the option of PNC at its
liquidation preference amount, plus accrued and unpaid dividends (whether or not
earned or declared) from the immediately preceding dividend payment date (but
without any cumulation for unpaid dividends for prior dividend periods) to the
date fixed for redemption.
All outstanding series of Preferred Stock, other than Preferred Stock-F,
are convertible (unless called for redemption and not converted within the time
allowed therefor), at any time at the option of the holder. No adjustment will
be made for dividends on Preferred Stock converted or on Common Stock issuable
upon conversion. The conversion rate of each series of convertible Preferred
Stock will be adjusted in certain events,
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including payment of stock dividends on, or splits or combinations of, the
Common Stock or issuance to holders of Common Stock of rights to purchase Common
Stock at a price per share less than 90% of Current Market Price as defined in
the Articles of Incorporation of PNC. Appropriate adjustments in the conversion
provisions also will be made in the event of certain reclassifications,
consolidations or mergers or the sale of substantially all of the assets of PNC.
Preferred Stock-F is not convertible into shares of Common Stock or any other
security of PNC.
PNC shall have the right to acquire outstanding Preferred Stock from time
to time at such price or prices as PNC 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, PNC
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.
Preferred Stock-A, Preferred Stock-B and Preferred Stock-F are currently
traded in the over-the-counter market. Preferred Stock-C and -D are listed and
traded on the New York Stock Exchange. The Chase Manhattan Bank, New York, New
York, is transfer agent and registrar for all outstanding series of Preferred
Stock.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
Certain general terms and provisions of the Deposit Agreement (as described
below), the Depositary Shares and the Depositary Receipts to which a Prospectus
Supplement may relate are set forth below. The particular terms of the Preferred
Stock offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Depositary Shares will be described in the
Prospectus Supplement relating to such Preferred Stock. The descriptions below
and in any Prospectus Supplement do not purport to be complete and are subject
to and qualified in their entirety by reference to the Deposit Agreement and the
Depositary Receipts, the forms of which are incorporated by reference as
Exhibits 4.5 and 4.6, respectively, to the Registration Statement of which this
Prospectus is a part and the definitive forms of which will be filed with the
Commission.
PNC may, at its option, elect to offer fractional interests in the
Preferred Stock, rather than whole shares of such securities. In the event such
option is exercised, PNC will provide for the issuance by a Depositary to the
public of receipts for Depositary Shares, each of which will represent a
fractional interest (to be set forth in the Prospectus Supplement relating to a
particular series of the Preferred Stock) in a share of a particular series of
the Preferred Stock as described below.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement ("Deposit
Agreement") between PNC and a bank or trust company selected by PNC having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000 ("Depositary"). The Prospectus Supplement relating to a
series of Depositary Shares will set forth the name and address of the
Depositary, which may be one of the Banks. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fractional interest in a share of Preferred Stock underlying such
Depositary Share, to all the rights and preferences of the Preferred Stock
underlying such Depositary Share (including dividend, voting, redemption,
conversion and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Depositary Receipts will be distributed to
those persons purchasing the fractional shares of the related series of
Preferred Stock in accordance with the terms of the offering described in a
related Prospectus Supplement.
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Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of PNC, issue temporary Depositary
Receipts substantially identical to (and entitling the holders thereof to all
the rights pertaining to) the definitive Depositary Receipts but not in
definitive form. Definitive Depositary Receipts will be prepared thereafter
without unreasonable delay and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at PNC's expense.
Upon surrender of Depositary Receipts at the office of the Depositary
(unless the Depositary Shares have been previously called for redemption) and
upon payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Shares is entitled to have the Depositary
deliver to such holder the number of whole shares of the related Preferred Stock
underlying the Depositary Shares evidenced by the surrendered Depositary
Receipts. Partial shares of Preferred Stock will not be issued. Holders of
Depositary Shares will be entitled to receive shares of the related series of
Preferred Stock as set forth in a related Prospectus Supplement, but holders of
such whole shares of such Preferred Stock thus withdrawn will not thereafter be
entitled to receive Depositary Shares therefor. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole shares of the
related series of Preferred Stock to be withdrawn, the Depositary will deliver
to such holder at the same time a new Depositary Receipt evidencing such excess
number of Depositary Shares. PNC does not expect that there will be any public
trading market for the withdrawn shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
PNC, sell such property and distribute the net proceeds from such sale to such
holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever PNC redeems Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the number
of Depositary Shares relating to the shares of Preferred Stock so redeemed. If
less than all the Depositary Shares are to be redeemed, the Depositary Shares to
be redeemed will be selected by lot or pro rata as may be determined by the
Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holder of the Depositary Shares will cease, except the right to receive the
monies payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
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VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of Preferred Stock underlying such
holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the amount of Preferred Stock underlying such Depositary
Shares in accordance with such instructions, and PNC will agree to take all
action which may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary will abstain from voting Preferred Stock to
the extent it does not receive specific instructions from the holders of
Depositary Shares relating to such Preferred Stock.
CONVERSION OF PREFERRED STOCK
If a series of the Preferred Stock underlying the Depositary Shares is
convertible into shares of PNC's Common Stock or any other class of capital
securities of PNC, PNC will accept the delivery of Depositary Receipts for
purposes of effecting conversions of the Preferred Stock utilizing the same
procedures as those provided for delivery of certificates for the Preferred
Stock pursuant to the terms of the series of Preferred Stock. If the Depositary
Shares represented by a Depositary Receipt are to be converted in part only, a
new Depositary Receipt or Depositary Receipts will be issued by the Depositary
for the Depositary Shares not to be converted.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between PNC and the Depositary. However, any amendment which materially and
adversely alters the rights of the existing holders of Depositary Shares will
not be effective unless such amendment has been approved by the record holders
of at least a majority of the Depositary Shares then outstanding. A Deposit
Agreement may be terminated by PNC or the Depositary only if (i) all outstanding
Depositary Shares relating thereto have been redeemed or (ii) there has been a
final distribution in respect of the Preferred Stock of the relevant series in
connection with any liquidation, dissolution or winding up of PNC.
CHARGES OF DEPOSITARY
PNC will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. PNC will also pay
charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from PNC which are delivered to the Depositary and which PNC
is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor PNC will be liable if it is prevented or delayed
by law or any circumstance beyond its control in performing its obligations
under the Deposit Agreement. The obligations of PNC and the Depositary under the
Deposit Agreement will be limited to performance in good faith of their
respective duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or shares of
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Shares or other
persons believed to be competent and on documents believed to be genuine.
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RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to PNC notice of its
election to do so, and PNC may at any time remove the Depositary, any such
resignation or removal to take effect only upon the appointment of a successor
Depositary and its acceptance of such appointment. Such successor Depositary
must be a bank or trust company having its principal office in the United States
and having a combined capital and surplus of at least $50,000,000.
PLAN OF DISTRIBUTION
PNC Funding may offer and sell Debt Securities to or through underwriters,
acting as principals for their own accounts or as agents, and also may offer and
sell Debt Securities directly to other purchasers. PNC may offer and sell Common
Stock and Preferred Stock to or through underwriters, acting as principals for
their own accounts or as agents, and also may offer and sell Common Stock and
Preferred Stock directly to other purchasers. Any underwriters in connection
with Offered Debt Securities, Common Stock or Preferred Stock will be named in
the related Prospectus Supplement and any underwriting compensation paid to such
underwriters will be set forth therein. Underwritten offerings may involve
underwriting syndicates represented by managing underwriters, or underwriters
without a syndicate.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
In connection with the sale of Securities, underwriters or agents acting on
PNC's behalf may receive compensation from PNC Funding, PNC or from purchasers
of Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers or agents that participate
in the distribution of Securities may be deemed to be underwriters and any
discounts or commissions received by them and any profit on the resale of
Securities by them may be deemed to be underwriting discounts and commissions
under the Securities Act. Any such underwriter will be identified and any such
compensation will be described in the Prospectus Supplement.
Under agreements which may be entered into with PNC Funding and PNC,
underwriters, dealers and agents may be entitled to indemnification by PNC
Funding or PNC against certain liabilities, including liabilities under the
Securities Act, and to contributions from PNC Funding or PNC in respect of such
liabilities. Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for PNC Funding or PNC in the ordinary
course of business.
If so indicated in the Prospectus Supplement, PNC Funding and/or PNC will
authorize underwriters or other persons acting as PNC Funding's agents and/or
PNC's agents to solicit offers by certain institutions to purchase Debt
Securities from PNC Funding and/or Preferred Stock from PNC pursuant to
contracts providing for payment and delivery on a future date or dates stated in
the applicable Prospectus Supplement. Institutions with which such contracts may
be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and others,
but in all cases such institutions must be approved by PNC Funding or PNC. The
obligations of any purchaser under any such contract will not be subject to any
conditions, except that (1) the purchase of the Debt Securities, or the Common
Stock or the Preferred Stock shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject, and (2)
if Debt Securities or Common Stock or Preferred Stock are also being sold to
underwriters, PNC Funding or PNC shall have sold to such underwriters the Debt
Securities or the Common Stock or the Preferred Stock not sold for delayed
delivery. The underwriters and such other persons will not have any
responsibility in respect of the validity or performance of such contracts.
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LEGAL OPINIONS
The validity of the Securities and related Guarantees and the Common Stock,
the Preferred Stock and the Depositary Shares will be passed upon for PNC
Funding and PNC by Melanie S. Cibik, Senior Counsel of PNC, One PNC Plaza, 249
Fifth Avenue, Pittsburgh, Pennsylvania 15222. As of June 30, 1997, Miss Cibik
beneficially owned 908 shares of PNC's Common Stock under PNC's employee plans.
If the Securities are being distributed in an underwritten offering, the
validity of the Securities and related Guarantees and the Common Stock, the
Preferred Stock and the Depositary Shares will be passed upon for the
underwriters by counsel identified in the Prospectus Supplement.
EXPERTS
The consolidated financial statements of PNC incorporated by reference into
the Annual Report on Form 10-K of PNC for the year ended December 31, 1996, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference therein and herein. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
Documents incorporated herein by reference in the future will include
financial statements, related schedules (if required) and auditors' reports,
which financial statements and schedules will have been audited to the extent
and for the periods set forth in such reports by the firm or firms rendering
such reports, and, to the extent so audited and consent to incorporation by
reference is given, will be incorporated herein by reference in reliance upon
such reports given upon the authority of such firms as experts in accounting and
auditing.
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PNC Funding Corp
$300,000,000 6.95% Notes Due 2002
$300,000,000 7.00% Notes Due 2004
Unconditionally Guaranteed by
PNC Bank Corp.
pnc bank logo
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PROSPECTUS SUPPLEMENT
AUGUST 27, 1999
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SALOMON SMITH BARNEY
PNC CAPITAL MARKETS, INC.
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