<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 1, 1995)
$300,000,000
[LOGO]
NORWEST CORPORATION
RETAIL MEDIUM-TERM NOTESM SECURITIES
SUBORDINATED RETAIL MEDIUM-TERM NOTES, SERIES I
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
Norwest Corporation (the "Company") may offer from time to time up to
$300,000,000 aggregate initial public offering price of Retail Medium-Term
NoteSM securities (the "Notes" or the "Retail Medium-Term Notes"), as a class of
its debt securities entitled the Subordinated Retail Medium-Term Notes, Series I
Due Nine Months or More From Date of Issue, subject to reduction as a result of
the sale of other Debt Securities (as defined in the accompanying Prospectus).
Each Note will mature on any day nine months or more from its date of issue, as
agreed to by the Company and the purchaser. The payment of the principal of and
interest on the Notes will, to the extent set forth in the Indenture (as
hereinafter defined), be subordinate and junior in right of payment to the prior
payment in full of all Senior Debt (as defined in the Indenture). The Company's
obligations under the Notes shall rank PARI PASSU in right of payment with other
Subordinated Securities and with obligations of the Company ranking on parity
with the Notes (see "Description of Debt Securities -- General" and "--
Subordination" in the Prospectus). Payment of principal on the Notes may be
accelerated only in case of certain events of bankruptcy of the Company. There
is no right of acceleration of the payment of principal of the Notes upon a
default in the payment of principal of or interest on such Notes or in the
performance of any covenant of the Company contained in the Indenture (see
"Description of Debt Securities -- Events of Default" in the Prospectus). Unless
otherwise specified in the applicable Pricing Supplement, the Notes will be
issued in denominations of $1,000 and integral multiples of $1,000 in excess
thereof (see "Description of Retail Medium-Term Notes -- General" in this
Prospectus Supplement).
Unless otherwise specified in the applicable Pricing Supplement, interest on
the Notes will be payable on the 15th day of each month and at Maturity.
(CONTINUED ON NEXT PAGE)
-------------------
THE NOTES ARE UNSECURED OBLIGATIONS OF THE COMPANY AND ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE
COMPANY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER
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 SUPPLEMENT, ANY PRICING
SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
AGENTS'
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note................................................ 100% .20%-3.00% 99.80%-97.00%
Total................................................... $300,000,000 $600,000-$9,000,000 $299,400,000-$291,000,000
<FN>
(1) Unless otherwise specified in a Pricing Supplement, Notes will be issued at
100% of their principal amount.
(2) The Company will pay Smith Barney Inc. as agent (the "Agent"), a commission
(or grant a discount) ranging from .20% to 3.00% of the principal amount of
any Note, depending upon its Stated Maturity, sold through the Agent (or
sold to the Agent as principal in circumstances in which no other discount
is agreed). The Company may also sell the Notes to the Agent, as principal,
for resale to one or more investors and other purchasers at varying prices
relating to prevailing market prices at the time of resale, as determined
by the Agent, or if, so agreed, at a fixed public offering price. The
Company has agreed to indemnify the Agents against certain liabilities,
including liabilities under the Securities Act of 1933, as amended. See
"Plan of Distribution of Retail Medium-Term Notes".
(3) Before deducting estimated expenses of $200,000, payable by the Company.
</TABLE>
-------------------
SMITH BARNEY INC.
------------
October 4, 1995 SM Servicemark of Smith Barney Inc.
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
The interest rate for each Note will be established by the Company at the
time of issuance of such Note (the "Original Issue Date") and will be set forth
therein and specified in a Pricing Supplement. Interest rates are subject to
change by the Company, but no change will affect any Note already issued or as
to which an offer to purchase has been accepted by the Company. Unless otherwise
indicated in the applicable Pricing Supplement, each Note will bear interest at
a fixed rate. See "Description of Retail Medium-Term Notes" in this Prospectus
Supplement and "Description of Debt Securities" in the Prospectus.
The Notes will be issued in fully registered form and will be represented by
a global security registered in the name of a nominee of The Depository Trust
Company (the "Depositary"). Beneficial interests in Notes in book-entry form
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary. Except as described in "Description of Retail
Medium-Term Notes -- Book-Entry Notes" in this Prospectus Supplement, owners of
beneficial interests in Notes issued in book-entry form will not be entitled to
physical delivery of Notes in certificated form and will not be considered the
holders thereof.
In addition to the offering of the Notes made hereby, the Company may offer
other series of its Medium-Term Notes and other Debt Securities, and the sale of
such Medium-Term Notes or other Debt Securities may reduce the amount of Notes
that may be sold hereunder.
The Notes are being offered on a continuous basis by the Company through the
Agent. The Company may also sell Notes directly to investors and other
purchasers on its own behalf in those jurisdictions where it is authorized to do
so. The Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes offered by this Prospectus Supplement will be sold or
that there will be a secondary market for the Notes. The Company reserves the
right to withdraw, cancel or modify any offer to sell Notes without notice and
may reject orders in whole or in part whether placed directly with the Company
or through the Agent. The Agent will have the right, in its discretion
reasonably exercised, to reject, in whole or in part, any offer to purchase
Notes received by it on an agency basis. See "Plan of Distribution of Retail
Medium-Term Notes" in this Prospectus Supplement. The Agent, whether acting as
agent or principal, may be deemed to be an "underwriter" within the meaning of
the Securities Act of 1933, as amended (the "Securities Act").
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENT MAY OVER-ALLOT
OR EFFECT TRANSACTIONS IN THE NOTES WITH A VIEW TO STABILIZING OR MAINTAINING
THE MARKET PRICE OF THE NOTES AT LEVELS OTHER THAN THOSE WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN ANY
OVER-THE-COUNTER MARKET OR OTHERWISE AND, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
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<PAGE>
DESCRIPTION OF RETAIL MEDIUM-TERM NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES OFFERED
HEREBY SUPPLEMENTS, AND TO THE EXTENT INCONSISTENT THEREWITH REPLACES, THE
DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES (DEFINED
IN THE PROSPECTUS) SET FORTH IN THE ACCOMPANYING PROSPECTUS, TO WHICH
DESCRIPTION REFERENCE IS HEREBY MADE. UNLESS DIFFERENT TERMS OR ADDITIONAL TERMS
ARE SPECIFIED IN THE APPLICABLE PRICING SUPPLEMENT, THE NOTES WILL HAVE THE
TERMS DESCRIBED BELOW. CERTAIN TERMS NOT DEFINED IN THIS PROSPECTUS SUPPLEMENT
ARE DEFINED IN THE PROSPECTUS.
GENERAL
The Notes will be issued pursuant to the Indenture dated as of September 15,
1995 between the Company and Citibank, N.A. (such Indenture, as supplemented
from time to time, being herein called the "Indenture"). The Notes will
represent subordinated debt of the Company and will rank equally with all other
unsecured and subordinated debt of the Company. The Notes constitute a single
series of Debt Securities for purposes of the Indenture. The Notes are limited
to an aggregate initial offering price of $300,000,000 subject to reduction as a
result of the sale of other Debt Securities (as defined in the accompanying
Prospectus). The following summary of certain provisions of the Indenture does
not purport to be complete and is subject to and is qualified in its entirety by
reference to, all of the provisions of the Indenture, including the definitions
therein of certain terms.
The Indenture does not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provides that Debt Securities may
be issued in one or more series up to the aggregate principal amount that may be
authorized from time to time by the Company. Debt Securities of any series need
not all be issued at the same time. The Company may concurrently offer other
series of its Medium-Term Notes having different interest rates and variable
terms and such offers may depend upon the aggregate principal amount subject to
purchase in any single transaction.
Indebtedness of the Company senior to the Notes, at June 30, 1995, totaled
approximately $6.0 billion. The Indenture does not limit or prohibit the
incurrence of additional Senior Debt. See "Description of Debt Securities --
Subordination" in the Prospectus.
Payment of principal on the Notes may be accelerated only in case of certain
events of bankruptcy of the Company. There is no right of acceleration of the
payment of principal of the Notes upon a default in the payment of principal of
or interest on such Notes or in the performance of any covenant of the Company
contained in the Indenture. See "Description of Debt Securities -- Events of
Default" in the Prospectus.
The Notes will be offered on a continuous basis and will mature on any day
nine months or more from its date of issue, as agreed to by the Company and the
purchaser and specified in the Note and the applicable Pricing Supplement. If
the Maturity specified in the applicable Pricing Supplement for any Note is on a
day that is not a Market Day, principal, premium (if any) and interest (if any)
will be paid on the next succeeding Market Day with the same force and effect as
if made on the date such payment was due. "Market Day" means any day that is not
a Saturday or Sunday and that is not a day on which banking institutions
generally are authorized or obligated by law or executive order to close in the
City of Minneapolis, Minnesota or The City of New York.
The applicable Pricing Supplement will specify any redemption or repayment
terms applicable to the Notes. See "Redemption" and "Repayment" below.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be issuable only in definitive registered form in denominations of $1,000
and integral multiples of $1,000 in excess thereof.
Each Note will be represented either by a global security (a "Global
Security") registered in the name of a nominee of The Depository Trust Company,
as depositary (the "Depositary") (each such Note represented by a Global
Security being herein referred to as a "Book-Entry Note"), or by a certificate
issued in definitive registered form, without coupons (a "Certificated Note"),
as set forth in the applicable Pricing Supplement. Except as set forth under
"Book-Entry Notes" below, Book-Entry Notes will not be issuable in certificated
form. So long as the Depositary or its nominee is the registered holder of any
Global Security, the Depositary or its nominee, as the case may be, will be
considered the sole registered holder of the Book-Entry Notes represented by
such Global Security for all purposes under the Indenture and such Notes. For a
further
S-3
<PAGE>
description of the respective forms, denominations and transfer and exchange
procedures with respect to any such Global Security and Book-Entry Note,
reference is made to "Book-Entry Notes" below and to the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement and except
as provided below under "Book-Entry Notes", principal, premium (if any) and
interest (if any) will be payable, the transfer of any Notes will be registrable
and any Notes will be exchangeable for Notes bearing identical terms and
provisions at the corporate trust office of Citibank, N.A., the Trustee under
the Indenture with regard to the Notes (the "Trustee"), in The City of New York
or at the corporate trust office of Norwest Bank Minnesota, National Association
(the "Paying Agent"), in the City of Minneapolis, Minnesota, provided that
payments of interest on any Interest Payment Date (as defined below) with
respect to any Certificated Note may be made at the option of the Company 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 Regular Record Date (as
defined below) corresponding to the relevant Interest Payment Date. Unless
otherwise specified in the applicable Pricing Supplement, holders of $10,000,000
or more in aggregate principal amount of Certificated Notes shall be entitled to
receive payments of interest on any Interest Payment Date by wire transfer of
immediately available funds, if appropriate wire transfer instructions have been
given to the Paying Agent in writing not later than the Regular Record Date
preceding such Interest Payment Date.
Unless otherwise specified in the applicable Pricing Supplement, the
principal, premium (if any) and interest (if any) payable at Maturity on each
Certificated Note will be paid in immediately available funds against
presentation of the Note at the above mentioned corporate trust office of the
Trustee or the Paying Agent.
Notes may be issued as Original Issue Discount Notes. An Original Issue
Discount Note is a Note which is issued at a price lower than the principal
amount thereof and which provides that upon redemption or acceleration of the
Stated Maturity thereof, an amount less than the principal thereof shall become
due and payable. In the event of redemption or acceleration of the Stated
Maturity of an Original Issue Discount Note, the amount payable to the Holder of
such Note upon such redemption or acceleration will be determined in accordance
with the terms of the applicable Pricing Supplement, but will be an amount less
than the amount payable at the Stated Maturity of such Note. Original Issue
Discount Notes, as well as certain other Notes offered hereby, may, for United
States federal income tax purposes, be "Discount Notes". See "United States
Taxation--United States Holders--Original Issue Discount".
The Notes are subject to defeasance upon the satisfaction of certain
conditions, as provided in the Indenture. See "Description of Debt
Securities--Defeasance and Discharge" in the Prospectus.
INTEREST AND INTEREST RATES
Unless otherwise indicated in a Pricing Supplement, each Note will bear
interest at a fixed rate (the "Fixed Rate Notes"). If any Notes are issued at a
floating rate (the "Floating Rate Notes"), or any combination of fixed and
floating rates, such rate or combination of rates will be set forth in the
applicable Pricing Supplement.
Each Note that bears interest will bear interest from and including its date
of issue at a rate per annum applicable to the related Interest Period or
Interest Periods, until the principal thereof is paid or made available for
payment. Interest will be payable on each Interest Payment Date and at Maturity.
Except as provided below under "Book Entry Notes", interest will be payable to
the person in whose name a Note (or any predecessor Note) is registered at the
close of business on the Regular Record Date (as defined below) next preceding
each Interest Payment Date; provided, however, that interest payable at Maturity
will be payable to the person to whom principal shall be payable. Except as
provided below under "Book Entry Notes", the first payment of interest on any
Note originally issued after a Regular Record Date and on or before the
corresponding Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date to the registered holder
thereof on such next succeeding Regular Record Date. Interest rates are subject
to change by the Company from time to time but no such change will affect any
Note theretofore issued or which the Company has agreed to issue.
S-4
<PAGE>
The interest rate on a Note for any Interest Period will in no event be
higher than the maximum rate permitted by New York law, as the same may be
modified by United States law of general application. Under current New York
law, the maximum rate of interest is 25% per annum on a simple interest basis,
with certain exceptions.
The applicable Pricing Supplement will specify with respect to each Note
that bears interest: (i) the issue price, Interest Payment Dates and Regular
Record Dates; (ii) the interest rate; (iii) whether such Note is an Original
Issue Discount Note; and (iv) any other terms not inconsistent with the
Indenture.
Each Fixed Rate Note, whether or not issued as an Original Issue Discount
Note, will bear interest at the annual rate specified therein and in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Payment Dates for the Fixed Rate Notes will be
on the 15th day of each month and the Regular Record Dates for the Fixed Rate
Notes will be the day (whether or not a Market Day) fifteen calendar days
preceding each Interest Payment Date. Unless otherwise specified in the
applicable Pricing Supplement, interest payments for Fixed Rate Notes shall be
the amount of interest accrued from, and including, the next preceding Interest
Payment Date to which interest has been paid or duly provided for (or from, and
including, the date of issue if no interest has been paid or duly provided for
with respect to such Fixed Rate Note) to, but excluding, the relevant Interest
Payment Date. Unless otherwise specified in the applicable Pricing Supplement,
interest on Fixed Rate Notes will be computed and paid on the basis of a 360-day
year of twelve 30-day months. In the event that any Interest Payment Date on a
Fixed Rate Note is not a Market Day, interest will be paid on the next
succeeding Market Day with the same force and effect as if made on such Interest
Payment Date.
REDEMPTION
If so specified in the applicable Pricing Supplement, a Note will be
redeemable at the option of the Company on the date or dates prior to the Stated
Maturity specified in the applicable Pricing Supplement at the price or prices
specified in the applicable Pricing Supplement (unless otherwise specified in
such Pricing Supplement, expressed as a percentage of the principal amount of
such Note), together with accrued interest, if any, to the date of redemption
determined as specified in the applicable Pricing Supplement. Unless otherwise
specified in the applicable Pricing Supplement, the Company may redeem any of
the Notes which are redeemable and remain outstanding either in whole or from
time to time in part upon not less than 30 nor more than 60 days' notice mailed
by or on behalf of the Company to the registered holder thereof. Unless
otherwise specified in the applicable Pricing Supplement, the Company will not
be obligated to redeem or purchase the Notes pursuant to any sinking fund or
analogous provision or at the option of any holder. If less than all of the
Notes of like tenor are to be redeemed, the Notes to be redeemed shall be
selected by the Trustee by such method as the Trustee shall deem fair and
appropriate. Upon any redemption of less than all of the principal of a Note
prior to Stated Maturity, a new Note of like tenor and of an authorized
denomination representing the unredeemed portion thereof will be issued to the
registered holder thereof. In the event that a redemption described above is
deemed to be a "tender offer" within the meaning of Rule 14e-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company
will comply with all provisions of the Exchange Act.
REPAYMENT
If set forth in the applicable Pricing Supplement, the Notes will be subject
to repayment at the option of the registered holders thereof in accordance with
the terms of the Notes on the repayment dates specified in such Notes (each an
"Optional Repayment Date"). If no Optional Repayment Date is specified with
respect to a Note, such Note will not be repayable at the option of the
registered holder thereof prior to its Stated Maturity. On any Optional
Repayment Date with respect to any Note, such Note will be repayable in whole or
in part in increments of $1,000 at the option of such registered holder at a
price equal to 100% of the principal amount to be repaid, together with interest
thereon payable to the date of repayment, on notice given not more than 45 nor
less than 30 days prior to the Optional Repayment Date.
While the Notes are represented by the Global Security and registered in the
name of the Depositary or its nominee, the option for repayment may be exercised
by a participant (as defined below under "Book-Entry Notes"), on behalf of the
beneficial owners of the Global Security, by delivering a written notice to the
Paying Agent at its corporate trust office (or such other address of which the
Company shall from time to time notify the Holders), not less than 30 nor more
than 60 days prior to the date of repayment. Notices of elections from the
participants on behalf of beneficial owners of the Global Security to exercise
their option
S-5
<PAGE>
to have such Book-Entry Notes repaid must be received by the Paying Agent by
5:00 p.m., New York City time, on the last day for giving such notice. In order
to ensure that a notice is received by the Paying Agent on a particular day, the
beneficial owner of the Global Security must direct its participant before such
participant's deadlines for accepting instructions from their customers.
Accordingly, beneficial owners of the Global Security should consult the
participant through which they own their interest therein for the respective
deadlines for such participant. All notices shall be executed by a duly
authorized officer of such participant (with signature guaranteed) and shall be
irrevocable. In addition, beneficial owners of the Global Security shall effect
delivery by causing the applicable participant to transfer such beneficial
owner's interest in the Global Security, on the Depositary's records, to the
Paying Agent. See "Book-Entry Notes" in this Prospectus Supplement.
Notwithstanding anything in this Prospectus Supplement to the contrary, if a
Note is an Original Issue Discount Note, the amount payable on such Note in the
event of redemption or repayment prior to the Stated Maturity date shall be the
Amortized Face Amount of such Note as of the date of redemption or the date of
repayment, as the case may be. The "Amortized Face Amount" of an Original Issue
Discount Note shall be the amount equal to (i) the issue price set forth in the
applicable Pricing Supplement plus (ii) that portion of the difference between
the issue price and the principal amount of such Note that has accrued at the
yield to maturity (computed in accordance with generally accepted United States
bond yield computation principles) by such date of redemption or repayment, as
calculated by the Calculation Agent, but in no event shall the Amortized Face
Amount of an Original Issue Discount Note exceed its principal amount.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes of the same series and bearing interest
(if any) at the same rate or pursuant to the same formula and having the same
date of issuance, redemption provisions (if any), repayment provisions (if any),
Stated Maturity and other terms will be represented by a single Global Security.
Each Global Security representing Book-Entry Notes will be deposited with, or on
behalf of, the Depositary and will be registered in the name of the Depositary
or a nominee of the Depositary. Unless otherwise specified in the applicable
Pricing Supplement, all Book-Entry Notes will be denominated in United States
dollars.
Upon the issuance of a Global Security, the Depositary will credit accounts
held with it with the respective principal or face amounts of the Book-Entry
Notes represented by such Global Security. The accounts to be credited shall be
designated initially by the Agent or, to the extent that such Notes are offered
and sold directly, by the Company. Ownership of beneficial interests in a Global
Security will be limited to institutions that have accounts with the Depositary
("participants") and to persons that may hold interests through such
participants. Ownership of beneficial interests by participants in a Global
Security will be shown on, and the transfer of that ownership interest will be
effected only through, records maintained by the Depositary for such Global
Security. Ownership of beneficial interests in such Global Security by persons
that hold through participants will be shown on, and the transfer of that
ownership interest within such participant will be effected only through,
records maintained by such participant.
Payment of principal of, premium (if any) and interest (if any) on
Book-Entry Notes represented by any such Global Security will be made to the
Depositary or its nominee, as the case may be, as the sole registered holder of
the Book-Entry Notes represented thereby for all purposes under the Indenture.
None of the Company, the Trustee, the Paying Agent or any agent of the Company
or the Trustee will have any responsibility or liability for any aspect of the
Depositary's records relating to or payments made on account of beneficial
ownership interests in a Global Security representing any Book-Entry Notes or
any other aspect of the relationship between the Depositary and its participants
or the relationship between such participants and the owner of beneficial
interests in a Global Security owning through such participants or for
maintaining, supervising or reviewing any of the Depositary's records relating
to such beneficial ownership interests.
The Company has been advised by the Depositary that upon receipt of any
payment of principal of, premium (if any) or interest (if any) on any such
Global Security, the Depositary will immediately credit, on its book-entry
registration and transfer system, the accounts of participants with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of the Depositary.
Payments by participants to owners of beneficial interests in a
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Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held by
such participants for customer accounts registered in "street name", and will be
the sole responsibility of such participants.
No Global Security may be transferred except as a whole by a nominee of the
Depositary to the Depositary or to another nominee of the Depositary, or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor.
Unless otherwise specified in the applicable Pricing Supplement, a Global
Security representing Book-Entry Notes is exchangeable for Certificated Notes of
the same series and bearing interest (if any) at the same rate or pursuant to
the same formula, having the same date of issuance, redemption provisions (if
any), repayment provisions (if any), Stated Maturity and other terms and of
differing authorized denominations aggregating a like amount, only if (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time the Depositary ceases to
be a clearing agency registered under the Exchange Act, (y) the Company in its
sole discretion determines that such Global Security shall be exchangeable for
Certificated Notes or (z) there shall have occurred and be continuing an Event
of Default with respect to the Notes. Such Certificated Notes shall be
registered in the names of the owners of the beneficial interests in such Global
Security as provided by the Depositary's relevant participants (as identified by
the Depositary).
Except as provided above, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Notes in
certificated form and will not be considered the registered holders thereof for
any purpose under the Indenture, and no Global Security representing Book-Entry
Notes shall be exchangeable or transferrable. Accordingly, each person owning a
beneficial interest in such a Global Security must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a registered holder under the Indenture. The laws of some jurisdictions
require that certain purchasers of securities take physical delivery of such
securities in certificated form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
The Depositary, as the registered holder of each Global Security, may
appoint agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a registered holder is entitled to give or take under the Indenture. The Company
understands that under existing industry practices, in the event that the
Company requests any action of registered holders or that an owner of a
beneficial interest in such a Global Security desires to give or take any action
which a registered holder is entitled to give or take under the Indenture, the
Depositary would authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instructions of beneficial owners owning through
them.
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
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 under the Exchange Act. The Depositary was created to hold the
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including the
Agents), banks (including the Trustee), trust companies, clearing corporations,
and certain other organizations some of whom (and/or their representatives) own
the Depositary. Access to the Depositary's book-entry system is also available
to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a participant, either directly
or indirectly.
REGARDING THE TRUSTEE
The Trustee under the Indenture with regard to the Notes is Citibank, N.A.
The Company and certain subsidiaries from time to time borrow from the Trustee,
maintain deposit accounts with the Trustee and conduct other banking
transactions with the Trustee in the ordinary course of their business.
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<PAGE>
GOVERNING LAW
The Indenture and the Notes will be governed by and construed in accordance
with, the laws of the State of New York.
UNITED STATES TAXATION
The following is a summary of the principal United States federal income tax
consequences of ownership of Notes. It deals only with Notes held as capital
assets by initial purchasers, and not with special classes of holders, such as
dealers in securities or currencies, banks, tax-exempt organizations, life
insurance companies, persons that hold Notes that are a hedge or that are hedged
against currency risks or that are part of a straddle or conversion transaction,
or persons whose functional currency is not the U.S. dollar. Moreover, the
summary deals only with Notes that are due to mature 30 years or less from the
date on which they are issued. The United States federal income tax consequences
of ownership of Notes that are due to mature more than 30 years from their date
of issue will be discussed in an applicable Pricing Supplement. The summary is
based on the Internal Revenue Code of 1986, as amended (the "Code"), its
legislative history, existing and proposed regulations thereunder, published
rulings and court decisions, all as currently in effect and all subject to
change at any time, perhaps with retroactive effect.
Prospective purchasers of Notes should consult their own tax advisors
concerning the consequences, in their particular circumstances, under the Code
and the laws of any other taxing jurisdiction, of ownership of Notes.
UNITED STATES HOLDERS
PAYMENTS OF INTEREST
Interest on a Note, other than interest on a "Discount Note" that is not
"qualified stated interest" (each as defined below under "Original Issue
Discount--General"), will be taxable to a United States Holder as ordinary
income at the time it is received or accrued, depending on the holder's method
of accounting for tax purposes. A United States Holder is a beneficial owner who
or that is (i) a citizen or resident of the United States, (ii) a domestic
corporation or (iii) otherwise subject to United States federal income taxation
on a net income basis in respect of the Note.
ORIGINAL ISSUE DISCOUNT
GENERAL. A Note, other than a Note with a term of one year or less (a
"short-term Note"), will be treated as issued at an original issue discount (a
"Discount Note") if the excess of the Note's "stated redemption price at
maturity" over its issue price is more than a "de minimis amount" (as defined
below). Generally, the issue price of a Note will be the first price at which a
substantial amount of Notes included in the issue of which the Note is a part is
sold to other than bond houses, brokers, or similar persons or organizations
acting in the capacity of underwriters, placement agents, or wholesalers. The
stated redemption price at maturity of a Note is the total of all payments
provided by the Note that are not payments of "qualified stated interest". A
qualified stated interest payment is generally any one of a series of stated
interest payments on a Note that are unconditionally payable at least annually
at a single fixed rate (with certain exceptions for lower rates paid during some
periods) applied to the outstanding principal amount of the Note.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is less than 1/4 of 1 percent of the Note's stated
redemption price at maturity multiplied by the number of complete years to its
maturity (the "de minimis amount"), then such excess, if any, constitutes "de
minimis original issue discount" and the Note is not a Discount Note. Unless the
election described below under "Election to Treat All Interest as Original Issue
Discount" is made, a United States Holder of a Note with de minimis original
issue discount must include such de minimis original issue discount in income as
stated principal payments on the Note are made. The includible amount with
respect to each such payment will equal the product of the total amount of the
Note's de minimis original issue discount and a fraction, the numerator of which
is the amount of the principal payment made and the denominator of which is the
stated principal amount of the Note.
United States Holders of Discount Notes having a maturity of more than one
year from their date of issue must include original issue discount ("OID") in
income calculated on a constant-yield method before
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the receipt of cash attributable to such income, and generally will have to
include in income increasingly greater amounts of OID over the life of the Note.
The amount of OID includible in income by a United States Holder of a Discount
Note is the sum of the daily portions of OID with respect to the Discount Note
for each day during the taxable year or portion of the taxable year on which the
United States Holder holds such Discount Note ("accrued OID"). The daily portion
is determined by allocating to each day in any "accrual period" a pro rata
portion of the OID allocable to that accrual period. Accrual periods with
respect to a Note may be of any length selected by the United States Holder and
may vary in length over the term of the Note as long as (i) no accrual period is
longer than one year and (ii) each scheduled payment of interest or principal on
the Note occurs on either the final or first day of an accrual period. The
amount of OID allocable to an accrual period equals the excess of (a) the
product of the Discount Note's adjusted issue price at the beginning of the
accrual period and such Note's yield to maturity (determined on the basis of
compounding at the close of each accrual period and properly adjusted for the
length of the accrual period) over (b) the sum of the payments of qualified
stated interest on the Note allocable to the accrual period. The "adjusted issue
price" of a Discount Note at the beginning of any accrual period is the issue
price of the Note increased by (x) the amount of accrued OID for each prior
accrual period and decreased by (y) the amount of any payments previously made
on the Note that were not qualified stated interest payments. For purposes of
determining the amount of OID allocable to an accrual period, if an interval
between payments of qualified stated interest on the Note contains more than one
accrual period, the amount of qualified stated interest payable at the end of
the interval (including any qualified stated interest that is payable on the
first day of the accrual period immediately following the interval) is allocated
pro rata on the basis of relative lengths to each accrual period in the
interval, and the adjusted issue price at the beginning of each accrual period
in the interval must be increased by the amount of any qualified stated interest
that has accrued prior to the first day of the accrual period but that is not
payable until the end of the interval. The amount of OID allocable to an initial
short accrual period may be computed using any reasonable method if all other
accrual periods other than a final short accrual period are of equal length. The
amount of OID allocable to the final accrual period is the difference between
(x) the amount payable at the maturity of the Note (other than any payment of
qualified stated interest) and (y) the Note's adjusted issue price as of the
beginning of the final accrual period.
ACQUISITION PREMIUM. A United States Holder that purchases a Note for an
amount less than or equal to the sum of all amounts payable on the Note after
the purchase date other than payments of qualified stated interest but in excess
of its adjusted issue price (any such excess being "acquisition premium") and
that does not make the election described below under "Election to Treat All
Interest as Original Issue Discount" is permitted to reduce the daily portions
of OID by a fraction, the numerator of which is the excess of the United States
Holder's adjusted basis in the Note immediately after its purchase over the
adjusted issue price of the Note, and the denominator of which is the excess of
the sum of all amounts payable on the Note after the purchase date, other than
payments of qualified stated interest, over the Note's adjusted issue price.
MARKET DISCOUNT. A Note, other than a short-term Note, will be treated as
purchased at a market discount (a "Market Discount Note") if (i) the amount for
which a United States Holder purchased the Note is less than the Note's issue
price (as determined above under "Original Issue Discount--General") and (ii)
the Note's stated redemption price at maturity or, in the case of a Discount
Note, the Note's "revised issue price", exceeds the amount for which the United
States Holder purchased the Note by at least 1/4 of 1 percent of such Note's
stated redemption price at maturity or revised issue price, respectively,
multiplied by the number of complete years to the Note's maturity. If such
excess is not sufficient to cause the Note to be a Market Discount Note, then
such excess constitutes "de minimis market discount". The Code provides that,
for these purposes, the "revised issue price" of a Note generally equals its
issue price, increased by the amount of any OID that has accrued on the Note.
Any gain recognized on the maturity or disposition of a Market Discount Note
will be treated as ordinary income to the extent that such gain does not exceed
the accrued market discount on such Note. Alternatively, a United States Holder
of a Market Discount Note may elect to include market discount in income
currently over the life of the Note. Such an election shall apply to all debt
instruments with market discount acquired by the electing United States Holder
on or after the first day of the first taxable year to which the election
applies. This election may not be revoked without the consent of the Service.
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Market discount on a Market Discount Note will accrue on a straight-line
basis unless the United States Holder elects to accrue such market discount on a
constant-yield method. Such an election shall apply only to the Note with
respect to which it is made and may not be revoked. A United States Holder of a
Market Discount Note that does not elect to include market discount in income
currently generally will be required to defer deductions for interest on
borrowings allocable to such Note in an amount not exceeding the accrued market
discount on such Note until the maturity or disposition of such Note.
PRE-ISSUANCE ACCRUED INTEREST. If (i) a portion of the initial purchase
price of a Note is attributable to pre-issuance accrued interest, (ii) the first
stated interest payment on the Note is to be made within one year of the Note's
issue date and (iii) the payment will equal or exceed the amount of pre-issuance
accrued interest, then the United States Holder may elect to decrease the issue
price of the Note by the amount of pre-issuance accrued interest. In that event,
a portion of the first stated interest payment will be treated as a return of
the excluded pre-issuance accrued interest and not as an amount payable on the
Note.
NOTES SUBJECT TO CONTINGENCIES INCLUDING OPTIONAL REDEMPTION. In general,
if a Note provides for an alternative payment schedule or schedules applicable
upon the occurrence of a contingency or contingencies and the timing and amounts
of the payments that comprise each payment schedule are known as of the issue
date, the yield and maturity of the Note are determined by assuming that the
payments will be made according to the Note's stated payment schedule. If,
however, based on all the facts and circumstances as of the issue date, it is
more likely than not that the Note's stated payment schedule will not occur,
then, in general, the yield and maturity of the Note are computed based on the
payment schedule most likely to occur.
Notwithstanding the general rules for determining yield and maturity in the
case of Notes subject to contingencies, if the Company has an unconditional
option or options to redeem a Note, or the Holder has an unconditional option or
options to cause a Note to be repurchased, prior to the Note's stated maturity,
then (i) in the case of an option or options of the Company, the Company will be
deemed to exercise or not exercise an option or combination of options in the
manner that minimizes the yield on the Note and (ii) in the case of an option or
options of the Holder, the Holder will be deemed to exercise or not exercise an
option or combination of options in the manner that maximizes the yield on the
Note. For purposes of those calculations, the yield on the Note is determined by
using any date on which the Note may be redeemed or repurchased as the maturity
date and the amount payable on such date in accordance with the terms of the
Note as the principal amount payable at maturity.
If a contingency (including the exercise of an option) actually occurs or
does not occur contrary to an assumption made according to the above rules (a
"change in circumstances") then, except to the extent that a portion of the Note
is repaid as a result of a change in circumstances and solely for purposes of
the accrual of OID, the yield and maturity of the Note are redetermined by
treating the Note as reissued on the date of the change in circumstances for an
amount equal to the Note's adjusted issue price on that date.
ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT. A United States
Holder may elect to include in gross income all interest that accrues on a Note
using the constant-yield method described above under the heading "Original
Issue Discount--General", with the modifications described below. For purposes
of this election, interest includes stated interest, OID, de minimis original
issue discount, market discount, de minimis market discount and unstated
interest, as adjusted by any amortizable bond premium (described below under
"Notes Purchased at a Premium") or acquisition premium.
In applying the constant-yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
United States Holder's adjusted basis in the Note immediately after its
acquisition, the issue date of the Note will be the date of its acquisition by
the electing United States Holder, and no payments on the Note will be treated
as payments of qualified stated interest. This election will generally apply
only to the Note with respect to which it is made and may not be revoked without
the consent of the Service. If this election is made with respect to a Note with
amortizable bond premium, then the electing United States Holder will be deemed
to have elected to apply amortizable bond premium against interest with respect
to all debt instruments with amortizable bond premium (other than debt
instruments the interest on which is excludible from gross income) held by the
electing United States Holder as of the beginning of the taxable year in which
the Note with respect to which the election is made is acquired or thereafter
acquired. The deemed election with respect to amortizable bond premium may not
be revoked without the consent of the Service.
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If the election to apply the constant-yield method to all interest on a Note
is made with respect to a Market Discount Note, the electing United States
Holder will be treated as having made the election discussed above under
"Original Issue Discount--Market Discount" to include market discount in income
currently over the life of all debt instruments held or thereafter acquired by
such United States Holder.
SHORT-TERM NOTES. In general, an individual or other cash basis United
States Holder of a short-term Note is not required to accrue OID (as specially
defined below for the purposes of this paragraph) for United States federal
income tax purposes unless it elects to do so (but may be required to include
any stated interest in income as the interest is received). Accrual basis United
States Holders and certain other United States Holders, including banks,
regulated investment companies, dealers in securities, common trust funds,
United States Holders who hold Notes as part of certain identified hedging
transactions, certain pass-thru entities and cash basis United States Holders
who so elect, are required to accrue OID on short-term Notes on either a
straight-line basis or under the constant-yield method (based on daily
compounding), at the election of the United States Holder. In the case of a
United States Holder not required and not electing to include OID in income
currently, any gain realized on the sale or retirement of the short-term Note
will be ordinary income to the extent of the OID accrued on a straight-line
basis (unless an election is made to accrue the OID under the constant-yield
method) through the date of sale or retirement. United States Holders who are
not required and do not elect to accrue OID on short-term Notes will be required
to defer deductions for interest on borrowings allocable to short-term Notes in
an amount not exceeding the deferred income until the deferred income is
realized.
For purposes of determining the amount of OID subject to these rules, all
interest payments on a short-term Note, including stated interest, are included
in the short-term Note's stated redemption price at maturity.
FLOATING RATE NOTES
Any interest (including any OID) on Floating Rate Notes or Notes bearing
interest at a combination of fixed and floating rates that is not taxed in the
manner described above under "Payment of Interest" will be taxed in the manner
discussed in the applicable Pricing Supplement.
NOTES PURCHASED AT A PREMIUM
A United States Holder that purchases a Note for an amount in excess of its
principal amount may elect to treat such excess as "amortizable bond premium",
in which case the amount required to be included in the United States Holder's
income each year with respect to interest on the Note will be reduced by the
amount of amortizable bond premium allocable (based on the Note's yield to
maturity) to such year. Any election to amortize bond premium shall apply to all
bonds (other than bonds the interest on which is excludible from gross income)
held by the United States Holder at the beginning of the first taxable year to
which the election applies or thereafter acquired by the United States Holder,
and is irrevocable without the consent of the Service. See also "Original Issue
Discount--Election to Treat All Interest as Original Issue Discount".
PURCHASE, SALE AND RETIREMENT OF THE NOTES
A United States Holder's tax basis in a Note will generally be the amount
paid for the Note increased by the amount of any OID or market discount included
in the United States Holder's income with respect to the Note and the amount, if
any, of income attributable to de minimis original issue discount and de minimis
market discount included in the United States Holder's income with respect to
the Note, and reduced by (i) the amount of any payments that are not qualified
stated interest payments, and (ii) the amount of any amortizable bond premium
applied to reduce interest on the Note.
A United States Holder will generally recognize gain or loss on the sale or
retirement of a Note equal to the difference between the amount realized on the
sale or retirement and the tax basis of the Note. Except to the extent described
above under "Original Issue Discount-- Short-Term Notes" or "Original Issue
Discount--Market Discount" or attributable to accrued but unpaid interest, gain
or loss recognized on the sale or retirement of a Note will be capital gain or
loss and will be long-term capital gain or loss if the Note was held for more
than one year.
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UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
holder who is (i) a nonresident alien individual or (ii) a foreign corporation,
partnership or estate or trust which is not subject to United States federal
income tax on a net income basis in respect of income or gain from a Note.
Under present United States federal income and estate tax law and subject to
the discussion of backup withholding below:
(i) payments of principal, premium (if any) and interest (including OID)
by the Company or any of its paying agents to any holder of a Note or coupon
that is a United States Alien Holder will not be subject to United States
federal withholding tax if, in the case of interest or OID, (a) the
beneficial owner of the Note or coupon does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock
of the Company entitled to vote, (b) the beneficial owner of the Note or
coupon is not a controlled foreign corporation that is related to the
Company through stock ownership, and (c) either (A) the beneficial owner of
the Note or coupon certifies to the Company or its agent, under penalties of
perjury, that it is not a United States Holder and provides its name and
address or (B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business (a "financial institution") and holds the Note or coupon
certifies to the Company or its agent under penalties of perjury that such
statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes the
payor with a copy thereof;
(ii) a United States Alien Holder of a Note or coupon will not be
subject to United States federal withholding tax on any gain realized on the
sale or exchange of a Note or coupon; and
(iii) a Note or coupon held by an individual who at death is not a
citizen or resident of the United States will not be includible in the
individual's gross estate for purposes of the United States federal estate
tax as a result of the individual's death (a) if the individual did not
actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote and (b) the
income on the Note would not have been effectively connected with a United
States trade or business of the individual at the individual's death.
BACKUP WITHHOLDING AND INFORMATION REPORTING
UNITED STATES HOLDERS
In general, information reporting requirements will apply to payments of
principal, any premium and interest on a Note and the proceeds of the sale of a
Note before maturity within the United States to, and to the accrual of OID on a
Discount Note with respect to, non-corporate United States Holders, and "backup
withholding" at a rate of 31% will apply to such payments and to payments of OID
if the United States Holder fails to provide an accurate taxpayer identification
number or to report all interest and dividends required to be shown on its
federal income tax returns.
UNITED STATES ALIEN HOLDERS
Information reporting and backup withholding will not apply to payments of
principal, premium (if any) and interest (including OID) made by the Company or
a paying agent to a United States Alien Holder on a Note if the certification
described in clause (i)(c) under "United States Alien Holders" above is
received, provided that the payor does not have actual knowledge that the holder
is a United States person.
Payments of the proceeds from the sale by a United States Alien Holder of a
Note made to or through a foreign office of a broker will not be subject to
information reporting or backup withholding, except that if the broker is a
United States person, a controlled foreign corporation for United States tax
purposes or a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified three-year
period, information reporting may apply to such payments. Payments of the
proceeds from the sale of a Note to or through the United States office of a
broker is subject to information reporting and backup withholding unless the
holder or beneficial owner certifies as to its non-United States status or
otherwise establishes an exemption from information reporting and backup
withholding.
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PLAN OF DISTRIBUTION OF RETAIL MEDIUM-TERM NOTES
The Notes are being offered on a continuous basis for sale by the Company
through Smith Barney Inc. (the "Agent"). If agreed to by the Company and the
Agent, the Agent may utilize its best efforts on an agency basis to solicit
offers to purchase the Notes at 100% of the principal amount thereof, unless
otherwise specified in an applicable Pricing Supplement. The Company will pay
the Agent a commission which, depending on the maturity of the Notes, will range
from .20% to 3.00% of the principal amount of any Note sold through the Agent.
Commissions and discounts with respect to Notes with maturities in excess of 30
years will be negotiated between the Company and the Agent at the time of such
sale. The Company may also sell Notes directly to investors and other purchasers
on its own behalf in those jurisdictions where it is authorized to do so.
In addition, the Agent may offer the Notes it has purchased as principal to
other dealers for resale to investors, and may allow any portion of the discount
received in connection with such purchases from the Company to such dealers.
After the initial public offering of Notes to be resold to investors and other
purchasers, the public offering price (in the case of Notes to be resold on a
fixed public offering price basis), concession and discount may be changed.
The Company reserves the right to withdraw, cancel or modify any offer to
sell Notes without notice and may reject orders in whole or in part whether
placed directly with the Company or through the Agent. The Agent will have the
right, in its discretion reasonably exercised, to reject, in whole or in part,
any offer to purchase Notes received by it on an agency basis.
Unless otherwise provided in a Pricing Supplement, payment of the purchase
price of the Notes will be required to be made in immediately available funds in
The City of New York on the date of settlement.
The Agent, whether acting as agent or principal, may be deemed to be an
"underwriter" within the meaning of the Securities Act. The Company has agreed
to indemnify the Agent against certain liabilities, including liabilities under
the Securities Act, or to contribute to payments that the Agent may be required
to make in respect thereof. The Agent may engage in transactions with, or
perform services for, the Company in the ordinary course of business.
The Agent may from time to time purchase and sell Notes in the secondary
market, but it is not obligated to do so, and there can be no assurance that
there will be a secondary market for the Notes or liquidity in the secondary
market if one develops. From time to time, the Agent may make a market in the
Notes, but the Agent is not obligated to do so and may discontinue any
market-making at any time.
In addition to Notes being offered through the Agent as described herein,
other series of notes (including other series of Medium-Term Notes) that may
have terms identical or similar to the terms of the Notes may be concurrently
offered by the Company on a continuous basis both inside and outside the United
States pursuant to one or more separate distribution agreements with the Agent
or other agents. Pursuant to such agreements, such agents may also purchase
notes as principal for their own account or for resale, and the Company may make
direct sales of notes on its own behalf. Any notes so offered and sold in excess
of certain amounts will reduce correspondingly the maximum aggregate principal
amount of Notes that may be offered by this Prospectus Supplement and the
accompanying Prospectus.
The Agent does not intend to confirm sales of Notes to any accounts over
which it has discretionary authority.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by Stanley S.
Stroup, Executive Vice President and General Counsel of the Company, and for the
Agent by Sullivan & Cromwell, 125 Broad Street, New York, New York 10004. As of
June 30, 1995, Mr. Stroup was the owner of 108,607 shares of the Company's
Common Stock and had options to acquire 327,410 additional shares. Mr. Stroup
may rely upon the opinion of Sullivan & Cromwell with respect to matters of New
York law. Certain tax matters will be passed upon for the Company by Faegre &
Benson Professional Limited Liability Partnership ("Faegre & Benson"), 2200
Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota 55402. Faegre &
Benson and certain members of the firm are indebted to and have other banking
and trust relationships with certain affiliated banks of the Company. As of June
30, 1995, members of Faegre & Benson and members of their
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families owned an aggregate of 54,600 shares of the Company's Common Stock and
2,800 shares of the Company's Preferred Stock. The opinions of Mr. Stroup and
Sullivan & Cromwell will be conditioned upon, and subject to certain assumptions
regarding, future action to be taken by the Company and the Trustee in
connection with the issuance and sale of any particular Note, the specific terms
of Notes and other matters which may affect the validity of Notes but which
cannot be ascertained on the date of such opinions.
EXPERTS
The consolidated financial statements of the Company and subsidiaries as of
December 31, 1994 and 1993, and for each of the years in the three-year period
ended December 31, 1994, incorporated by reference herein and elsewhere in the
Registration Statement, have been incorporated herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
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PROSPECTUS
NORWEST CORPORATION
DEBT SECURITIES AND DEBT WARRANTS
PREFERRED SHARES AND PREFERRED SHARE WARRANTS
COMMON STOCK WARRANTS
UNITS
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Norwest Corporation (the "Corporation") intends to offer from time to time
in one or more series its unsecured debt securities, which may be senior (the
"Senior Securities") or subordinated (the "Subordinated Securities," and
together with the Senior Securities, the "Debt Securities"), warrants to
purchase the Debt Securities ("Debt Warrants"), shares of preferred stock or
preference stock (the "Preferred Shares"), interests in which may be represented
by depositary shares ("Depositary Shares"), warrants to purchase the Preferred
Shares or Depositary Shares ("Preferred Share Warrants") or warrants to purchase
Common Stock ("Common Stock Warrants," and together with the Debt Warrants and
Preferred Share Warrants, the "Securities Warrants"), with an aggregate initial
public offering price (including the exercise price of any Securities Warrants)
of up to $3,000,000,000 or the equivalent thereof in one or more foreign
currencies or composite currencies, including European Currency Units ("ECU"),
on terms to be determined at the time of sale. The Debt Securities, Preferred
Shares, Depositary Shares and Securities Warrants may be offered separately or
as a part of units consisting of one or more such securities ("Units," and
together with the Debt Securities, Preferred Shares, Depositary Shares and
Securities Warrants, the "Offered Securities"), in separate series, in amounts,
at prices and on terms to be set forth in one or more supplements to this
Prospectus (a "Prospectus Supplement").
The Senior Securities will rank PARI PASSU with all other unsecured Senior
Debt of the Corporation, as defined. The Subordinated Securities will be
subordinated to all existing and future Senior Debt of the Corporation.
Specific terms of the Offered Securities, including such terms as, where
applicable, (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, currency, denominations, maturity, premium, rate and
time of payment of interest, terms for redemption at the option of the
Corporation or repayment at the option of the holder, terms for sinking fund
payments and the initial public offering price; (ii) in the case of Preferred
Shares, the specific title and stated value, any dividend, liquidation,
redemption, conversion, voting and other rights, and the initial public offering
price and whether interests in the Preferred Shares will be represented by
Depositary Shares; and (iii) in the case of Securities Warrants, where
applicable, the duration, offering price, exercise price and detachability, are
set forth in the accompanying Prospectus Supplement. Units may be issued in
amounts, at prices, on terms and containing such conditions, covenants and other
provisions, and consisting of such Offered Securities and other securities, as
will be set forth in a Prospectus Supplement. The Prospectus Supplement will
also contain information, where applicable, about certain United States federal
income tax considerations relating to and any listing on a securities exchange
of the Offered Securities covered by the Prospectus Supplement.
The Offered Securities may be offered directly, through agents designated
from time to time or to or through underwriters or dealers, which may include
affiliates of the Corporation. If any agents or underwriters are involved in the
sale of any of the Offered Securities, their names, and any applicable fee,
commission, purchase price or discount arrangements with them, will be set
forth, or will be calculable from the information set forth, in the Prospectus
Supplement.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
---------------------
THE OFFERED SECURITIES ARE UNSECURED OBLIGATIONS OF THE CORPORATION AND ARE NOT
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK
SUBSIDIARY OF THE CORPORATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER
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 OR ANY PROSPECTUS SUPPLEMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is September 1, 1995.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Securities and
Exchange Commission (the "Commission") are incorporated in and made a part of
this Prospectus by reference: (i) Annual Report on Form 10-K for the year ended
December 31, 1994; (ii) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995 and June 30, 1995; (iii) Current Reports on Form 8-K dated
January 9, 1995, January 27, 1995, February 17, 1995, April 21, 1995 and July 3,
1995; (iv) Registration Statement on Form 8-A dated December 6, 1988, as amended
by Amendment No. 1 on Form 8 dated July 21, 1989; (v) Registration Statement on
Form 8-A dated December 21, 1990; and (vi) Registration Statement on Form 8-A
dated August 8, 1991.
All documents filed by the Corporation with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") subsequent to the date of this Prospectus and prior
to the termination of the offering of the Offered Securities offered hereby
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or in
the accompanying Prospectus Supplement modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Corporation will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the information incorporated
herein by reference (other than exhibits, unless such exhibits are specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to Laurel A. Holschuh, Senior Vice President and Secretary,
Norwest Corporation, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota
55479-1026. Telephone requests may be directed to (612) 667-8655.
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus or a Prospectus
Supplement in connection with the offering described herein and therein, and any
information or representations not contained herein or therein must not be
relied upon as having been authorized. This Prospectus may not be used to
consummate sales of Offered Securities unless accompanied by a Prospectus
Supplement. The delivery of this Prospectus and a Prospectus Supplement relating
to particular Offered Securities shall not constitute an offer of any of the
other Offered Securities covered by this Prospectus. The delivery of this
Prospectus or any Prospectus Supplement does not constitute an offer to sell or
a solicitation of an offer to buy the Offered Securities in any circumstances in
which such offer or solicitation of an offer to buy the Offered Securities is
unlawful.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports and other information with the
Commission. Such reports, proxy and information statements and other information
filed by the Corporation can be inspected and copied at the public reference
facilities of the Commission, Room 1024, 450 Fifth Street N.W., Washington, D.C.
20549, and at the regional offices of the Commission located at Seven World
Trade Center, Suite 1300, New York, New York 10048, and at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511, and copies of such materials
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy and
information statements and other information concerning the Corporation can also
be inspected at the offices of the New York Stock Exchange at 20 Broad Street,
New York, New York 10005, and at the offices of the Chicago Stock Exchange at
One Financial Place, 440 South LaSalle Street, Chicago, Illinois 60605.
Additional information regarding the Corporation and the Offered Securities
offered hereby is contained in the Registration Statement and the exhibits
relating thereto in respect of the Offered Securities
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offered hereby, filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). For further information pertaining to the
Corporation and the Offered Securities offered hereby, reference is made to the
Registration Statement and the exhibits thereto, which may be inspected without
charge at the office of the Commission at 450 Fifth Street N.W., Washington,
D.C. 20549, and copies thereof may be obtained from the Commission at prescribed
rates.
-------------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars," or "U.S. $").
THE CORPORATION
The Corporation is a diversified financial services company which was
organized under the laws of Delaware in 1929 and is registered under the Bank
Holding Company Act of 1956, as amended (the "BHCA"). The Corporation operates
through subsidiaries engaged in banking and in related businesses. The
Corporation provides retail, commercial, and corporate banking services to its
customers through banks located in Arizona, Colorado, Illinois, Indiana, Iowa,
Minnesota, Montana, Nebraska, New Mexico, North Dakota, Ohio, South Dakota,
Texas, Wisconsin, and Wyoming. The Corporation provides additional financial
services to its customers through subsidiaries engaged in various businesses,
principally mortgage banking, consumer finance, equipment leasing, agricultural
finance, commercial finance, securities brokerage and investment banking,
insurance agency services, computer and data processing services, trust
services, and venture capital investment.
At June 30, 1995, the Corporation had consolidated total assets of $66.6
billion, total deposits of $38.2 billion, and total stockholders' equity of $4.7
billion. Based on total assets at June 30, 1995, the Corporation was the twelfth
largest commercial banking organization in the United States.
The Corporation regularly explores opportunities for possible acquisitions
of financial institutions and related businesses. Generally, management of the
Corporation does not make a public announcement about an acquisition until a
definitive agreement has been signed. The Corporation has entered into
definitive agreements for the acquisition of various financial institutions
having aggregate total assets at June 30, 1995 of approximately $4.5 billion.
Certain of these acquisitions were consummated subsequent to June 30, 1995, and
the others remain subject to regulatory approval and are expected to be
completed by the end of the first quarter of 1996. None of these acquisitions is
individually significant or material to the financial statements of the
Corporation.
The Corporation's principal executive offices are located at Norwest Center,
Sixth and Marquette, Minneapolis, Minnesota 55479-1000, and its telephone number
is (612) 667-1234.
Additional information concerning the Corporation is included in the
documents incorporated by reference herein. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
CERTAIN REGULATORY MATTERS
GENERAL
As a bank holding company, the Corporation is subject to supervision and
examination by the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"). The Corporation's banking subsidiaries are subject to
supervision and examination by applicable federal and state banking agencies.
The deposits of the Corporation's banking subsidiaries are insured by the Bank
Insurance Fund of the Federal Deposit Insurance Corporation (the "FDIC"), and
therefore such banking subsidiaries are subject to regulation by the FDIC. In
addition to the impact of regulation, commercial banks are affected
significantly by the actions of the Federal Reserve Board as it attempts to
control the money supply and credit availability in order to influence the
economy.
DIVIDEND RESTRICTIONS
Various federal and state statutes and regulations limit the amount of
dividends the subsidiary banks can pay to the Corporation without regulatory
approval. The approval of the Comptroller of the Currency is required for any
dividend by a national bank if the total of all dividends declared by the bank
in any calendar
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year would exceed the total of its net profits, as defined by regulation, for
that year combined with its retained net profits for the preceding two years
less any required transfers to surplus or a fund for the retirement of any
preferred stock. In addition, a national bank may not pay a dividend in an
amount greater than its net profits then on hand after deducting its losses and
bad debts. For this purpose, bad debts are defined to include, generally, loans
which have matured and are in arrears with respect to interest by six months or
more, other than such loans which are well secured and in the process of
collection. Under these provisions the Corporation's national bank subsidiaries
could have declared, as of June 30, 1995, aggregate dividends of at least $231.9
million, without obtaining prior regulatory approval and without reducing the
capital of the banks below minimum regulatory levels. The Corporation also has
several state bank subsidiaries that are subject to state regulations limiting
dividends; however, the amount of dividends payable by the Corporation's state
bank subsidiaries, with or without state regulatory approval, would represent an
immaterial contribution to the Corporation's revenues.
If, in the opinion of the applicable regulatory authority, a bank under its
jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the bank, could include
the payment of dividends), such authority may require, after notice and hearing,
that such bank cease and desist from such practice. The Federal Reserve Board,
the Comptroller of the Currency, and the FDIC have issued policy statements
which provide that FDIC-insured banks and bank holding companies should
generally pay dividends only out of current operating earnings.
HOLDING COMPANY STRUCTURE
The Corporation is a legal entity separate and distinct from its banking and
nonbanking subsidiaries. Accordingly, the right of the Corporation, and thus the
rights of the Corporation's creditors, to participate in any distribution of the
assets or earnings of any subsidiary is necessarily subject to the prior claims
of creditors of such subsidiary, except to the extent that claims of the
Corporation in its capacity as a creditor may be recognized. The principal
sources of the Corporation's revenues are dividends and fees from its
subsidiaries.
The Corporation's banking subsidiaries are subject to restrictions under
federal law which limit the transfer of funds by the subsidiary banks to the
Corporation and its nonbank subsidiaries, whether in the form of loans,
extensions of credit, investments, or asset purchases. Such transfers by any
subsidiary bank to the Corporation or any nonbank subsidiary are limited in
amount to 10% of the bank's capital and surplus and, with respect to the
Corporation and all such nonbank subsidiaries, to an aggregate of 20% of such
bank's capital and surplus. Furthermore, such loans and extensions of credit are
required to be secured in specified amounts.
The Federal Reserve Board has a policy to the effect that a bank holding
company is expected to act as a source of financial and managerial strength to
each of its subsidiary banks and to commit resources to support each such
subsidiary bank. This support may be required at times when the Corporation may
not have the resources to provide it. Any capital loans by the Corporation to
any of the subsidiary banks are subordinate in right of payment to deposits and
to certain other indebtedness of such subsidiary bank. In addition, the Crime
Control Act of 1990 provides that in the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.
A depository institution insured by the FDIC can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC after August 9,
1989, in connection with (i) the default of a commonly controlled FDIC-insured
depository institution or (ii) any assistance provided by the FDIC to a commonly
controlled FDIC-insured depository institution in danger of default. "Default"
is defined generally as the appointment of a conservator or receiver and "in
danger of default" is defined generally as the existence of certain conditions
indicating that a "default" is likely to occur in the absence of regulatory
assistance.
Federal law (12 U.S.C. Section55) permits the Comptroller of the Currency to
order the pro rata assessment of shareholders of a national bank whose capital
stock has become impaired, by losses or otherwise, to
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<PAGE>
relieve a deficiency in such national bank's capital stock. This statute also
provides for the enforcement of any such pro rata assessment of shareholders of
such national bank to cover such impairment of capital stock by sale, to the
extent necessary, of the capital stock of any assessed shareholder failing to
pay the assessment. Similarly, the laws of certain states provide for such
assessment and sale with respect to banks chartered by such states. The
Corporation, as the sole shareholder of most of its subsidiary banks, is subject
to such provisions.
CAPITAL REQUIREMENTS
Under the Federal Reserve Board's risk-based capital guidelines for bank
holding companies, the minimum ratio of total capital to risk-adjusted assets
(including certain off-balance sheet items, such as stand-by letters of credit)
is 8%. At least half of the total capital is to be comprised of common stock,
minority interests and noncumulative perpetual preferred stock ("Tier 1
capital"). The remainder ("Tier 2 capital") may consist of hybrid capital
instruments, perpetual debt, mandatory convertible debt securities, a limited
amount of subordinated debt, other preferred stock, and a limited amount of the
allowance for credit losses. In addition, the Federal Reserve Board's minimum
"leverage ratio" (the ratio of Tier 1 capital to quarterly average total assets)
guidelines for bank holding companies provide for a minimum leverage ratio of 3%
for bank holding companies that meet certain specified criteria, including that
they have the highest regulatory rating. All other bank holding companies are
required to maintain a leverage ratio of 3% plus an additional cushion of 1% to
2%. The guidelines also provide that banking organizations experiencing internal
growth or making acquisitions are expected to maintain strong capital positions
substantially above the minimum supervisory levels, without significant reliance
on intangible assets. Furthermore, the guidelines indicate that the Federal
Reserve Board will continue to consider a "tangible Tier 1 leverage ratio" in
evaluating proposals for expansion or new activities. The tangible Tier 1
leverage ratio is the ratio of a banking organization's Tier 1 capital, less all
intangibles, to total assets, less all intangibles. Each of the Corporation's
banking subsidiaries is also subject to capital requirements adopted by
applicable regulatory agencies which are substantially similar to the foregoing.
At June 30, 1995, the Corporation's Tier 1 and total capital (the sum of Tier 1
and Tier 2 capital) to risk-adjusted assets ratios were 8.04% and 10.18%,
respectively, and the Corporation's leverage ratio was 5.85%. Neither the
Corporation nor any subsidiary bank has been advised by the appropriate federal
regulatory agency of any specific leverage ratio applicable to it.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December 1991, Congress enacted the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA"), which substantially revised the bank
regulatory and funding provisions of the Federal Deposit Insurance Act and makes
revisions to several other federal banking statutes. Among other things, FDICIA
requires the federal banking regulators to take "prompt corrective action" in
respect of FDIC-insured depository institutions that do not meet minimum capital
requirements. FDICIA establishes five capital tiers: "well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized"
and "critically undercapitalized." Under applicable regulations, an FDIC-insured
depository institution is defined to be well capitalized if it maintains a
leverage ratio of at least 5%, a risk-adjusted Tier 1 capital ratio of at least
6% and a risk-adjusted total capital ratio of at least 10% and is not subject to
a directive, order or written agreement to meet and maintain specific capital
levels. An insured depository institution is defined to be adequately
capitalized if it meets all of its minimum capital requirements as described
above. An insured depository institution will be considered undercapitalized if
it fails to meet any minimum required measure, significantly undercapitalized if
it has a risk-adjusted total capital ratio of less than 6%, risk-adjusted Tier 1
capital ratio of less than 3% or a leverage ratio of less than 3% and critically
undercapitalized if it fails to maintain a level of tangible equity equal to at
least 2% of total assets. An insured depository institution may be deemed to be
in a capitalization category that is lower than is indicated by its actual
capital position if it receives an unsatisfactory examination rating.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution
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<PAGE>
would thereafter be undercapitalized. Undercapitalized depository institutions
are subject to a wide range of limitations on operations and activities,
including growth limitations, and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the parent
holding company is limited to the lesser of (i) an amount equal to 5% of the
depository institution's total assets at the time it became undercapitalized and
(ii) the amount which is necessary (or would have been necessary) to bring the
institution into compliance with all capital standards applicable with respect
to such institution as of the time it fails to comply with the plan. If a
depository institution fails to submit an acceptable plan, it is treated as if
it were significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets, and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver or conservator.
FDICIA, as amended by the Reigle Community Development and Regulatory
Improvement Act of 1994 enacted on August 22, 1994, directs that each federal
banking agency prescribe standards, by regulation or guideline, for depository
institutions relating to internal controls, information systems, internal audit
systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, compensation, asset quality, earnings, stock valuation, and such other
operational and managerial standards as the agency deems appropriate. The FDIC,
in consultation with the other federal banking agencies, has adopted a final
rule and guidelines with respect to external and internal audit procedures and
internal controls in order to implement those provisions of FDICIA intended to
facilitate the early identification of problems in financial management of
depository institutions. On July 10, 1995, the federal banking agencies
published the final rules implementing three of the safety and soundness
standards required by FDICIA, including operational and managerial standards,
asset quality and earnings standards, and compensation standards. The impact of
such standards on the Corporation has not yet been fully determined, but
management does not believe it will be material.
FDICIA also contains a variety of other provisions that may affect the
operations of the Corporation, including new reporting requirements, revised
regulatory standards for real estate lending, "truth in savings" provisions, and
the requirement that a depository institution give 90 days' notice to customers
and regulatory authorities before closing any branch.
Under other regulations promulgated under FDICIA a bank cannot accept
brokered deposits (that is, deposits obtained through a person engaged in the
business of placing deposits with insured depository institutions or with
interest rates significantly higher than prevailing market rates) unless (i) it
is "well capitalized" or (ii) it is "adequately capitalized" and receives a
waiver from the FDIC. A bank that cannot receive brokered deposits also cannot
offer "pass-through" insurance on certain employee benefit accounts, unless it
provides certain notices to affected depositors. In addition, a bank that is
"adequately capitalized" and that has not received a waiver from the FDIC may
not pay an interest rate on any deposits in excess of 75 basis points over
certain prevailing market rates. There are no such restrictions on a bank that
is "well capitalized." At June 30, 1995, all of the Corporation's banking
subsidiaries were well capitalized and therefore were not subject to these
restrictions.
FDIC INSURANCE
Effective January 1, 1993, the deposit insurance assessment rate for the
Bank Insurance Fund ("BIF") increased as part of the adoption by the FDIC of a
transitional risk-based assessment system. In June 1993, the FDIC published
final regulations making the transitional system permanent effective January 1,
1994, but left open the possibility that it may consider expanding the range
between the highest and lowest assessment rates at a later date. An
institution's risk category is based upon whether the institution is well
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capitalized, adequately capitalized, or less than adequately capitalized. Each
insured depository institution is also to be assigned to one of the following
"supervisory subgroups": Subgroup A, B, or C. Subgroup A institutions are
financially sound institutions with few minor weaknesses; Subgroup B
institutions are institutions that demonstrate weaknesses which, if not
corrected, could result in significant deterioration; and Subgroup C
institutions are institutions for which there is a substantial probability that
the FDIC will suffer a loss in connection with the institution unless effective
action is taken to correct the areas of weakness. Based on its capital and
supervisory subgroups, each BIF member institution was assigned an annual FDIC
assessment rate ranging from 23 cents per $100 of domestic deposits (for well
capitalized Subgroup A institutions) to 31 cents (for undercapitalized Subgroup
C institutions). Adequately capitalized institutions were assigned assessment
rates ranging from 26 cents to 30 cents. The FDIC has issued regulations that,
effective September 30, 1995, assign an annual FDIC assessment rate for BIF
member institutions ranging from 4 cents per $100 of domestic deposits (for well
capitalized Subgroup A institutions) to 31 cents (for undercapitalized Subgroup
C institutions). The Corporation incurred $79.2 million of FDIC insurance
expense in 1994.
USE OF PROCEEDS
Unless otherwise specified in an applicable Prospectus Supplement, the net
proceeds to be received by the Corporation from the sale of the Offered
Securities offered hereby will be added to the general funds of the Corporation
and will be available for general corporate purposes, including investments in
or advances to existing or future subsidiaries, repayment of maturing
obligations and redemption of outstanding indebtedness. Pending such use, the
Corporation may temporarily invest the net proceeds or use them to reduce
short-term indebtedness.
RATIOS OF EARNINGS TO FIXED CHARGES
AND TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following are the consolidated ratios of earnings to fixed charges and
to combined fixed charges and preferred stock dividends for the six-month
periods ended June 30, 1995 and 1994, and each of the years in the five-year
period ended December 31, 1994:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30 YEAR ENDED DECEMBER 31
------------ --------------------------------
1995 1994 1994 1993 1992 1991 1990
----- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges:
Excluding interest on
deposits................ 2.10x 2.75 2.52 2.39 2.01 1.70 1.34
Including interest on
deposits................ 1.58x 1.78 1.72 1.59 1.39 1.22 1.12
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends:
Excluding interest on
deposits................ 2.00x 2.59 2.39 2.23 1.88 1.64 1.34
Including interest on
deposits................ 1.54x 1.73 1.68 1.55 1.35 1.21 1.12
</TABLE>
For purposes of computing the ratios of earnings to fixed charges, income
before income taxes plus fixed charges less capitalized interest has been
divided by fixed charges. For purposes of computing the ratios of earnings to
combined fixed charges and preferred stock dividends, income before income taxes
plus fixed charges less capitalized interest has been divided by fixed charges
and pretax earnings required to cover preferred stock dividends. Fixed charges,
excluding interest on deposits, consist of interest on short-term borrowings and
long-term debt, amortization of debt expense, capitalized interest and one-third
of net rental expense (which is deemed representative of the interest factor).
Fixed charges, including interest on deposits, consist of the foregoing items
plus interest on deposits. Pretax earnings required to cover preferred stock
dividends have been computed by dividing preferred stock dividends by one minus
the Corporation's income tax rate.
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DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities.
The Senior Securities are to be issued under an Indenture (the "Senior
Indenture") between the Corporation and the trustee named in the applicable
Prospectus Supplement as trustee (the "Senior Trustee"). The Subordinated
Securities are to be issued under an Indenture (the "Subordinated Indenture")
between the Corporation and the trustee named in the applicable Prospectus
Supplement as trustee (the "Subordinated Trustee," and together with the Senior
Trustee, the "Trustees"). The forms of the Senior Indenture and the Subordinated
Indenture (collectively, the "Indentures") are exhibits to the Registration
Statement. The following summaries of certain provisions of the Indentures do
not purport to be complete and are qualified in their entirety by reference to
the provisions of the Indentures. Numerical references in parentheses below are
to sections of the Indentures. Wherever particular sections or defined terms of
the Indentures are referred to, it is intended that such sections or defined
terms shall be incorporated herein by reference. Unless otherwise indicated,
capitalized terms shall have the meanings ascribed to them in the Indentures.
GENERAL
The amount of Debt Securities offered by this Prospectus will be limited to
the amount set forth on the cover of this Prospectus. Each Indenture provides
that Debt Securities in an unlimited amount may be issued thereunder from time
to time in one or more series. (SECTION 301)
The Senior Securities will be unsecured and will rank PARI PASSU with other
unsecured Senior Debt of the Corporation. The Subordinated Securities will be
unsecured and will rank PARI PASSU with other subordinated debt of the
Corporation and, together with such other subordinated debt, will be
subordinated and junior in right of payment to the prior payment in full of the
Senior Debt of the Corporation as described below under "Subordination."
Reference is hereby made to the Prospectus Supplement relating to the
particular series of Debt Securities for the terms of such Debt Securities,
including, where applicable, (i) the designation and any limit on the aggregate
principal amount of such Debt Securities; (ii) the price (expressed as a
percentage of the aggregate principal amount thereof) at which such Debt
Securities will be issued; (iii) the date or dates on which such Debt Securities
will mature or method by which such dates can be determined; (iv) the currency
or currencies in which such Debt Securities are being sold and are denominated
and the circumstances, if any, under which any Debt Securities may be payable in
a currency other than the currency in which such Debt Securities are
denominated, and if so, the exchange rate, the exchange rate agent and, if the
Holder of any such Debt Securities may elect the currency in which payments
thereon are to be made, the manner of such election; (v) the denominations in
which any Debt Securities which are Registered Securities will be issuable, if
other than denominations of $1,000 and any integral multiple thereof, and the
denomination or denominations in which any Debt Securities which are Bearer
Securities will be issuable, if other than the denomination of $5,000; (vi) the
rate or rates (which may be fixed or variable) at which such Debt Securities
will bear interest, which rate may be zero in the case of certain Debt
Securities issued at an issue price representing a discount from the principal
amount payable at maturity; (vii) the date from which interest on such Debt
Securities will accrue, the dates on which such interest will be payable or
method by which such dates can be determined, the date on which payment of such
interest will commence and the circumstances, if any, in which the Corporation
may defer interest payments; (viii) the dates on which, and the price or prices
at which, such Debt Securities will, pursuant to any mandatory sinking fund
provision, or may, pursuant to any optional redemption or required repayment
provisions, be redeemed or repaid and the other terms and provisions of any such
optional redemption or required repayment; (ix) in the case of the Subordinated
Securities, any terms by which such securities may be convertible into Common
Stock (see
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"DESCRIPTION OF COMMON STOCK"), Preferred Shares (see "DESCRIPTION OF PREFERRED
SHARES") or Depositary Shares (see "DESCRIPTION OF DEPOSITARY SHARES") of the
Corporation and, in case of Subordinated Securities convertible into Preferred
Shares or Depositary Shares, the terms of such Preferred Shares or Depositary
Shares; (x) whether such Debt Securities are to be issuable as Bearer Securities
and/or Registered Securities and, if issuable as Bearer Securities, the terms
upon which any Bearer Securities may be exchanged for Registered Securities;
(xi) whether such Debt Securities are to be issued in the form of one or more
temporary or permanent Global Securities and, if so, the identity of the
depositary for such Global Security or Securities; (xii) if a temporary global
Debt Security is to be issued with respect to such series, the extent to which,
and the manner in which, any interest thereon payable on an interest payment
date prior to the issuance of a permanent Global Security or definitive Bearer
Securities will be credited to the accounts of the persons entitled thereto on
such interest payment date; (xiii) if a temporary Global Security is to be
issued with respect to such series, the terms upon which interests in such
temporary Global Security may be exchanged for interests in a permanent Global
Security or for definitive Debt Securities of the series and the terms upon
which interests in a permanent Global Security, if any, may be exchanged for
definitive Debt Securities of the series; (xiv) any additional restrictive
covenants included for the benefit of Holders of such Debt Securities; (xv) any
additional Events of Default provided with respect to such Debt Securities;
(xvi) information with respect to book-entry procedures, if any; (xvii) whether
the Debt Securities will be repayable at the option of the Holder; (xviii) any
other terms of the Debt Securities not inconsistent with the provisions of the
applicable Indenture; (xix) the right of the Corporation to defease the Debt
Securities or certain covenants under the Indentures; and (xx) the terms of any
securities being offered together with or separately from the Debt Securities.
Such Prospectus Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Debt Securities and certain
United States federal income tax consequences and any risk factors or other
special considerations applicable to such series of Debt Securities. If a Debt
Security is denominated in a foreign currency, such Debt Security may not trade
on a U.S. national securities exchange unless and until the Commission has
approved appropriate rule changes pursuant to the Securities Act to accommodate
the trading of such Debt Security.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Unless otherwise indicated in the Prospectus
Supplement, Bearer Securities other than Bearer Securities in temporary or
permanent global form will have interest coupons attached. (SECTION 201) Each
Indenture also provides that Bearer Securities or Registered Securities of a
series may be issuable in permanent global form. (SECTION 203) See "Permanent
Global Securities."
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of authorized denominations and of a
like aggregate principal amount, tenor and terms. In addition, if Debt
Securities of any series are issuable as both Registered Securities and Bearer
Securities, at the option of the Holder upon request confirmed in writing, and
subject to the terms of the applicable Indenture, Bearer Securities (with all
unmatured coupons, except as provided below, and all matured coupons in default)
of such series will be exchangeable into Registered Securities of the same
series of any authorized denominations and of a like aggregate principal amount,
tenor and terms. Bearer Securities surrendered in exchange for Registered
Securities between the close of business on a Regular Record Date or a Special
Record Date and the relevant date for payment of interest shall be surrendered
without the coupon relating to such date for payment of interest, and interest
will not be payable in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of such coupon when
due in accordance with the terms of the applicable Indenture. Bearer Securities
will not be issued in exchange for Registered Securities. (SECTION 305) Each
Bearer Security, other than a temporary global Bearer Security, and each
interest coupon will bear the following legend: "Any United States Person who
holds this obligation will be subject to limitations under the United States
federal income tax laws including the limitations provided in Sections 165(j)
and 1287(a) of the Internal Revenue Code."
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Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (duly
endorsed or accompanied by a satisfactory written instrument of transfer), at
the office of the Security Registrar or at the office of any transfer agent
designated by the Corporation for such purpose with respect to such series of
Debt Securities, without service charge and upon payment of any taxes and other
governmental charges. (SECTION 305) If the applicable Prospectus Supplement
refers to any transfer agent (in addition to the Security Registrar) initially
designated by the Corporation with respect to any series of Debt Securities, the
Corporation may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent (or
Security Registrar) acts, except that, if Debt Securities of a series are
issuable solely as Registered Securities, the Corporation will be required to
maintain a transfer agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Securities, the Corporation will
be required to maintain (in addition to the Security Registrar) a transfer agent
in a Place of Payment for such series located outside the United States. The
Corporation may at any time designate additional transfer agents with respect to
any series of Debt Securities. (SECTION 1002)
The Corporation shall not be required (i) to issue, register the transfer of
or exchange Debt Securities of any particular series to be redeemed for a period
of 15 days preceding the first publication of the relevant notice of redemption
or, if Registered Securities are outstanding and there is no publication, the
mailing of the relevant notice of redemption, (ii) to register the transfer of
or exchange any Registered Security so selected for redemption in whole or in
part, except the unredeemed portion of any Registered Security being redeemed in
part, or (iii) to exchange any Bearer Security so selected for redemption except
that such a Bearer Security may be exchanged for a Registered Security of like
tenor and terms of that series, provided that such Registered Security shall be
surrendered for redemption. (SECTION 305) Additional information regarding
restrictions on the issuance, exchange and transfer of and special United States
federal income tax considerations relating to Bearer Securities will be set
forth in the applicable Prospectus Supplement.
TEMPORARY GLOBAL SECURITIES
If so specified in the applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series which are issuable as Bearer Securities will
initially be represented by one or more temporary Global Securities, without
interest coupons, to be deposited with a common depositary in London for Morgan
Guaranty Trust Corporation of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear") and Cedel S.A. ("Cedel") for credit to designated
accounts. On and after the date determined as provided in any such temporary
Global Security and described in the applicable Prospectus Supplement, but
within a reasonable time, each such temporary Global Security will be
exchangeable for definitive Bearer Securities, definitive Registered Securities
or all or a portion of a permanent global Bearer Security, or any combination
thereof, as specified in such Prospectus Supplement. No definitive Bearer
Security or permanent global Bearer Security delivered in exchange for a portion
of a temporary Global Security shall be mailed or otherwise delivered to any
location in the United States in connection with such exchange.
Additional information regarding restrictions on and special United States
federal income tax consequences relating to temporary Global Securities will be
set forth in the Prospectus Supplement relating thereto.
PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent global form,
the applicable Prospectus Supplement will describe the circumstances, if any,
under which beneficial owners of interests in any such permanent Global Security
may exchange such interests for Debt Securities of such series and of like tenor
and principal amount of any authorized form and denomination. Principal of and
any premium and interest on a permanent Global Security will be payable in the
manner described in the Prospectus Supplement relating thereto.
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PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payments
of principal of and premium, if any, and interest, if any, on Bearer Securities
will be payable in the currency designated in the Prospectus Supplement, subject
to any applicable laws and regulations, at such paying agencies outside the
United States as the Corporation may appoint from time to time. Unless otherwise
provided in the Prospectus Supplement, such payments may be made, at the option
of the Holder, by a check in the designated currency or by transfer to an
account in the designated currency maintained by the payee with a bank located
outside the United States. Unless otherwise indicated in the applicable
Prospectus Supplement, payment of interest on Bearer Securities on any Interest
Payment Date will be made only against surrender of the coupon relating to such
Interest Payment Date to a paying agent outside the United States. (SECTION
1001) No payment with respect to any Bearer Security will be made at any office
or paying agency maintained by the Corporation in the United States nor will any
such payment be made by transfer to an account, or by mail to an address, in the
United States. Notwithstanding the foregoing, payments of principal of and
premium, if any, and interest, if any, on Bearer Securities denominated and
payable in U.S. dollars will be made in U.S. dollars at an office or agency of,
and designated by, the Corporation located in the United States, if payment of
the full amount thereof in U.S. dollars at all paying agencies outside the
United States is illegal or effectively precluded by exchange controls or other
similar restrictions, and the Trustee receives an opinion of counsel that such
payment within the United States is legal. (SECTION 1002) As used in the
Prospectus, "United States" means the United States of America (including the
States and the District of Columbia) and its possessions.
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and premium, if any, and interest, if any, on a Registered
Security will be payable in the currency designated in the Prospectus
Supplement, and interest will be payable at the office of such paying agent or
paying agents as the Corporation may appoint from time to time, except that at
the option of the Corporation payment of any interest may be made by a check in
such currency mailed to the Holder at such Holder's registered address or by
wire transfer to an account in such currency designated by such Holder in
writing not less than ten days prior to the date of such payment. Unless
otherwise indicated in the applicable Prospectus Supplement, payment of any
installment of interest on a Registered Security will be made to the Person in
whose name such Registered Security is registered at the close of business on
the Regular Record Date for such payments. (SECTION 307) Unless otherwise
indicated in the applicable Prospectus Supplement, principal payable at maturity
will be paid to the registered holder upon surrender of the Registered Security
at the office of a duly appointed paying agent.
The paying agents outside the United States initially appointed by the
Corporation for a series of Debt Securities will be named in the applicable
Prospectus Supplement. The Corporation may terminate the appointment of any of
the paying agents from time to time, except that the Corporation will maintain
at least one paying agent outside the United States so long as any Bearer
Securities are outstanding where Bearer Securities may be presented for payment
and may be surrendered for exchange, provided that so long as any series of Debt
Securities is listed on The Stock Exchange of the United Kingdom and the
Republic of Ireland or the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, the
Corporation will maintain a paying agent in London or Luxembourg or any other
required city located outside the United States, as the case may be, for such
series of Debt Securities. (SECTION 1002)
All moneys paid by the Corporation to a paying agent for the payment of
principal of or premium, if any, or interest, if any, on any Debt Security that
remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will, at request of the Corporation,
be repaid to the Corporation, and the Holder of such Debt Security or any coupon
appertaining thereto will thereafter look only to the Corporation for payment
thereof. (SECTION 1003)
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COVENANTS CONTAINED IN INDENTURES
The Senior Indenture provides that the Corporation will not, and will not
permit any Subsidiary to, sell or otherwise dispose of, or permit any Principal
Subsidiary Bank (defined as any Subsidiary Bank having total assets in excess of
10% of the total consolidated assets of the Corporation and its Subsidiaries) to
issue, shares of Capital Stock (defined as outstanding shares of stock of any
class), or securities convertible into Capital Stock, of any Principal
Subsidiary Bank, or any Subsidiary owning, directly or indirectly, in whole or
in part, Capital Stock of a Principal Subsidiary Bank, with the following
exceptions: (i) sales of directors' qualifying shares; (ii) sales or other
dispositions for fair market value if, after giving effect to such disposition
and to the issuance of any shares issuable upon conversion or exchange of
securities convertible or exchangeable into Capital Stock, the Corporation would
own directly or indirectly through Subsidiaries not less than 80% of the shares
of each class of Capital Stock of such Principal Subsidiary Bank; (iii) sales or
other dispositions or issuances made in compliance with an order or direction of
a court or regulatory authority of competent jurisdiction; or (iv) sales of
Capital Stock by any Principal Subsidiary Bank to its stockholders where the
sale does not reduce the percentage of shares of the same class owned by the
Corporation. (SECTION 1005 OF THE SENIOR INDENTURE) At the date hereof, the only
Subsidiary Banks which are Principal Subsidiary Banks are Norwest Bank
Minnesota, National Association, Norwest Bank Iowa, National Association, and
Norwest Bank Colorado, National Association.
The Subordinated Indenture does not contain the foregoing covenant.
The Corporation is not restricted by the Indentures from incurring, assuming
or becoming liable for any type of debt or other obligations, from creating
liens on its property for any purpose or from paying dividends or making
distributions on its capital stock or purchasing or redeeming its capital stock.
The Indentures do not require the maintenance of any financial ratios or
specified levels of net worth or liquidity. In addition, the Indentures do not
contain any provision which would require the Corporation to repurchase or
redeem or otherwise modify the terms of any of its Debt Securities upon a change
in control or other events involving the Corporation which may adversely affect
the creditworthiness of the Debt Securities.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Corporation may not consolidate with or merge with or into, or transfer
or lease its assets substantially as an entirety to, any Person unless (i) the
successor Person is a corporation organized and validly existing under the laws
of a domestic jurisdiction and expressly assumes the Corporation's obligations
on the Debt Securities and under the applicable Indenture; and (ii) after giving
effect to the transaction no Event of Default, and no event which, after notice
or lapse of time, or both, would become an Event of Default, shall have occurred
and be continuing. (SECTION 801)
MODIFICATION AND WAIVER
Except as to certain modifications and amendments not adverse to Holders of
Debt Securities, modifications and amendments of and waivers of compliance with
certain restrictive provisions under each Indenture may be made only with the
consent of the Holders of not less than 66 2/3% in principal amount of the
Outstanding Debt Securities of each series thereunder affected by such
modification, amendment or waiver; provided that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security or coupon affected thereby, (i) change the Stated Maturity of the
principal or any installment of principal or any installment of interest, if
any; (ii) reduce the amount of principal or interest thereon, or any premium
payable upon redemption or repayment thereof or in the case of an Original Issue
Discount Security the amount of principal payable upon acceleration of the
Maturity thereof; (iii) change the place of payment or the currency in which
principal or interest is payable, if any; (iv) impair the right to institute
suit for the enforcement of any payment of the principal, premium, if any, and
interest, if any, or adversely affect the right of repayment, if any, at the
option of the Holder; (v) reduce the percentage in principal amount of
Outstanding Debt Securities of any series, the consent of whose Holders is
required for modification or amendment of the applicable Indenture or for waiver
of compliance with certain provisions of the applicable Indenture or for waiver
of certain defaults; (vi) reduce the requirements contained in the
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applicable Indenture for quorum or voting; (vii) in the case of Subordinated
Securities convertible into Common Stock, impair any right to convert such
Subordinated Securities; or (viii) modify any of the above provisions. (SECTION
902)
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series issued thereunder if Debt Securities of that series
are issuable in whole or in part as Bearer Securities. (SECTION 1401 OF THE
SENIOR INDENTURE, SECTION 1601 OF THE SUBORDINATED INDENTURE) A meeting may be
called at any time by the Trustee for such Debt Securities, or upon the request
of the Corporation or the Holders of at least 10% in principal amount of the
Outstanding Debt Securities of such series, in any such case upon notice given
in accordance with the Indenture with respect thereto. (SECTION 1402 OF THE
SENIOR INDENTURE, SECTION 1602 OF THE SUBORDINATED INDENTURE) Except as limited
by the proviso in the preceding paragraph, any resolution presented at a meeting
or adjourned meeting at which a quorum is present may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series; provided, however, that, except as
limited by the proviso in the preceding paragraph, any resolution with respect
to any consent or waiver which may be given by the Holders of not less than
66 2/3% in principal amount of the Outstanding Debt Securities of a series
issued under an Indenture may be adopted at a meeting or an adjourned meeting at
which a quorum is present only by the affirmative vote of the Holders of 66 2/3%
in principal amount of such Outstanding Debt Securities of that series; and
provided, further, that, except as limited by the proviso in the preceding
paragraph, any resolution with respect to any demand, consent, waiver or other
action which may be made, given or taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Debt Securities of a series issued under an Indenture may be adopted
at a meeting or adjourned meeting at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Debt Securities of that series. (SECTION 1404 OF THE SENIOR
INDENTURE, SECTION 1604 OF THE SUBORDINATED INDENTURE)
Any resolution passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with the applicable Indenture
with respect thereto will be binding on all Holders of Debt Securities of that
series and the related coupons issued under that Indenture. The quorum at any
meeting of Holders of a series of Debt Securities called to adopt a resolution,
and at any reconvened meeting, will be persons holding or representing a
majority in principal amount of the Outstanding Debt Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which may be given by the Holders of not less
than 66 2/3% in principal amount of the Outstanding Debt Securities of a series,
the Persons holding or representing 66 2/3% in principal amount of the
Outstanding Debt Securities of such series issued under that Indenture will
constitute a quorum. (SECTION 1404 OF THE SENIOR INDENTURE, SECTION 1604 OF THE
SUBORDINATED INDENTURE)
EVENTS OF DEFAULT
Unless otherwise provided in the applicable Prospectus Supplement, any
series of Senior Securities issued under the Senior Indenture will provide that
the following shall constitute Events of Default with respect to such series:
(i) default in payment of principal of or premium, if any, on any Senior
Security of such series when due; (ii) default for 30 days in payment of
interest, if any, on any Senior Security of such series or related coupon, if
any, when due; (iii) default in the deposit of any sinking fund payment on any
Senior Security of such series when due; (iv) default in the performance of
certain covenants contained in such Indenture; (v) default in the performance of
any other covenant in such Indenture, continued for 90 days after written notice
thereof by the Trustee thereunder or the Holders of at least 25% in principal
amount of the Outstanding Senior Securities of such series issued under that
Indenture; and (vi) certain events of bankruptcy, insolvency or reorganization
of the Corporation. (SECTION 501 OF THE SENIOR INDENTURE)
Unless otherwise provided in the applicable Prospectus Supplement, any
series of Subordinated Securities issued under the Subordinated Indenture will
provide that the only Event of Default will be certain events of bankruptcy of
the Corporation. (SECTION 501 OF THE SUBORDINATED INDENTURE) Unless specifically
stated in the applicable Prospectus Supplement for a particular series of
Subordinated Securities, there is no right of acceleration of the payment of
principal of the Subordinated Securities upon a default in the
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payment of principal, premium, if any, or interest, if any, or in the
performance of any covenant or agreement in the Subordinated Securities or
Subordinated Indenture. In the event of a default in the payment of principal,
premium, if any, or interest, if any, or the performance of any covenant or
agreement in the Subordinated Securities or Subordinated Indenture, the Trustee,
subject to certain limitations and conditions, may institute judicial
proceedings to enforce payment of such principal, premium, if any, or interest,
if any, or to obtain the performance of such covenant or agreement or any other
proper remedy. (SECTION 503 OF THE SUBORDINATED INDENTURE)
The Corporation is required to file with each Trustee annually an Officers'
Certificate concerning the absence of certain defaults under the terms of the
Indentures. (SECTION 1007 OF THE SENIOR INDENTURE, SECTION 1004 OF THE
SUBORDINATED INDENTURE) Each Indenture provides that if an Event of Default
specified therein shall occur and be continuing, either the Trustee thereunder
or the Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series issued under that Indenture may declare the principal
of all such Debt Securities (or in the case of Original Issue Discount
Securities, such portion of the principal amount thereof as may be specified in
the terms thereof) to be due and payable. (SECTION 502) In certain cases, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series may, on behalf of the Holders of all Debt Securities of any such
series and any related coupons, waive any past default or Event of Default
except a default (i) in payment of the principal of or premium, if any, or
interest, if any, on any of the Debt Securities of such series and (ii) in
respect of a covenant or provision of the Indenture which cannot be modified or
amended without the consent of the Holder of each Outstanding Debt Security of
such series or coupon affected. (SECTION 513)
Each Indenture contains a provision entitling the Trustee thereunder,
subject to the duty of such Trustee during default to act with the required
standard of care, to be indemnified by the Holders of the Debt Securities of any
series thereunder or any related coupons before proceeding to exercise any right
or power under such Indenture with respect to such series at the request of such
Holders. (SECTION 603) Each Indenture provides that no Holder of any Debt
Securities of any series thereunder or any related coupons may institute any
proceeding, judicial or otherwise, to enforce such Indenture except in the case
of failure of the Trustee thereunder, for 60 days, to act after it is given
notice of default, a request to enforce such Indenture by the Holders of not
less than 25% in aggregate principal amount of the Outstanding Debt Securities
of such series and an offer of reasonable indemnity. (SECTION 507) This
provision will not prevent any Holder of Debt Securities or any related coupons
from enforcing payment of the principal thereof and premium, if any, and
interest, if any, thereon at the respective due dates thereof. (SECTION 508) The
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of any series issued under an Indenture may direct the time, method
and place of conducting any proceedings for any remedy available to the Trustee
for such Debt Securities or exercising any trust or power conferred on it with
respect to the Debt Securities of such series. However, such Trustee may refuse
to follow any direction that conflicts with law or the Indenture under which it
serves or which would be unjustly prejudicial to Holders not joining therein.
(SECTION 512)
Each Indenture provides that the Trustee thereunder will give to the Holders
of Debt Securities notice of a default if not cured or waived, but, except in
the case of a default in the payment of principal of or premium, if any, or
interest, if any, on any Debt Securities of such series or any related coupons
or in the payment of any sinking fund installment with respect to Debt
Securities of such series or in the exchange of Capital Securities for Debt
Securities of such series, the Trustee for such Debt Securities shall be
protected in withholding such notice if it determines in good faith that the
withholding of such notice is in the interest of the Holders of such Debt
Securities. (SECTION 602)
DEFEASANCE AND DISCHARGE
The Corporation may be discharged from any and all obligations in respect of
the Debt Securities of any series (except for certain obligations relating to
temporary Debt Securities and exchange of Debt Securities, registration of
transfer or exchange of Debt Securities of such series, replacement of stolen,
lost or mutilated Debt Securities of such series, maintenance of paying
agencies, to hold monies for payment in trust and
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payment of additional amounts, if any, required in consequence of United States
withholding taxes imposed on payments to non-U.S. persons) upon the deposit with
the Trustee, in trust, of money and/or, to the extent such Debt Securities are
denominated and payable in U.S. dollars only, Eligible Instruments which through
the payment of interest and principal in respect thereof in accordance with
their terms will provide money in an amount sufficient to pay the principal of
(and premium, if any), each installment of interest on, and any mandatory
sinking fund or analogous payments on, the Debt Securities of such series on the
Stated Maturity of such payments in accordance with the terms of the applicable
Indenture and the Debt Securities of such series. Such a trust may be
established only if, among other things, (a) the Corporation has delivered to
the Trustee an Opinion of Counsel to the effect that (i) the Corporation has
received from, or there has been published by, the Internal Revenue Service a
ruling, or (ii) since the date of the applicable lndenture there has been a
change in applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the Holders of
Debt Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge, and will be subject to federal income tax on the same amounts and in
the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred; and (b) the Debt Securities
of such series, if then listed on any domestic or foreign securities exchange,
will not be delisted as a result of such deposit, defeasance and discharge.
(SECTION 403) In the event of any such defeasance and discharge of Debt
Securities of such series, Holders of Debt Securities of such series would be
able to look only to such trust fund for payment of principal of and any premium
and any interest on their Debt Securities until Maturity.
The Corporation may terminate certain of its obligations under each
Indenture with respect to the Debt Securities of any series thereunder,
including its obligations to comply with the covenants described under the
heading "Covenants Contained in lndentures" above, with respect to such Debt
Securities, on the terms and subject to the conditions contained in such
Indentures, by depositing in trust with the Trustee money and/or, to the extent
such Debt Securities are denominated and payable in U.S. dollars only, Eligible
Instruments which, through the payment of principal and interest in accordance
with their terms, will provide money in an amount sufficient to pay the
principal and premium, if any, and interest, if any, on such Debt Securities,
and any mandatory sinking fund, repayment or analogous payments thereon, on the
scheduled due dates therefor. Such deposit and termination is conditioned, among
other things, upon the Corporation's delivery of an opinion of counsel that the
Holders of such Debt Securities will have no federal income tax consequences as
a result of such deposit and termination. Such termination will not relieve the
Corporation of its obligation to pay when due the principal of or interest on
such Debt Securities if such Debt Securities of such series are not paid from
the money or Eligible Instruments held by the Trustee for the payment thereof.
(SECTION 1501 OF THE SENIOR INDENTURE, SECTION 1701 OF THE SUBORDINATED
INDENTURE) The applicable Prospectus Supplement may further describe the
provisions, if any, permitting or restricting such defeasance with respect to
the Debt Securities of a particular series. In the event the Corporation
exercises its option to omit compliance with the covenant described under
"Covenants Contained in Indentures" above with respect to the Debt Securities of
any series as described above and the Debt Securities of such series are
declared due and payable because of the occurrence of any Event of Default, then
the amount of money and Eligible Instruments on deposit with the Trustee will be
sufficient to pay amounts due on the Debt Securities of such series at the time
of their Stated Maturity but may not be sufficient to pay amounts due on the
Debt Securities of such series at the time of the acceleration resulting from
such Event of Default. The Corporation shall in any event remain liable for such
payments as provided in the applicable Indenture.
SUBORDINATION
The Subordinated Securities shall be subordinate and junior in right of
payment, to the extent set forth in the Subordinated Indenture, to all Senior
Debt (as defined below) of the Corporation. In the event that the Corporation
shall default in the payment of any principal, premium, if any, or interest, if
any, on any Senior Debt when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration of acceleration or
otherwise, then, unless and until such default shall have been cured or waived
or shall have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-offs or
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otherwise) shall be made or agreed to be made for principal, premium, if any, or
interest, if any, on the Subordinated Securities, or in respect of any
redemption, repayment, retirement, purchase or other acquisition of any of the
Subordinated Securities. (SECTION 1801 OF THE SUBORDINATED INDENTURE) "Senior
Debt" means any obligation of the Corporation to its creditors, whether now
outstanding or subsequently incurred, other than (i) any obligation as to which
it is provided that such obligation is not Senior Debt and (ii) the Subordinated
Securities. (SECTION 101 OF THE SUBORDINATED INDENTURE) As of June 30, 1995, the
Corporation had approximately $6.0 billion of Senior Debt outstanding.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Corporation, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Corporation, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Corporation for the benefit of creditors or (iv) any
other marshalling of the assets of the Corporation, all Senior Debt (including
any interest thereon accruing after the commencement of any such proceedings)
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made on account of the principal of or
interest on the Subordinated Securities. In such event, any payment or
distribution on account of the principal of or interest on the Subordinated
Securities, whether in cash, securities or other property (other than securities
of the Corporation or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Securities, to the payment of all Senior Debt at the time
outstanding, and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the
Subordinated Securities shall be paid or delivered directly to the holders of
Senior Debt in accordance with the priorities then existing among such holders
until all Senior Debt (including any interest thereon accruing after the
commencement of any such proceedings) shall have been paid in full. (SECTION
1801 OF THE SUBORDINATED INDENTURE)
In the event of any such proceeding, after payment in full of all sums owing
with respect to Senior Debt, the Holders of Subordinated Securities, together
with the holders of any obligations of the Corporation ranking on a parity with
the Subordinated Securities, shall be entitled to be repaid from the remaining
assets of the Corporation the amounts at the time due and owing on account of
unpaid principal, premium, if any, and interest, if any, on the Subordinated
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or obligations of the Corporation ranking junior to the Subordinated
Securities and such other obligations. If any payment or distribution on account
of the principal of or interest on the Subordinated Securities of any character
or any security, whether in cash, securities or other property (other than
securities of the Corporation or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Securities, to the payment of all Senior Debt at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment) shall be received by any Holder of any
Subordinated Securities in contravention of any of the terms of the Subordinated
Indenture and before all the Senior Debt shall have been paid in full, such
payment or distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the holders of the
Senior Debt at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior Debt
remaining unpaid to the extent necessary to pay all such Senior Debt in full.
(SECTION 1801 OF THE SUBORDINATED INDENTURE) By reason of such subordination, in
the event of the insolvency of the Corporation, holders of Senior Debt may
receive more, ratably, and holders of the Subordinated Securities having a claim
pursuant to such securities may receive less, ratably, than the other creditors
of the Corporation. Such subordination will not prevent the occurrence of any
Event of Default in respect of the Subordinated Securities.
The Subordinated Indenture may be modified or amended as provided under
"Modification and Waiver" above, provided that no such modification or amendment
may, without the consent of the holders of
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all Senior Debt outstanding, modify any of the provisions of the Subordinated
Indenture relating to the subordination of the Subordinated Securities and any
related coupons in a manner adverse to such holders. (SECTION 902 OF THE
SUBORDINATED INDENTURE)
CONVERSION OF SUBORDINATED CONVERTIBLE SECURITIES
The Holders of Subordinated Securities of a specified series that are
convertible into Common Stock, Preferred Shares or Depositary Shares of the
Corporation ("Subordinated Convertible Securities") will be entitled at certain
times specified in the applicable Prospectus Supplement, subject to prior
redemption, repayment or repurchase, to convert any Subordinated Convertible
Securities of such series (in denominations set forth in the applicable
Prospectus Supplement) into Common Stock, Preferred Shares or Depositary Shares,
as the case may be, at the conversion price set forth in the applicable
Prospectus Supplement, subject to adjustment as described below and in the
applicable Prospectus Supplement. Except as described below, no adjustment will
be made on conversion of any Subordinated Convertible Securities for interest
accrued thereon or for dividends on any Common Stock, Preferred Shares or
Depositary Shares issued. (SECTION 1903 OF THE SUBORDINATED INDENTURE) If any
Subordinated Convertible Securities not called for redemption or submitted for
repayment are converted between a Regular Record Date for the payment of
interest and the next succeeding Interest Payment Date, such Subordinated
Convertible Securities must be accompanied by funds equal to the interest
payable on such succeeding Interest Payment Date on the principal amount so
converted. (SECTION 1903 OF THE SUBORDINATED INDENTURE) The Corporation is not
required to issue fractional shares of Common Stock upon conversion of
Subordinated Convertible Securities that are convertible into Common Stock and,
in lieu thereof, will pay a cash adjustment based upon the Closing Price (as
defined in the Subordinated Indenture) of the Common Stock on the last business
day prior to the date of conversion. (SECTION 1904 OF THE SUBORDINATED
INDENTURE) In the case of Subordinated Convertible Securities called for
redemption or submitted for repayment, conversion rights will expire at the
close of business on the redemption date or repayment date, as the case may be.
(SECTION 1902 OF THE SUBORDINATED INDENTURE)
Unless otherwise indicated in the applicable Prospectus Supplement, the
conversion price for Subordinated Convertible Securities that are convertible
into Common Stock is subject to adjustment under formulas set forth in the
Subordinated Indenture in certain events, including the issuance of the
Corporation's capital stock as a dividend or distribution on the Common Stock;
subdivisions and combinations of the Common Stock; the issuance to all holders
of Common Stock of certain rights or warrants entitling them to subscribe for or
purchase Common Stock within 45 days after the date fixed for the determination
of the stockholders entitled to receive such rights or warrants, at less than
the current market price (as defined in the Subordinated Indenture); and the
distribution to all holders of Common Stock of evidences of indebtedness or
assets of the Corporation (excluding certain cash dividends and distributions
described in the next paragraph) or rights or warrants (excluding those referred
to above). (SECTION 1906 OF THE SUBORDINATED INDENTURE) In the event that the
Corporation shall distribute any rights or warrants to acquire capital stock
("Capital Stock Rights") pursuant to which separate certificates representing
such Capital Stock Rights will be distributed subsequent to the initial
distribution of such Capital Stock Rights (whether or not such distribution
shall have occurred prior to the date of the issuance of a series of
Subordinated Convertible Securities), such subsequent distribution shall be
deemed to be the distribution of such Capital Stock Rights; provided that the
Corporation may, in lieu of making any adjustment in the conversion price upon a
distribution of separate certificates representing such Capital Stock Rights,
make proper provision so that each Holder of such a Subordinated Convertible
Security who converts such Subordinated Convertible Security (or any portion
thereof) (a) before the record date for such distribution of separate
certificates shall be entitled to receive upon such conversion shares of Common
Stock issued with Capital Stock Rights and (b) after such record date and prior
to the expiration, redemption or termination of such Capital Stock Rights shall
be entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the same number of such Capital Stock
Rights as would a holder of the number of shares of Common Stock that such
Subordinated Convertible Security so converted would have entitled the holder
thereof to acquire in accordance with the terms and provisions applicable to the
Capital Stock Rights
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if such Subordinated Convertible Security were converted immediately prior to
the record date for such distribution. Common Stock owned by or held for the
account of the Corporation or any majority owned subsidiary shall not be deemed
outstanding for the purpose of any adjustment.
No adjustment in the conversion price of Subordinated Convertible Securities
that are convertible into Common Stock will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment in the conversion price of Subordinated Convertible Securities that
are convertible into Common Stock will be required unless such adjustment would
require a change of at least 1% in the conversion price then in effect,
provided, that any such adjustment not so made will be carried forward and taken
into account in any subsequent adjustment; and provided further than any such
adjustment not so made shall be made no later than three years after the
occurrence of the event requiring such adjustment to be made or carried forward.
Notwithstanding any of the foregoing, the issuance of Common Stock under the
Norwest Corporation Dividend Reinvestment and Optional Cash Payment Plan shall
not require an adjustment to the conversion price of Subordinated Convertible
Securities that are convertible into Common Stock. The Corporation reserves the
right to make such reductions in the conversion price in addition to those
required in the foregoing provisions as the Corporation in its discretion shall
determine to be advisable in order that certain stock-related distributions
thereafter made by the Corporation to its stockholders shall not be taxable.
(SECTION 1906 OF THE SUBORDINATED INDENTURE) Except as stated above, the
conversion price will not be adjusted for the issuance of Common Stock or any
securities convertible into or exchangeable for Common Stock, or securities
carrying the right to purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Corporation or (iii) a sale or conveyance
to another corporation of the property and assets of the Corporation as an
entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, securities, other
property or assets (including cash) with respect to, or in exchange for, such
Common Stock, the Holders of the Subordinated Convertible Securities then
outstanding that are convertible into Common Stock will be entitled thereafter
to convert such Subordinated Convertible Securities into the kind and amount of
shares of stock and other securities or property which they would have received
upon such reclassification, change, consolidation, merger, sale or conveyance
had such Subordinated Convertible Securities been converted into Common Stock
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance. (SECTION 1907 OF THE SUBORDINATED INDENTURE)
In the event of a taxable distribution to holders of Common Stock (or other
transaction) which results in any adjustment of the conversion price of
Subordinated Convertible Securities that are convertible into Common Stock, the
Holders of such Subordinated Convertible Securities may, in certain
circumstances, be deemed to have received a distribution subject to United
States income tax as a dividend; in certain other circumstances, the absence of
such an adjustment may result in a taxable dividend to the holders of Common
Stock or such Subordinated Convertible Securities.
DESCRIPTION OF PREFERRED SHARES
The following description of the terms of the Preferred Shares sets forth
certain general terms and provisions of the Preferred Shares to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Shares offered by any Prospectus Supplement will be described in the
Prospectus Supplement relating to such series of the Preferred Shares. If so
indicated in the Prospectus Supplement, the terms of any such series may differ
from the terms set forth below. The description of certain provisions of the
Preferred Shares set forth 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 Certificate of Designations relating to each series of the
Preferred Shares.
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GENERAL
Pursuant to the Corporation's Restated Certificate of Incorporation, as
amended, the Board of Directors of the Corporation has the authority, without
further stockholder action, to issue from time to time a maximum of 5,000,000
shares of preferred stock, without par value ("Preferred Stock"), and a maximum
of 4,000,000 shares of preference stock, without par value ("Preference Stock"),
including shares issued or reserved for issuance, in one or more series and with
such terms and at such times and for such consideration as the Board of
Directors of the Corporation may determine. The authority of the Board of
Directors of the Corporation includes the determination or fixing of the
following with respect to shares of any series thereof: (i) the number of shares
and designation or title thereof; (ii) rights as to dividends; (iii) whether and
upon what terms the shares are to be redeemable; (iv) the rights of the holders
upon the dissolution, or upon the distribution of assets, of the Corporation;
(v) whether and upon what terms the shares shall have a purchase, retirement or
sinking fund; (vi) whether and upon what terms the shares are to be convertible;
(vii) the voting rights, if any, which shall apply, provided that holders of
Preference Stock shall not be entitled to more than one vote per share; and
(viii) any other preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions of such series.
At June 30, 1995, 3,279,666 shares of Preferred Stock and no shares of
Preference Stock were outstanding. Shares of ESOP Preferred Stock, 1995 ESOP
Preferred Stock and Tracking Preferred Stock (as hereinafter defined) purchased,
redeemed or converted by the Corporation shall be retired and cancelled and
restored to the status of authorized but unissued shares of Preferred Stock,
without designation as to series, and may thereafter be issued.
As described under "DESCRIPTION OF DEPOSITARY SHARES," the Corporation 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 the Preferred Shares) in a share of the particular series
of the Preferred Shares issued and deposited with a Depositary (as defined
below).
Under interpretations adopted by the Federal Reserve Board, if the holders
of any series of the Preferred Shares become entitled to vote for the election
of directors because dividends on such series are in arrears as described under
"Voting Rights" below, 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 the Corporation)
may then be subject to regulation as a bank holding company in accordance with
the BHCA. 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 Board to acquire 5% or more of such series, and
any person other than a bank holding company may be required to obtain the prior
approval of the Federal Reserve Board to acquire 10% or more of such series.
The Preferred Shares shall have the dividend, liquidation, redemption,
voting and conversion rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of the Preferred Shares.
Reference is made to the Prospectus Supplement relating to the particular series
of the Preferred Shares offered thereby for specific terms, including (i) the
title, stated value and liquidation preference of such Preferred Shares and the
number of shares offered; (ii) the initial public offering price at which such
Preferred Shares will be issued; (iii) the dividend rate or rates (or method of
calculation), the dividend periods, the dates on which dividends shall be
payable and whether such dividends shall be cumulative or noncumulative and, if
cumulative, the dates from which dividends shall commence to cumulate; (iv) any
redemption or sinking fund provisions; (v) any conversion provisions; (vi)
whether the Corporation has elected to offer Depositary Shares as described
under "DESCRIPTION OF DEPOSITARY SHARES"; and (vii) any additional dividend,
liquidation, redemption, sinking fund and other rights, preferences, privileges,
limitations and restrictions.
The Preferred Shares will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a particular
series of the Preferred Shares, each series of the Preferred Shares will rank on
a parity in all respects with the outstanding shares of the Corporation's
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Preferred Stock and Preference Stock described below and each other series of
the Preferred Shares and will rank senior to the Corporation's Series A Junior
Participating Preferred Stock described below. The Preferred Shares will have no
preemptive rights to subscribe for any additional securities which may be issued
by the Corporation. Unless otherwise specified in the applicable Prospectus
Supplement, Norwest Bank Minnesota, National Association will be the transfer
agent and registrar for the Preferred Shares and any Depositary Shares.
DIVIDENDS
The holders of the Preferred Shares of each series will be entitled to
receive, when, as and if declared by the Board of Directors of the Corporation
or a duly authorized committee thereof, out of funds legally available therefor,
cash dividends at such rates and on such dates as will be set forth in the
Prospectus Supplement relating to such series. 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 set forth in the Prospectus Supplement.
Dividends will be payable to the holders of record as they appear on the stock
books of the Corporation on such record dates as will be fixed by the Board of
Directors of the Corporation or a duly authorized committee thereof.
Dividends on any series of the Preferred Shares may be cumulative or
noncumulative, as provided in the applicable Prospectus Supplement. If the Board
of Directors of the Corporation fails to declare a dividend payable on a
dividend payment date on any series of the Preferred Shares for which dividends
are noncumulative ("Noncumulative Preferred Shares"), then the holders of such
series of the Preferred Shares will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
Corporation will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment dates.
No full dividends will be declared or paid or set apart for payment on any
stock of the Corporation ranking, as to dividends, on a parity with or junior to
the Preferred Shares for any period unless full dividends on the Preferred
Shares of each series (including any accumulated dividends) have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment. When dividends are not paid in full
upon any series of Preferred Shares and any Preferred Stock or Preference Stock
ranking on a parity as to dividends with the Preferred Shares, all dividends
declared or made upon Preferred Shares of each series and any Preferred Stock or
Preference Stock ranking on a parity as to dividends with the Preferred Shares
shall be declared pro rata so that the amount of dividends declared per share on
Preferred Shares of each series and such Preferred Stock and Preference Stock
shall in all cases bear to each other the same ratio that accrued dividends per
share (which, in the case of Noncumulative Preferred Shares, shall not include
any accumulation in respect of unpaid dividends for prior dividend periods) on
shares of each series of the Preferred Shares and such Preferred Stock and
Preference Stock bear to each other. Except as provided in the preceding
sentence, no dividend (other than dividends or distributions paid in shares of,
or options, warrants or rights to subscribe for or purchase shares of, Common
Stock or any other stock of the Corporation ranking junior to the Preferred
Shares as to dividends and upon liquidation) shall be declared or paid or set
aside for payment or other distribution declared or made upon the Common Stock
or any other stock of the Corporation ranking junior to or on a parity with the
Preferred Shares as to dividends or upon liquidation, nor shall any Common Stock
nor any other stock of the Corporation ranking junior to or on a parity with the
Preferred Shares as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
by the Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to the Preferred Shares as to dividends and upon
liquidation) unless, in each case, the full dividends on each series of the
Preferred Shares shall have been paid or declared and set aside for payment. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on any series of the Preferred Shares which may
be in arrears.
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REDEMPTION
A series of the Preferred Shares may be redeemable, in whole or in part, at
the option of the Corporation, and may be subject to mandatory redemption
pursuant to a sinking fund or otherwise, in each case upon terms, at the times
and at the redemption prices set forth in the Prospectus Supplement relating to
such series. Preferred Shares redeemed by the Corporation will be restored to
the status of authorized but unissued shares of Preferred Stock or Preference
Stock, as the case may be.
The Prospectus Supplement relating to a series of the Preferred Shares which
is subject to mandatory redemption will specify the number of shares of such
series of the Preferred Shares which shall be redeemed by the Corporation in
each year commencing after a date to be specified, at a redemption price per
share to be specified, together with an amount equal to all accrued and unpaid
dividends thereon to the date of redemption. The redemption price may be payable
in cash or other property, as specified in the Prospectus Supplement relating to
such series of the Preferred Shares. If the redemption price is payable only
from the net proceeds of the issuance of capital stock of the Corporation, the
terms of such series may provide that, if no such capital stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, the applicable shares of
such series of the Preferred Shares shall automatically and mandatorily be
converted into shares of the applicable capital stock of the Corporation
pursuant to conversion provisions specified in the Prospectus Supplement
relating to such series of the Preferred Shares.
If fewer than all of the outstanding shares of any series of the Preferred
Shares are to be redeemed, the number of shares to be redeemed will be
determined by the Board of Directors of the Corporation and such shares shall be
redeemed pro rata from the holders of record of such shares in proportion to the
number of such shares held by such holders (with adjustments to avoid redemption
of fractional shares).
Notwithstanding the foregoing, if any dividends, including any accumulation,
on Preferred Shares of any series are in arrears, no Preferred Shares of such
series shall be redeemed unless all outstanding Preferred Shares of such series
are simultaneously redeemed, and the Corporation shall not purchase or otherwise
acquire any Preferred Shares of such series; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Shares of
such series pursuant to a purchase or exchange offer provided such offer is made
on the same terms to all holders of such series of the Preferred Shares.
Notice of redemption shall be given by mailing the same to each record
holder of the shares to be redeemed, not less than 40 nor more than 70 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 the Corporation.
Each such notice shall state (i) the redemption date; (ii) the number of shares
and series of the Preferred Shares to be redeemed; (iii) the redemption price;
(iv) the place or places where certificates for such Preferred Shares are to be
surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi) the
date upon which the holder's conversion rights as to such shares, if any, shall
terminate. If fewer than all shares of any series of the Preferred Shares held
by any holder are to be redeemed, the notice mailed to such holder shall also
specify the number of shares to be redeemed from such holder.
If notice of redemption has been given, from and after the redemption date
for the shares of the series of the Preferred Shares called for redemption
(unless default shall be made by the Corporation in providing money for the
payment of the redemption price of the shares so called for redemption),
dividends on the Preferred Shares so called for redemption shall cease to accrue
and such shares shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation (except the right to
receive the redemption price) shall cease. Upon surrender in accordance with
such notice of the certificates representing any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors of the Corporation
shall so require and the notice shall so state), the redemption price set forth
above shall be paid out of funds provided by the Corporation. If fewer than all
of the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
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In the event that a redemption described above is deemed to be a "tender
offer" within the meaning of Rule 14e-1 under the Exchange Act, the Company will
comply with all applicable provisions of the Exchange Act.
CONVERSION
The Prospectus Supplement relating to a series of the Preferred Shares which
is convertible will state the terms on which shares of that series are
convertible into shares of Common Stock or a series of Preferred Stock or
Preference Stock.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of shares of each series of the
Preferred Shares and any Preferred Stock and Preference Stock ranking on a
parity with such series of Preferred Shares upon liquidation will be entitled to
receive out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of the Common
Stock or any other class or series of stock of the Corporation ranking junior to
such series of the Preferred Shares upon liquidation, liquidation distributions
in the amount set forth in the Prospectus Supplement relating to such series of
the Preferred Shares plus an amount equal to the sum of all accrued and unpaid
dividends (whether or not earned or declared) for the then current dividend
period and, if such series of the Preferred Shares is cumulative, for all
dividend periods prior thereto. Neither the sale of all or substantially all of
the property and assets of the Corporation, nor the merger or consolidation of
the Corporation into or with any other corporation nor the merger or
consolidation of any other corporation into or with the Corporation, shall be
deemed to be a dissolution, liquidation or winding up. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation available for distribution to the holders of the
Preferred Shares of any series and any other shares of stock of the Corporation
ranking as to any such distribution on a parity with such series of the
Preferred Shares shall be insufficient to pay in full all amounts to which such
holders are entitled, no such distribution shall be made on account of any
shares of any other series of the Preferred Shares or other securities of the
Corporation ranking as to any such distribution on a parity with the Preferred
Shares of such series upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the Preferred
Shares of such series, ratably, in proportion to the full distributive amounts
for which holders of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up. After payment of the full amount of the
liquidation distribution to which they are entitled, the holders of such series
of the Preferred Shares will have no right or claim to any of the remaining
assets of the Corporation.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of the Preferred Shares, or except as expressly required by
applicable law, the holders of the Preferred Shares will not be entitled to
vote. In the event the Corporation issues shares of a series of the Preferred
Shares, unless otherwise indicated in the Prospectus Supplement relating to such
series, each share will be entitled to one vote on matters on which holders of
such series are entitled to vote. However, as more fully described under
"DESCRIPTION OF DEPOSITARY SHARES," if the Corporation elects to provide for the
issuance of Depositary Shares representing fractional interests in a share of
such series of the Preferred Shares, the holders of each such Depositary Share
will, in effect, be entitled through the Depositary to such fraction of a vote,
rather than a full vote. In the case of any series of Preferred Shares having
one vote per share on matters on which holders of such series are entitled to
vote, the voting power of such series, on matters on which holders of such
series and holders of any other series of Preferred Shares or a series of
Preferred Stock or Preference Stock are entitled to vote as a single class, will
depend on the number of shares in such series, not the aggregate stated value,
liquidation preference or initial offering price of the shares of such series of
the Preferred Shares.
Whenever dividends on any series of the Preferred Shares shall be in arrears
for such number of dividend periods which shall in the aggregate contain not
less than 540 days, the holders of shares of the Preferred Shares of such series
(voting together as a class with holders of shares of any one or more series of
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Preferred Stock or Preference Stock ranking on a parity with the Preferred
Shares either as to dividends or the distribution of assets upon liquidation,
dissolution or winding up and upon which like voting rights have been conferred
and are exercisable and upon which like voting rights have been conferred and
are exercisable) will be entitled to vote for the election of two additional
directors on the terms set forth below and until all past dividends accumulated
on Preferred Shares of such series shall have been paid in full. Each holder of
Preferred Shares of such series will have one vote for each share of stock held
and each other series will have such number of votes, if any, for each share of
stock held as may be granted to them. In such case, the Board of Directors will
be increased by two directors, and the holders of the Preferred Shares of such
series (together with the holders of shares of any one or more series of
Preferred Stock or Preference Stock ranking on such a parity and upon which like
voting rights have been conferred and are exercisable) will have the exclusive
right as members of such class, as outlined above, to elect two directors at the
next annual meeting of stockholders.
So long as any Preferred Shares of any series remain outstanding, the
Corporation will not, without the consent of the holders of the outstanding
Preferred Shares of such series and outstanding shares of all series of
Preferred Stock and Preference Stock ranking on a parity with the Preferred
Shares of such series either as to dividends or the distribution of assets upon
liquidation, dissolution or winding up and upon which like voting rights have
been conferred and are then exercisable, by a vote of at least two-thirds of all
such outstanding Preferred Shares and shares of Preferred Stock and Preference
Stock voting together as a class, given in person or by proxy, either in writing
or at a meeting, (i) authorize, create or issue, or increase the authorized or
issued amount of, any class or series of stock ranking prior to the Preferred
Shares with respect to payment of dividends or the distribution of assets on
liquidation, dissolution or winding up, or (ii) amend, alter or repeal, whether
by merger, consolidation or otherwise, the provisions of the Corporation's
Restated Certificate of Incorporation, as amended, or of the resolutions
contained in a Certificate of Designations for any series of the Preferred
Shares designating such series of the Preferred Shares and the preferences and
relative, participating, optional or other special rights and qualifications,
limitations and restrictions thereof, so as to materially and adversely affect
any right, preference, privilege or voting power of the Preferred Shares or the
holders thereof; provided, however, that any increase in the amount of the
authorized Preferred Stock or Preference Stock or the creation and issuance of
other series of Preferred Stock or Preference Stock, or any increase in the
amount of authorized shares of any series of Preferred Stock or Preference
Stock, in each case ranking on a parity with or junior to the Preferred Shares
with respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up will not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers.
The holders of 10.24% Preferred Stock, ESOP Preferred Stock, 1995 ESOP
Preferred Stock and Tracking Preferred Stock described under "Outstanding
Preferred Stock" below have voting rights similar to those described in this
section.
OUTSTANDING PREFERRED STOCK
The Preferred Shares will rank on a parity in all respects with the
outstanding Preferred Stock and Preference Stock of the Corporation. The Common
Stock of the Corporation, including the Common Stock that may be issued upon
conversion of the Preferred Shares or in exchange for, or upon conversion of,
Subordinated Securities, will be subject to any prior rights of the Preferred
Stock and Preference Stock then outstanding. Therefore, the rights of the
outstanding Preferred Stock, described below, and any Preferred Stock or
Preference Stock that may be subsequently issued, may limit the rights of the
holders of the Preferred Shares and Common Stock of the Corporation. At June 30,
1995, the Corporation had outstanding 1,127,125 shares of 10.24% Cumulative
Preferred Stock (the "10.24% Preferred Stock"), 1,140,875 shares of Cumulative
Convertible Preferred Stock, Series B (the "Series B Preferred Stock"), 13,647
shares of ESOP Cumulative Convertible Preferred Stock (the "ESOP Preferred
Stock"), 43,019 shares of 1995 ESOP Cumulative Convertible Preferred Stock (the
"1995 ESOP Preferred Stock") and 980,000 shares of Cumulative Tracking Preferred
Stock (the "Tracking Preferred Stock"), of which 25,000 shares are held by a
subsidiary of the Corporation. No shares of Preference Stock are currently
outstanding. On July 28, 1995, the Corporation gave notice to the holders of
Series B Preferred Stock that the Series B Preferred Stock would
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be redeemed by the Corporation on September 1, 1995. Pursuant to the terms of
the Series B Preferred Stock, the holders of substantially all of the Series B
Preferred Stock converted such Preferred Stock into Common Stock on or prior to
September 1, 1995. The shares of Series B Preferred Stock that remained
outstanding on September 1, 1995 were redeemed by the Corporation.
10.24% PREFERRED STOCK. The 10.24% Preferred Stock has a stated value of
$100.00 per share. The 10.24% Preferred Stock provides for cumulative quarterly
dividends at the rate of 10.24% per annum calculated as a percentage of the
stated value. The 10.24% Preferred Stock is subject to redemption, in whole or
in part, at the option of the Corporation on and after January 1, 1996, at $
100.00 per share, plus accrued and unpaid dividends.
In the event of voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holders of 10.24% Preferred Stock are entitled to
receive out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of the
Corporation's Common Stock, $100.00 per share, plus accrued and unpaid
dividends. Except as required by law, the holders of 10.24% Preferred Stock are
not entitled to vote, except under the limited circumstances described in
"Voting Rights" above. The 10.24% Preferred Stock is not convertible into shares
of other capital stock, does not have preemptive rights and is not subject to
any sinking fund or other obligation of the Corporation to repurchase or retire
the 10.24% Preferred Stock.
ESOP PREFERRED STOCK. The ESOP Preferred Stock has a stated value of
$1,000.00 per share. The ESOP Preferred Stock provides for cumulative quarterly
dividends at the rate of 9% per annum calculated as a percentage of stated
value. All outstanding shares of ESOP Preferred Stock are held of record by a
trustee acting on behalf of the Norwest Corporation Savings--Investment Plan and
Master Savings Trust, or any successor to such plan (the "Plan"). The ESOP
Preferred Stock is subject to redemption, in whole or in part, at the option of
the Corporation at a price equal to the higher of (i) $1,000.00 per share, plus
accrued and unpaid dividends thereon to the date fixed for redemption, and (ii)
the Fair Market Value (as defined in the Certificate of Designations for the
ESOP Preferred Stock) per share of ESOP Preferred Stock on the date fixed for
redemption.
The ESOP Preferred Stock is mandatorily convertible, without any further
action on the part of the Corporation or the holder thereof, into the
Corporation's Common Stock at the then applicable Conversion Price (as defined
in the Certificate of Designations for the ESOP Preferred Stock) when (i) the
ESOP Preferred Stock is released from the unallocated reserve of the Plan in
accordance with the terms thereof, or (ii) when record ownership of the shares
of ESOP Preferred Stock is transferred to any person other than a successor
trustee under the Plan. In addition, a holder of ESOP Preferred Stock is
entitled, at any time prior to the date fixed for redemption, to convert shares
of ESOP Preferred Stock held by such holder into shares of the Corporation's
Common Stock at the then applicable Conversion Price.
In the event of voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holders of ESOP Preferred Stock are entitled to
receive out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of the
Corporation's Common Stock, $1,000.00 per share, plus accrued and unpaid
dividends. Except as required by law, the holders of ESOP Preferred Stock are
not entitled to vote, except under the limited circumstances described in
"Voting Rights" above. The ESOP Preferred Stock does not have preemptive rights
and is not subject to any sinking fund or other obligation of the Corporation to
repurchase or redeem the ESOP Preferred Stock.
1995 ESOP PREFERRED STOCK. The 1995 ESOP Preferred Stock has a stated value
of $1,000.00 per share. The 1995 ESOP Preferred Stock provides for cumulative
quarterly dividends at the rate of 10% per annum calculated as a percentage of
stated value. All outstanding shares of 1995 ESOP Preferred Stock are held of
record by a trustee acting on behalf of the Plan. The 1995 ESOP Preferred Stock
is subject to redemption, in whole or in part, at the option of the Corporation
at a price equal to the higher of (i) $1,000.00 per share,
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plus accrued and unpaid dividends thereon to the date fixed for redemption, and
(ii) the Fair Market Value (as defined in the Certificate of Designations for
the 1995 ESOP Preferred Stock) per share of 1995 ESOP Preferred Stock on the
date fixed for redemption.
The ESOP Preferred Stock is mandatorily convertible, without any further
action on the part of the Corporation or the holder thereof, into the
Corporation's Common Stock at the then applicable Conversion Price (as defined
in the Certificate of Designations for the 1995 ESOP Preferred Stock) when (i)
the 1995 ESOP Preferred Stock is released from the unallocated reserve of the
Plan in accordance with the terms thereof, or (ii) when record ownership of the
shares of 1995 ESOP Preferred Stock is transferred to any person other than a
successor trustee under the Plan. In addition, a holder of 1995 ESOP Preferred
Stock is entitled, at any time prior to the date fixed for redemption, to
convert shares of 1995 ESOP Preferred Stock held by such holder into shares of
the Corporation's Common Stock at the then applicable Conversion Price.
In the event of voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holders of 1995 ESOP Preferred Stock are entitled to
receive out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of the
Corporation's Common Stock, $1,000.00 per share, plus accrued and unpaid
dividends. Except as required by law, the holders of 1995 ESOP Preferred Stock
are not entitled to vote, except under the limited circumstances described in
"Voting Rights" above. The 1995 ESOP Preferred Stock does not have preemptive
rights and is not subject to any sinking fund or other obligation of the
Corporation to repurchase or redeem the 1995 ESOP Preferred Stock.
TRACKING PREFERRED STOCK. The Tracking Preferred Stock has a stated value
of $200.00 per share. The holders of the Tracking Preferred Stock are also
collectively the assignees of the Corporation's entire beneficial ownership
interest in Class A preferred limited liability company interests (the "Class A
Preferred Securities") of Residential Home Mortgage, L.L.C. (the "Limited
Liability Company").
The Tracking Preferred Stock provides for cumulative annual cash dividends
per share of Tracking Preferred Stock equal to the product of the Dividend Rate
(as defined in the Certificate of Designations for the Tracking Preferred Stock)
and $200.00, payable quarterly. The Dividend Rate is currently 9.3%, and will be
reset on January 1, 2000 and on January 1 of each fifth year thereafter as
described in the Certificate of Designations for the Tracking Preferred Stock.
The Tracking Preferred Stock also provides for certain additional cash
distributions that are based upon the results of operations of the Limited
Liability Company, payable on December 31, 1999 and on December 31 of each fifth
year thereafter. The terms of the Tracking Preferred Stock provide that the
amount of certain dividends distributed or distributions paid to the holders of
Tracking Preferred Stock as assignees of the Corporation's interest in the Class
A Preferred Securities of the Limited Liability Company will reduce dollar for
dollar, respectively, the dividends and distributions to which the holders of
the Tracking Preferred Stock would otherwise be entitled pursuant to the terms
of the Certificate of Designations for the Tracking Preferred Stock.
The Tracking Preferred Stock is subject to redemption, in whole or in part,
at the option of the Corporation, at a per share price equal to the greater of
(i) $200.00 per share, plus accrued and unpaid dividends thereon to the date
fixed for redemption, and (ii) the Fair Market Value of a Per Share Tracking
Interest in the Limited Liability Company (as defined in the Certificate of
Designations for the Tracking Preferred Stock). Subject to certain exceptions
set forth in the Certificate of Designations for the Tracking Preferred Stock,
the Tracking Preferred Stock is not subject to redemption prior to December 31,
1999. Any redemption payments received by a holder of Tracking Preferred Stock
as an assignee of the Corporation's interest in Class A Preferred Securities of
the Limited Liability Company will reduce dollar for dollar the amount of
redemption payments to which the holders of Tracking Preferred Stock would
otherwise be entitled pursuant to the terms of the Certificate of Designations
for the Tracking Preferred Stock.
In the event of voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holders of Tracking Preferred Stock are entitled to
receive out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of the
Corporation's
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Common Stock, a per share amount equal to the greater of (i) $200.00 per share,
plus accrued and unpaid dividends to the date of final distribution, and (ii)
the Fair Market Value of a Per Share Tracking Interest in the Limited Liability
Company. Any liquidation payments received by a holder of Tracking Preferred
Stock as an assignee of the Corporation's interest in Class A Preferred
Securities of the Limited Liability Company will reduce dollar for dollar the
amount to which the holders of the Tracking Preferred Stock would otherwise be
entitled pursuant to the terms of the Certificate of Designations for the
Tracking Preferred Stock, provided that no such reduction shall result from a
payment made prior to December 31, 1999 in connection the voluntary dissolution
of the Limited Liability Company.
Except as required by law, the holders of Tracking Preferred Stock are not
entitled to vote, except under the limited circumstances described in "Voting
Rights" above. The Tracking Preferred Stock does not have preemptive rights and
is not subject to any sinking fund or other obligation of the Corporation to
repurchase or redeem the Tracking Preferred Stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Shares which will
be filed with the Commission at or prior to the time of the offering of such
series of the Preferred Shares.
GENERAL
The Corporation may, at its option, elect to offer fractional interests in
Preferred Shares, rather than full Preferred Shares. In the event such option is
exercised, the Corporation will provide for the issuance by a Depositary to the
public of Depositary Receipts evidencing 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 Shares) in a share of a
particular series of the Preferred Shares as described below.
The shares of any series of the Preferred Shares underlying the Depositary
Shares will be deposited under a separate deposit agreement (the "Deposit
Agreement") between the Corporation and a bank or trust company selected by the
Corporation having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000 (the "Depositary"). The
Prospectus Supplement relating to a series of Depositary Shares will set forth
the name and address of the Depositary. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fractional interest in a Preferred Share underlying such
Depositary Share, to all the rights and preferences of the Preferred Shares
underlying such Depositary Share (including dividend, voting, redemption,
conversion and liquidation rights).
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Corporation, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Corporation's expense.
Upon surrender of the Depositary Receipts at the principal office of the
Depositary in Minneapolis, Minnesota (unless the related Depositary Shares have
previously been called for redemption), the owner of the Depositary Shares
evidenced thereby is entitled to delivery at such office, to or upon his order,
of the number of Preferred Shares and any money or other property represented by
such Depositary Shares. Partial Preferred Shares will not be issued. 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 Preferred Shares 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. Holders of Preferred Shares thus withdrawn
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will not thereafter be entitled to deposit such shares under the Deposit
Agreement or to receive Depositary Shares therefor. The Corporation does not
expect that there will be any public trading market for the Preferred Shares
except as represented by the Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Shares to the record holders
of Depositary Shares relating to such Preferred Shares 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
the Corporation, sell such property and distribute the net proceeds from such
sale to such holders.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Corporation to holders
of the Preferred Shares shall be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Shares 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 Shares 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 Shares. Whenever the Corporation redeems Preferred Shares held
by the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares relating to the Preferred Shares 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
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED SHARES
Upon receipt of notice of any meeting at which the holders of the Preferred
Shares 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 Shares. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Shares) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Shares
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of Preferred Shares underlying such
Depositary Shares in accordance with such instructions, and the Corporation 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 Shares to the extent it does not receive specific instructions from
the holders of Depositary Shares relating to such Preferred Shares.
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TAXATION
Owners of Depositary Shares will be treated for federal income tax purposes
as if they were owners of the Preferred Shares represented by such Depositary
Shares and, accordingly, will be entitled to take into account for federal
income tax purposes income and deductions to which they would be entitled if
they were holders of such Preferred Shares. In addition, (i) no gain or loss
will be recognized for federal income tax purposes upon the withdrawal of
Preferred Shares in exchange for Depositary Shares as provided in the Deposit
Agreement, (ii) the tax basis of each Preferred Share to an exchanging owner of
Depositary Shares will, upon such exchange, be the same as the aggregate tax
basis of the Depositary Shares exchanged therefor, and (iii) the holding period
for the Preferred Shares in the hands of an exchanging owner of Depositary
Shares who held such Depositary Shares as a capital asset at the time of the
exchange thereof for Preferred Shares will include the period during which such
person owned such Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY 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 the Corporation 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 the
Corporation 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 Shares of the relevant series in connection with any
liquidation, dissolution or winding up of the Corporation and such distribution
has been distributed to the holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Corporation will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. The
Corporation will pay charges of the Depositary in connection with the initial
deposit of the Preferred Shares and any redemption of the Preferred Shares.
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 the Corporation which are delivered to the Depositary
and which the Corporation is required to furnish to the holders of the Preferred
Shares.
Neither the Depositary nor the Corporation 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 the Corporation and
the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares or
Preferred Shares unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or information provided by persons
presenting Preferred Shares for deposit, holders of Depositary Shares or other
persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Corporation
notice of its election to do so, and the Corporation may at any time remove the
Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and 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.
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DESCRIPTION OF COMMON STOCK
GENERAL
The Board of Directors of the Corporation is authorized to issue a maximum
of 500,000,000 shares of Common Stock. As of June 30, 1995, 338,450,558 shares
of Common Stock were issued, of which 325,026,015 were outstanding and
13,424,543 were held as treasury shares. Subject to any prior rights of any
Preferred Stock or Preference Stock then outstanding, holders of the Common
Stock are entitled to receive such dividends as are declared by the Board of
Directors of the Corporation out of funds legally available therefor. For
information concerning legal limitations on the ability of the Corporation's
banking subsidiaries to supply funds to the Corporation, see "CERTAIN REGULATORY
MATTERS." Subject to the rights, if any, of any Preferred Stock or Preference
Stock then outstanding, all voting rights are vested in the holders of Common
Stock, each share being entitled to one vote. Subject to any prior rights of any
such Preferred Stock or Preference Stock, in the event of liquidation,
dissolution or winding up of the Corporation, holders of shares of Common Stock
are entitled to receive pro rata any assets distributable to stockholders in
respect of shares held by them. Holders of shares of Common Stock do not have
any preemptive right to subscribe for any additional securities which may be
issued by the Corporation. The outstanding shares of Common Stock are fully paid
and nonassessable. The transfer agent and registrar for the Common Stock is
Norwest Bank Minnesota, National Association. Each share of Common Stock also
includes a right to purchase certain Preferred Stock. See "Rights Agreement"
below.
RIGHTS AGREEMENT
Each share of the Corporation's Common Stock, including those that may be
issued hereunder, is accompanied by one preferred share purchase right (a
"Right"). Once exercisable, each Right entitles the registered holder to
purchase one four-hundredth of a share of the Corporation's Series A Junior
Participating Preferred Stock, without par value (the "Series A Preferred
Stock"). Until a Right is exercised, the holder of a Right, as such, will have
no rights as a stockholder of the Corporation including, without limitation, the
right to vote or receive dividends. The description and terms of the Rights are
set forth in the Rights Agreement, dated as of November 22, 1988, between the
Corporation and Citibank, N.A., as Rights Agent.
The Rights trade automatically with shares of Common Stock and become
exercisable only under the circumstances described below. The Rights are
designed to protect the interests of the Corporation and its stockholders
against coercive takeover tactics. The purpose of the Rights is to encourage
potential acquirors to negotiate with the Corporation's Board of Directors prior
to attempting a takeover and to give the Board leverage in negotiating on behalf
of all stockholders the terms of any proposed takeover. The Rights may, but are
not intended to, deter takeover proposals.
Shares of Series A Preferred Stock purchasable upon exercise of the Rights
will rank junior to all other series of the Corporation's Preferred Stock and
Preference Stock, including the Preferred Shares, and will not be redeemable.
Each share of Series A Preferred Stock will, subject to the rights of senior
securities of the Corporation, including outstanding Preferred Shares, if any,
be entitled to a preferential cumulative quarterly dividend payment equal to the
greater of $1.00 per share or, subject to certain adjustments, 400 times the
dividend declared per share of Common Stock. Upon the liquidation of the
Corporation, the holders of the Series A Preferred Stock will, subject to the
rights of such senior securities, be entitled to a preferential liquidation
payment equal to the greater of $400 per share plus all accrued and unpaid
dividends or 400 times the payment made per share of Common Stock. Finally, in
the event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each share of Series A Preferred Stock will, subject
to the rights of such senior securities, be entitled to receive 400 times the
amount received per share of Common Stock. These rights of the Series A
Preferred Stock are protected by customary antidilution provisions. Each share
of Series A Preferred Stock will have 400 votes, voting together with the Common
Stock.
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The purchase price for each one one-hundredth of a share of Series A
Preferred Stock is $175.00. The purchase price is subject to adjustment upon the
occurrence of certain events, including stock dividends on the Series A
Preferred Stock or issuance of warrants for, or securities convertible on
certain terms into, shares of Series A Preferred Stock. The number of Rights
outstanding and the number of shares of Series A Preferred Stock issuable upon
the exercise of the Rights are subject to adjustment in the event of a stock
split of, or a stock dividend on, Common Stock.
The Rights will become exercisable only if a person or group acquires or
announces an offer to acquire 25% or more of the outstanding shares of Common
Stock. This triggering percentage may be reduced to no less than 15% by the
Board of Directors prior to the time the Rights become exercisable. The Rights
have certain additional features that will be triggered upon the occurrence of
specified events:
1. If a person or group acquires at least the triggering percentage of
Common Stock, the Rights permit holders of the Rights, other than such
person or group, to acquire Common Stock at 50% of market value. However,
this feature will not apply if a person or group which owns less than the
triggering percentage acquires at least 85% of the outstanding shares of
Common Stock pursuant to a cash tender offer for 100% of the outstanding
Common Stock.
2. After a person or group acquires at least the triggering percentage
and before the acquiror owns 50% of the outstanding shares of Common Stock,
the Board of Directors may exchange each Right, other than Rights owned by
such acquiror, for one share of Common Stock or one four-hundredth of a
share of Series A Preferred Stock.
3. In the event of certain business combinations involving the
Corporation or the sale of 50% or more of the assets or earning power of the
Corporation, the Rights permit holders of the Rights to purchase the stock
of the acquiror at 50% of market value.
At any time prior to the acquisition by a person or group of the triggering
percentage or more of the outstanding shares of Common Stock, the Board of
Directors may redeem the Rights in whole, but not in part, at a price of $.0025
per Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise such Rights will terminate and the only
remaining right of the holders of Rights will be to receive the Redemption
Price.
The Rights will expire on November 23, 1998, unless extended or earlier
redeemed by the Corporation. Generally, the terms of the Rights may be amended
by the Board of Directors without the consent of the holders of the Rights.
DESCRIPTION OF SECURITIES WARRANTS
The Corporation may issue Securities Warrants for the purchase of Debt
Securities, Preferred Shares, Depositary Shares or Common Stock. Securities
Warrants may be issued independently or together with Debt Securities, Preferred
Shares or Depositary Shares offered by any Prospectus Supplement and may be
attached to or separate from such Debt Securities, Preferred Shares or
Depositary Shares. Each series of Securities Warrants will be issued under a
separate warrant agreement (a "Securities Warrant Agreement") to be entered into
between the Corporation and a bank or trust company, as Securities Warrant
Agent, all as set forth in the Prospectus Supplement relating to the particular
issue of offered Securities Warrants. The Securities Warrant Agent will act
solely as an agent of the Corporation in connection with the Securities Warrant
Certificates and will not assume any obligation or relationship of agency or
trust for or with any holders of Securities Warrant Certificates or beneficial
owners of Securities Warrants. Copies of the forms of Securities Warrant
Agreements, including the forms of Securities Warrant Certificates representing
the Securities Warrants, are filed as exhibits to the Registration Statement to
which this Prospectus pertains. The following summaries of certain provisions of
the forms of Securities Warrant Agreements and Securities
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Warrant Certificates do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
Securities Warrant Agreements and the Securities Warrant Certificates.
GENERAL
If Securities Warrants are offered, the applicable Prospectus Supplement
will describe the terms of such Securities Warrants, including, in the case of
Securities Warrants for the purchase of Debt Securities, the following where
applicable: (i) the offering price; (ii) the currencies in which such Securities
Warrants are being offered; (iii) the designation, aggregate principal amount,
currencies, denominations and terms of the series of Debt Securities purchasable
upon exercise of such Securities Warrants; (iv) the designation and terms of any
series of Debt Securities, Preferred Shares or Depositary Shares with which such
Securities Warrants are being offered and the number of such Securities Warrants
being offered with each such Debt Security, Preferred Share or Depositary Share;
(v) the date on and after which such Securities Warrants and the related series
of Debt Securities, Preferred Shares or Depositary Shares will be transferable
separately; (vi) the principal amount of the series of Debt Securities
purchasable upon exercise of each such Securities Warrant and the price at which
and currencies in which such principal amount of Debt Securities of such series
may be purchased upon such exercise; (vii) the date on which the right to
exercise such Securities Warrants shall commence and the date (the "Expiration
Date") on which such right shall expire; (viii) whether the Securities Warrants
will be issued in registered or bearer form; (ix) United States federal income
tax consequences; and (x) any other terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of Preferred Shares,
Depositary Shares or Common Stock, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including the following where
applicable: (i) the offering price; (ii) the aggregate number of shares
purchasable upon exercise of such Securities Warrants and, in the case of
Securities Warrants for Preferred Shares or Depositary Shares, the designation,
aggregate number and terms of the series of Preferred Shares purchasable upon
exercise of such Securities Warrants or underlying the Depositary Shares
purchasable upon exercise of such Securities Warrants; (iii) the designation and
terms of the series of Debt Securities, Preferred Shares or Depositary Shares
with which such Securities Warrants are being offered and the number of such
Securities Warrants being offered with each such Debt Security, Preferred Share
or Depositary Share; (iv) the date on and after which such Securities Warrants
and the related series of Debt Securities, Preferred Shares or Depositary Shares
will be transferable separately; (v) the number of Preferred Shares, Depositary
Shares or shares of Common Stock purchasable upon exercise of each such
Securities Warrant and the price at which such number of Preferred Shares or
Depositary Shares of such series or shares of Common Stock may be purchased upon
each exercise; (vi) the date on which the right to exercise such Securities
Warrants shall commence and the Expiration Date; (vii) United States federal
income tax consequences; and (viii) any other terms of such Securities Warrants.
Securities Warrants for the purchase of Preferred Shares, Depositary Shares or
Common Stock will be offered and exercisable for U.S. dollars only and will be
in registered form only.
Securities Warrant Certificates may be exchanged for new Securities Warrant
Certificates of different denominations, may (if in registered form) be
presented for registration of transfer and may be exercised at the corporate
trust office of the Securities Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of Holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal of, premium,
if any, or interest, if any, on the Debt Securities purchasable upon such
exercise or to enforce covenants in the applicable indenture. Prior to the
exercise of any Securities Warrants to purchase Preferred Shares, Depositary
Shares or Common Stock, holders of such Securities Warrants will not have any
rights of holders of the Preferred Shares, Depositary Shares or Common Stock
purchasable upon such exercise, including the right to receive payments of
dividends, if any, on the Preferred Shares, Depositary Shares or Common Stock
purchasable upon such exercise or to exercise any applicable right to vote.
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EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or number of Preferred Shares, Depositary
Shares or shares of Common Stock, as the case may be, at such exercise price as
shall in each case be set forth in, or calculable from, the Prospectus
Supplement relating to the offered Securities Warrants. After the close of
business on the Expiration Date (or such later date to which such Expiration
Date may be extended by the Corporation), unexercised Securities Warrants will
become void.
Securities Warrants may be exercised by delivering to the Securities Warrant
Agent payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities, Preferred Shares, Depositary Shares or
Common Stock, as the case may be, purchasable upon such exercise together with
certain information set forth on the reverse side of the Securities Warrant
Certificate. Securities Warrants will be deemed to have been exercised upon
receipt of payment of the exercise price, subject to the receipt, within five
business days, of the Securities Warrant Certificate evidencing such Securities
Warrants. Upon receipt of such payment and the Securities Warrant Certificate
properly completed and duly executed at the corporate trust office of the
Securities Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Corporation will, as soon as practicable, issue and
deliver the Debt Securities, Preferred Shares, Depositary Shares or Common
Stock, as the case may be, purchasable upon such exercise. If fewer than all of
the Securities Warrants represented by such Securities Warrant Certificate are
exercised, a new Securities Warrant Certificate will be issued for the remaining
amount of Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENTS
The Securities Warrant Agreements may be amended or supplemented without the
consent of the holders of the Securities Warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the Securities Warrants
and that do not adversely affect the interests of the holders of the Securities
Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a Common
Stock Warrant are subject to adjustment in certain events, including (i) the
issuance of capital stock as a dividend or distribution on the Common Stock;
(ii) subdivisions and combinations of the Common Stock; (iii) the issuance to
all holders of Common Stock of certain rights or warrants entitling them to
subscribe for or purchase Common Stock within 45 days after the date fixed for
the determination of the stockholders entitled to receive such rights or
warrants, at less than the current market price (as defined in the Warrant
Agreement for such series of Common Stock Warrants); (iv) the distribution to
all holders of Common Stock of evidences of indebtedness or assets of the
Corporation (excluding certain cash dividends and distributions described below)
or rights or warrants (excluding those referred to above). In the event that the
Corporation shall distribute any rights or warrants to acquire capital stock
pursuant to clause (iii) above (the "Capital Stock Rights"), pursuant to which
separate certificates representing such Capital Stock Rights will be distributed
subsequent to the initial distribution of such Capital Stock Rights (whether or
not such distribution shall have occurred prior to the date of the issuance of a
series of Common Stock Warrants), such subsequent distribution shall be deemed
to be the distribution of such Capital Stock Rights; provided that the
Corporation may, in lieu of making any adjustment in the exercise price of and
the number of shares of Common Stock covered by a Common Stock Warrant upon a
distribution of separate certificates representing such Capital Stock Rights,
make proper provision so that each holder of such a Common Stock Warrant who
exercises such Common Stock Warrant (or any portion thereof) (a) before the
record date for such distribution of separate certificates shall be entitled to
receive upon such exercise shares of Common Stock issued with Capital Stock
Rights and (b) after such record date and prior to the expiration, redemption or
termination of such Capital Stock Rights shall be entitled to receive upon such
exercise, in addition to the shares of Common Stock issuable upon such exercise,
the same number of such Capital Stock Rights as would a holder of the number of
shares
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<PAGE>
of Common Stock that such Common Stock Warrant so exercised would have entitled
the holder thereof to acquire in accordance with the terms and provisions
applicable to the Capital Stock Rights if such Common Stock Warrant was
exercised immediately prior to the record date for such distribution. Common
Stock owned by or held for the account of the Corporation or any majority owned
subsidiary shall not be deemed outstanding for the purpose of any adjustment.
No adjustment in the exercise price of and the number of shares of Common
Stock covered by a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of at
least 1% in the exercise price then in effect; provided that any such adjustment
not so made will be carried forward and taken into account in any subsequent
adjustment; and provided further that any such adjustment not so made shall be
made no later than three years after the occurrence of the event requiring such
adjustment to be made or carried forward. Except as stated above, the exercise
price of and the number of shares of Common Stock covered by a Common Stock
Warrant will not be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock, or securities carrying the
right to purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Corporation or (iii) a sale or conveyance
to another corporation of the property and assets of the Corporation as an
entirety or substantially as an entirety, in each case as a result of which
holders of the Corporation's Common Stock shall be entitled to receive stock,
securities, other property or assets (including cash) with respect to or in
exchange for such Common Stock, the holders of the Common Stock Warrants then
outstanding will be entitled thereafter to convert such Common Stock Warrants
into the kind and amount of shares of stock and other securities or property
which they would have received upon such reclassification, change,
consolidation, merger, sale or conveyance had such Common Stock Warrants been
exercised immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance.
PLAN OF DISTRIBUTION
The Corporation may offer and sell the Offered Securities in any of three
ways: (i) through agents (including certain affiliates of the Corporation), (ii)
through underwriters or dealers (including certain affiliates of the
Corporation), or (iii) directly to one or more purchasers. The Prospectus
Supplement with respect to any of the Offered Securities will set forth the
terms of the offering of such Offered Securities, including the name or names of
any underwriters or agents, the purchase price of such Offered Securities, the
proceeds to the Corporation from such sale, any underwriting discounts or agency
fees and other items constituting underwriters' or agents' compensation, the
initial public offering price, any discounts or concessions allowed or reallowed
or paid to dealers, and any securities exchanges on which such Offered
Securities may be listed.
The distribution of the Offered Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Corporation, to indemnification by the Corporation against certain
civil liabilities, including liabilities under the Securities Act, or to
contributions with respect to payments which the underwriters or agents may be
required to make in respect thereof. Underwriters and agents, and affiliates
thereof, may be customers of, engage in transactions with, or perform services
for the Corporation and its affiliates in the ordinary course of business.
Each underwriter, dealer and agent participating in the distribution of any
Debt Securities that are issuable as Bearer Securities will agree that, in
connection with the original issuance of such Bearer Securities, it will not
offer, sell or deliver, directly or indirectly, Bearer Securities to a United
States person or to any person within the United States, except to the extent
permitted under United States Treasury regulations.
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<PAGE>
All Offered Securities will be new issues of securities with no established
trading market. Any underwriters to whom Offered Securities are sold by the
Corporation for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given concerning the liquidity of the trading market for any Offered Securities.
Norwest Investment Services Inc. ("NISI"), a wholly-owned subsidiary of the
Corporation, may assist in the placement of certain Offered Securities. Any such
placement will be pursuant to the terms of an agreement (a "Brokerage
Agreement") between the Corporation and NISI, whereby NISI will be acting as
agent for certain of its existing customers. Any such placement of Offered
Securities will be made in compliance with Schedule E to the By-Laws of the
National Association of Securities Dealers, Inc. Any such Brokerage Agreement
will authorize NISI to contact existing customers which are financial
institutions or sophisticated investors to inform them of the availability of
the Offered Securities and the terms on which the Offered Securities may be
purchased. NISI will forward any orders for the Offered Securities to the
Corporation for acceptance, and the Corporation will pay NISI a commission at
the same rate as the commissions paid to other agents placing Offered
Securities. As part of such arrangement, it is anticipated that the Corporation
will agree to indemnify NISI against and contribute towards certain liabilities,
including liabilities under the Securities Act.
VALIDITY OF SECURITIES
The validity of the Offered Securities will be passed upon for the
Corporation by Stanley S. Stroup, Executive Vice President and General Counsel
of the Corporation. As of March 31, 1995, Mr. Stroup was the owner of 108,607
shares of the Corporation's Common Stock and had options to acquire 327,410
additional shares. Certain tax matters will be passed upon for the Corporation
by Faegre & Benson Professional Limited Liability Partnership ("Faegre &
Benson"), 2200 Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota
55402. Faegre & Benson and certain members of the firm are indebted to and have
other banking and trust relationships with certain affiliated banks of the
Corporation. Members of Faegre & Benson and members of their families owned an
aggregate of 54,600 shares of the Corporation's Common Stock and 2,800 shares of
the Corporation's Preferred Stock.
EXPERTS
The consolidated financial statements of Norwest Corporation and
subsidiaries as of December 31, 1994 and 1993 and for each of the years in the
three-year period ended December 31, 1994, incorporated by reference herein,
have been incorporated herein in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
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NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANY PERSON IN ANY
STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
Description of Retail Medium-Term Notes........ S-3
Governing Law.................................. S-8
United States Taxation......................... S-8
Plan of Distribution of Retail Medium-Term
Notes......................................... S-13
Validity of Notes.............................. S-13
Experts........................................ S-14
PROSPECTUS
Incorporation of Certain Documents by
Reference..................................... 2
Available Information.......................... 2
The Corporation................................ 3
Certain Regulatory Matters..................... 3
Use of Proceeds................................ 7
Ratios of Earnings to Fixed Charges and
to Combined Fixed Charges and
Preferred Stock Dividends..................... 7
Description of Debt Securities................. 8
Description of Preferred Shares................ 18
Description of Depositary Shares............... 26
Description of Common Stock.................... 29
Description of Securities Warrants............. 30
Plan of Distribution........................... 33
Validity of Securities......................... 34
Experts........................................ 34
</TABLE>
$300,000,000
[LOGO]
NORWEST CORPORATION
RETAIL MEDIUM-TERM NOTESM SECURITIES
SUBORDINATED RETAIL MEDIUM-TERM NOTES
--------------
PROSPECTUS SUPPLEMENT
OCTOBER 4, 1995
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SMITH BARNEY INC.
SMServicemark of Smith Barney Inc.
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