<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED SEPTEMBER 1, 1995
$300,000,000
NORWEST CORPORATION
LIBOR NOTES DUE 1999
__________________________
The interest rate on the LIBOR Notes due 1999 (the "Notes") will be
determined by reference to LIBOR and will reset quarterly. Interest on the
Notes will accrue from October 22, 1996 or from the most recent Interest
Payment Date to which interest has been paid or provided for, and is payable
quarterly on each January 22, April 22, July 22 and October 22, commencing
January 22, 1997. The Notes will mature on October 22, 1999. The Notes are
repayable at the option of the Holder on specified dates and at specified
prices prior to Stated Maturity. See "Description of Notes".
__________________________
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 OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
__________________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PURCHASE UNDERWRITING PROCEEDS TO
PRICE DISCOUNT COMPANY(1)
- -------------------------------------------------------------------------------
Per Note 100% -0- 100%
- -------------------------------------------------------------------------------
Total $300,000,000 -0- $300,000,000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
______________
(1) Before deducting estimated expenses of $238,125 payable by the Company.
__________________________
The Notes offered hereby are to be issued to: Variable Insurance
Products Fund: Money Market Portfolio; Fidelity Phillips Street Trust:
Fidelity Cash Reserves; Daily Money Fund: Capital Reserves: Money Market
Portfolio; Fidelity Money Market Trust: Retirement Money Market Portfolio;
Fidelity Hereford Street Trust: Spartan Money Market Fund; Fidelity Select
Portfolios: Money Market Portfolio; Fidelity Institutional Cash Portfolios:
Money Market; Fidelity Union Street II: Fidelity Daily Income Trust; and
Fidelity Institutional Cash Portfolio: Domestic. It is expected that
delivery of the Notes will be made on or about October 22, 1996. The Notes
will be issued only in fully registered form.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS OCTOBER 18, 1996.
<PAGE>
DESCRIPTION OF NOTES
GENERAL
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 set
forth in the accompanying Prospectus, to which description reference is
hereby made.
The Notes will be issued pursuant to the Indenture dated as of September
1, 1993 (such Indenture, as supplemented from time to time, being herein
called the "Indenture"). 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 provisions of the Indenture, including
the definitions therein of certain terms.
The Notes will represent senior, unsubordinated debt of the Company and
will rank equally with all other unsecured and unsubordinated debt of the
Company. The Notes constitute a separate series of Debt Securities for
purposes of the Indenture. The Notes are limited to an aggregate initial
offering price of $300,000,000.
The Notes will be issuable only in definitive registered form in
denominations of $1,000,000 and integral multiples of $1,000,000 in excess
thereof.
MATURITY DATE
The Notes will mature on October 22, 1999; PROVIDED, HOWEVER, that if
such day is not a Business Day, principal and interest (if any) will be paid
on the next succeeding Business Day with the same force and effect as if made
on the date such payment was due. "Business Day" means any day (i) that is
not a Saturday or Sunday, and (ii) that in the City of Minneapolis, Minnesota
or The City of New York is not a day on which banking institutions generally
are authorized or obligated by law or executive order to close.
PAYMENT OF PRINCIPAL AND INTEREST
Interest on the Notes will be payable on January 22, April 22, July 22
and October 22 of each year (each an "Interest Payment Date"), commencing
January 22, 1997. The regular record dates for the Notes will be the January
1, April 1, July 1 and October 1, whether or not a Market Day, preceding the
January 22, April 22, July 22 or October 22 Interest Payment Date (each a
"Regular Record Date"). "Market Day" means any day (i) that is a Business
Day and (ii) that is a London Banking Day. "London Banking Day" means any
day on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
S-2
<PAGE>
Interest will be payable on each Interest Payment Date and at Maturity.
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 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. 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.
Principal and interest on the Notes will be payable 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, HOWEVER, that
payments of interest on any Interest Payment Date with respect to any 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 corresponding to the relevant
Interest Payment Date. Holders of $5,000,000 or more in aggregate principal
amount of Notes shall 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. The
principal and interest (if any) payable at Maturity on each 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.
If any Interest Payment Date (other than at Maturity) for a Note would
otherwise be a day that is not a Market Day, the Interest Payment Date for
such Note shall be postponed to the next day that is a Market Day, PROVIDED,
HOWEVER, that if such Market Day is in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding Market Day.
INTEREST RATE
The interest rate basis of the Notes will be LIBOR. The Notes will bear
interest at a rate equal to LIBOR plus two basis points and will be
determined by the Paying Agent, which is a subsidiary of the Company (the
"Calculation Agent"). The rate of interest on each Note will be reset on
January 22, April 22, July 22 and October 22 of each year (the date on which
each such reset occurs, an "Interest Reset Date").
The interest rate determined with respect to any Interest Determination
Date (as hereinafter defined) will become effective on and as of the next
succeeding Interest Reset Date; PROVIDED, HOWEVER, that the interest rate in
effect from the date of issue to the first Interest Reset Date with respect
to the Notes will be 5.54734%. If any Interest Reset Date for the Notes
would otherwise be a day that is not a Market Day, such Interest Reset Date
shall be postponed to the
S-3
<PAGE>
next day that is a Market Day; PROVIDED, HOWEVER, that if such Market Day is
in the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Market Day. As used herein, "Interest Determination
Date" means the date as of which the interest rate for the Notes is to be
calculated, to be effective as of the following Interest Reset Date and
calculated on the related Calculation Date (as hereinafter defined), and will
be the second London Banking Day preceding such Interest Reset Date. As used
herein, the "Calculation Date" pertaining to any Interest Determination Date
will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if such day is not a Market Day, the next succeeding
Market Day and (ii) the Market Day preceding the applicable Interest Payment
Date or Maturity, as the case may be.
LIBOR will be determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date, LIBOR will
be the rate for deposits in U.S. dollars having the specified Index
Maturity (as hereinafter defined) commencing on the second London
Banking Day immediately following that Interest Determination Date, that
appears on the Telerate Page 3750 (as hereinafter defined) as of 11:00
a.m., London time, on that Interest Determination Date. "Telerate Page
3750" means the display designated as page "3750" on the Telerate
Service (or such other page as may replace the 3750 page on that service
or other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates
for U.S. dollar deposits). If no rate appears on the Telerate Page
3750, LIBOR in respect of that Interest Determination Date will be
determined as if the parties had specified the rate described in (ii)
below.
(ii) With respect to an Interest Determination Date on which
no rate appears on Telerate Page 3750, LIBOR will be determined on the
basis of the rate at which deposits in U.S. dollars are offered by four
major banks in the London interbank market selected by the Calculation
Agent (the "Reference Banks") at approximately 11:00 a.m., London time,
on that Interest Determination Date to prime banks in the London
interbank market having the specified Index Maturity, commencing on the
second London Banking Day immediately following such Interest
Determination Date and in a principal amount, not less than U.S.
$1,000,000, that, in the judgment of the Calculation Agent, is
representative for a single transaction in such market at such time.
The Calculation Agent will request the principal London office of each
of such Reference Banks to provide a quotation of its rate. If at least
two such quotations are provided, LIBOR in respect of that Interest
Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR in respect of that
Interest Determination Date will be the arithmetic mean of the rates
quoted by three major banks in The City of New York selected by the
Calculation Agent at approximately 11:00 a.m., New York City time, on
that Interest Determination Date for loans in U.S. dollars to leading
European banks, having the specified Index Maturity, commencing on the
second London Banking Day immediately
S-4
<PAGE>
following that Interest Determination Date and in a principal amount,
not less than U.S. $1,000,000, that, in the judgment of the Calculation
Agent, is representative for a single transaction in such market at such
time; PROVIDED, HOWEVER, that if fewer than three banks in The City of
New York selected as aforesaid by the Calculation Agent are quoting as
specified in this sentence, LIBOR with respect to such Interest
Determination Date will remain LIBOR in effect on such Interest
Determination Date.
The period to maturity of any instrument on which LIBOR will be based is
three months (the "Index Maturity").
Interest payments on an Interest Payment Date for the Notes will include
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 the Notes) to, but excluding, such Interest Payment Date
or date of Maturity (each such interest accrual period, an "Interest
Period"). For purposes of determining the interest factor for each day in an
Interest Period, the per annum interest rate applicable to such day shall be
divided by 360. The interest rate in effect on each day will be (i) if such
day is an Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to such Interest Reset Date or (ii) if such day
is not an Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to the next preceding Interest Reset Date.
On or before each Calculation Date, the Paying Agent, as Calculation
Agent, will determine the interest rate as described above. The Paying Agent
will, upon the request of the Holder of any Note, provide the interest rate
then in effect and the interest rate which will become effective as a result
of a determination made with respect to the most recent Interest
Determination Date with respect to the Notes. The determinations of interest
rates made by the Calculation Agent shall be conclusive and binding, and the
Trustee shall have no duty to verify determinations of interest rates made by
the Calculation Agent.
All percentages resulting from any calculation referred to in this
Prospectus Supplement will be rounded, if necessary, to the nearest one
ten-thousandth of one percentage point, with five hundred-thousandths of one
percentage point rounded upward (e.g. 9.76545% (or .0976545) being rounded to
9.7655% (or .097655) and 9.76544% (or .0976544) being rounded to 9.7654% (or
.097654); and all currency or currency unit amounts used in or resulting from
such calculations on the Notes will be rounded to the nearest one-hundredth
of a unit (with .005 of a unit being rounded upwards).
The interest rate on the Notes 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 limit may not apply to Notes in which
$2,500,000 or more has been invested.
S-5
<PAGE>
DEFEASANCE
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.
REPAYMENT
Each Note is repayable at the option of the Holder, in whole but not in
part, on the repayment dates set forth below (each a "Repayment Date"), upon
not less than ten nor more than thirty days' notice (written or oral) to the
Company, at the Redemption Amount; PROVIDED, HOWEVER, that if a Holder gives
oral notice to the Company, such notice shall be confirmed in writing no
later than the earlier of (i) two Business Days after the date of such oral
notice, and (ii) the date which is eight days prior to the requested
Repayment Date. Any such election shall be irrevocable. As used herein,
"Redemption Amount" shall mean (i) 100% of the principal amount to be repaid,
plus (ii) accrued interest, if any, to the Repayment Date; PROVIDED, HOWEVER,
that any Note to be repaid at the option of the Holder on a Repayment Date
will bear interest during the Interest Period preceding the Interest Payment
Date which coincides with the Repayment Date at a rate of interest equal to
the rate determined as set forth above under "Interest Rate" minus the number
of basis points set forth below opposite the applicable Repayment Date:
REPAYMENT DATE NUMBER OF BASIS POINTS
-------------- ----------------------
April 22, 1997 20
October 22, 1997 15
April 22, 1998 10
October 22, 1998 5
April 22, 1999 0
In order for the option of the Holder to be effective and the Note to be
repaid, the Paying Agent must receive, on or before the third but not earlier
than the thirtieth calendar day, or if such day is not a Market Day, the next
succeeding Market Day, prior to the Repayment Date, such Note with the
"Option to Elect Repayment" on the reverse side thereof duly completed. No
sinking fund will be provided for the Notes. All questions as to the
compliance by the Holder with the procedures and requirements for repayment
of a Note will be determined by the Company on a reasonable basis, whose
determination will be final and binding.
REDEMPTION
The Notes are not subject to redemption at the option of the Company
prior to their Stated Maturity. No sinking fund will be provided for the
Notes.
S-6
<PAGE>
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.
PLAN OF DISTRIBUTION
The Notes offered hereby are to be issued to the following purchasers in
the principal amounts set forth opposite their respective names:
PRINCIPAL
PURCHASER AMOUNT
--------- ---------
Variable Insurance Products Fund: Money Market Portfolio $ 6,000,000
Fidelity Phillips Street Trust: Fidelity Cash Reserves 118,000,000
Daily Money Fund:Capital Reserves: Money Market Portfolio 8,000,000
Fidelity Money Market Trust: Retirement Money Market Portfolio 31,000,000
Fidelity Hereford Street Trust: Spartan Money Market Fund 50,000,000
Fidelity Select Portfolios: Money Market Portfolio 4,000,000
Fidelity Institutional Cash Portfolios: Money Market 61,000,000
Fidelity Union Street II: Fidelity Daily Income Trust 13,000,000
Fidelity Institutional Cash Portfolio: Domestic 9,000,000
------------
$300,000,000
------------
------------
S-7
<PAGE>
The Company does not intend to list the Notes on any securities exchange.
There can be no assurance that a secondary market will develop for the Notes
and the Company is not aware that any person intends to make a market with
respect to the Notes.
S-8
<PAGE>
PROSPECTUS
NORWEST CORPORATION
DEBT SECURITIES AND DEBT WARRANTS
PREFERRED SHARES AND PREFERRED SHARE WARRANTS
COMMON STOCK WARRANTS
UNITS
-----------------
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
2
<PAGE>
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
3
<PAGE>
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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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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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 und er 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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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.
33
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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 beneficial owner of
108,607 shares of the Corporation's Common Stock and had options to acquire
179,931 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.
34
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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
Page
PROSPECTUS SUPPLEMENT
Description of Notes S-2
Plan of Distribution S-7
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
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$300,000,000
Norwest Corporation
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PROSPECTUS SUPPLEMENT
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October 18, 1996
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