<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 33-55839
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 23, 1994)
$250,000,000
WACHOVIA CORPORATION
6.80% SUBORDINATED NOTES DUE 2005
---------------------
Interest on the Subordinated Notes offered hereby (the "Subordinated
Notes") is payable semi-annually on June 1 and December 1 of each year,
commencing December 1, 1995. The Subordinated Notes are not redeemable prior to
maturity and will mature on June 1, 2005.
The Subordinated Notes are subordinated to all present and future Senior
Indebtedness of Wachovia Corporation (the "Corporation") and, under certain
circumstances, to Additional Senior Obligations of the Corporation, as described
in the accompanying Prospectus under "Description of Securities -- Subordination
of Securities." Payment of principal of the Subordinated Notes may be
accelerated only in the case of the bankruptcy of the Corporation. There is no
right of acceleration in the case of a default in the payment of interest on the
Subordinated Notes or in the performance of any covenant or agreement of the
Corporation with respect to the Subordinated Notes. See "Description of
Securities -- Events of Default; Limited Rights of Acceleration" in the
accompanying Prospectus.
The Subordinated Notes will be represented by one or more Book-Entry
Securities registered in the name of the nominee of The Depository Trust
Company, which will act as the Depositary. Interests in the Subordinated Notes
represented by Book-Entry Securities will be shown on, and transfer thereof will
be effected only through, records maintained by the Depositary and its direct
and indirect participants. Except as described herein, Subordinated Notes in
definitive form will not be issued. Settlement for the Subordinated Notes will
be made in immediately available funds. The Subordinated Notes will trade in the
Depositary's Same-Day Funds Settlement System until maturity and secondary
market trading activity in the Subordinated Notes will settle in immediately
available funds. All payments of principal and interest will be made by the
Corporation in immediately available funds. See "Description of Subordinated
Notes."
---------------------
THE SUBORDINATED NOTES ARE UNSECURED OBLIGATIONS OF THE CORPORATION, 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 GOVERNMENT 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 TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
====================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) CORPORATION(1)(3)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note...................................... 99.855% .65% 99.205%
- ----------------------------------------------------------------------------------------------------
Total......................................... $249,637,500 $1,625,000 $248,012,500
====================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from June 8, 1995.
(2) The Corporation has agreed to indemnify the several Underwriters against
certain liabilities under the Securities Act of 1933. See "Underwriting".
(3) Before deducting expenses payable by the Corporation estimated at $200,000.
---------------------
The Subordinated Notes are offered by the several Underwriters, subject to
prior sale, when, as and if issued to and accepted by them, subject to approval
of certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Subordinated Notes will be made through the book-entry
facilities of the Depositary on or about June 8, 1995.
---------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
J.P. MORGAN SECURITIES INC.
WACHOVIA BANK OF NORTH CAROLINA, N.A.
---------------------
The date of this Prospectus Supplement is June 1, 1995.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SUBORDINATED
NOTES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OPEN MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
WACHOVIA CORPORATION
Wachovia Corporation (the "Corporation") is a bank holding company
organized in 1985 under the laws of the State of North Carolina. The Corporation
is the 23rd largest bank holding company in the United States, based on total
assets at December 31, 1994. At March 31, 1995, the Corporation had consolidated
assets of $40.223 billion, consolidated loans net of unearned income of $26.728
billion, consolidated deposits of $23.110 billion and consolidated shareholders'
equity of $3.405 billion. The Corporation's principal assets consist of all the
outstanding common stock of Wachovia Bank of North Carolina, N.A., a national
banking association organized under the laws of the United States, Wachovia Bank
of Georgia, N.A., a national banking association organized under the laws of the
United States, and South Carolina National Corporation, a bank and savings and
loan holding company organized under the laws of South Carolina.
Wachovia Bank of North Carolina, N.A. provides personal, commercial, trust
and institutional banking services through 218 full-service banking offices in
95 North Carolina cities and communities. In addition, it has a foreign branch
in Grand Cayman and an Edge Act subsidiary -- Wachovia International Banking
Corporation, with branch offices in Georgia, New York, North Carolina and South
Carolina. At March 31, 1995, Wachovia Bank of North Carolina, N.A. had total
assets of $23.375 billion and total deposits of $10.914 billion.
Wachovia Bank of Georgia, N.A. provides personal, commercial, trust and
institutional banking services with a network of 126 offices in 48 cities and
communities in Georgia, and a foreign branch in Grand Cayman. At March 31, 1995,
Wachovia Bank of Georgia, N.A. had total assets of $15.179 billion and total
deposits of $7.591 billion.
South Carolina National Corporation provides personal, commercial, trust
and institutional banking services through its principal subsidiary, Wachovia
Bank of South Carolina, N.A., a national banking association organized under the
laws of the United States. Wachovia Bank of South Carolina, N.A. has 148 offices
in 64 South Carolina cities and communities and a foreign branch in the Cayman
Islands. At March 31, 1995, Wachovia Bank of South Carolina, N.A. had total
assets of $6.676 billion and total deposits of $4.989 billion.
The Corporation also has bank-related subsidiaries engaged in mortgage
banking, discount brokerage and credit-related insurance.
The Corporation has dual executive offices located at 301 North Main
Street, Winston-Salem, North Carolina 27150 and 191 Peachtree Street, N.E.,
Atlanta, Georgia 30303, and its telephone numbers are (910) 770-5000 and (404)
332-5000, respectively.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The consolidated ratio of earnings to fixed charges of the Corporation for
the three months ended March 31, 1995 was 1.58x including interest on deposits
and 2.13x excluding interests on deposits.
S-2
<PAGE> 3
DESCRIPTION OF SUBORDINATED NOTES
The following description of the Subordinated Notes (referred to in the
accompanying Prospectus as the "Securities") supplements, and to the extent
inconsistent therewith replaces, the description of the general terms and
provisions of the Securities set forth in the accompanying Prospectus, to which
description reference is hereby made. Capitalized terms used and not defined
herein have the meaning set forth in the accompanying Prospectus.
GENERAL
The Subordinated Notes will be limited to $250,000,000 aggregate principal
amount and will mature on June 1, 2005. Interest on the Subordinated Notes will
be payable at the rate per annum shown on the cover page of this Prospectus
Supplement from June 8, 1995, or from the most recent Interest Payment Date to
which interest has been paid or provided for, semiannually on June 1 and
December 1 of each year, commencing on December 1, 1995, to the persons in whose
names the Subordinated Notes are registered at the close of business on the May
15 and November 15, as the case may be, next preceding such Interest Payment
Date. The Subordinated Notes are not redeemable prior to maturity.
SUBORDINATION
The Subordinated Notes will be direct, unsecured obligations of the
Corporation and will be subordinate to all Senior Indebtedness of the
Corporation and, under certain circumstances relating to the dissolution,
winding-up, liquidation or reorganization of the Corporation, to all Additional
Senior Obligations of the Corporation, as described in the accompanying
Prospectus under the heading "Description of Securities -- Subordination of
Securities." The Indenture does not limit or prohibit the incurrence of Senior
Indebtedness or Additional Senior Obligations. As of March 31, 1995, the
Corporation had outstanding approximately $6.0 million of Senior Indebtedness
and no Additional Senior Obligations.
BOOK-ENTRY SYSTEM
The Subordinated Notes initially will be represented by one or more
book-entry securities (the "Book-Entry Securities") deposited with The
Depository Trust Company ("DTC") and registered in the name of a nominee of DTC.
The term "Depositary" refers to DTC or any successor depositary. Except as set
forth below, the Subordinated Notes will be available for purchase in
denominations of $1,000 and integral multiples thereof in book-entry form only.
Except in the limited circumstances as described under "Description of
Securities -- Book-Entry Securities" in the Prospectus, owners of beneficial
interests in the Book-Entry Securities will not be entitled to have Subordinated
Notes represented by such Book-Entry Securities registered in their names, will
not receive or be entitled to receive physical delivery of such Subordinated
Notes in definitive form, and will not be considered the owners or holders
thereof under the Indenture.
DTC has advised the Corporation that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities of persons who have accounts with DTC
("participants") and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. DTC's participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations, some of which
(and/or their representatives) own DTC. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly.
For additional information regarding the Book-Entry System see "Description
of Securities -- Book-Entry Securities" in the Prospectus.
S-3
<PAGE> 4
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Subordinated Notes will be made in immediately available
funds. All payments of principal and interest will be made by the Corporation in
immediately available funds. The Subordinated Notes will trade in the
Depositary's Same-Day Funds Settlement System until maturity, and therefore the
Depositary will require secondary trading activity in the Subordinated Notes to
be settled in immediately available funds. Secondary trading in long-term notes
and debentures of corporate issuers is generally settled in clearing-house or
next-day funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on trading activity in the
Subordinated Notes.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") among the Corporation and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, CS First Boston Corporation, Goldman, Sachs & Co.,
Lehman Brothers Inc. and J.P. Morgan Securities Inc. (the "Underwriters"), the
Corporation has agreed to sell to the Underwriters, and the Underwriters have
severally agreed to purchase, the respective principal amounts of the
Subordinated Notes set forth after their names below. In the Underwriting
Agreement, the several Underwriters have agreed, subject to the terms and
conditions set forth therein, to purchase all the Subordinated Notes offered
hereby if any of the Subordinated Notes are purchased. In the event of default
by an Underwriter, the Underwriting Agreement provides that, in certain
circumstances, purchase commitments of the nondefaulting Underwriters may be
increased or the Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ...................................................... $ 50,000,000
CS First Boston Corporation.................................................... 50,000,000
Goldman, Sachs & Co............................................................ 50,000,000
Lehman Brothers Inc............................................................ 50,000,000
J.P. Morgan Securities Inc..................................................... 50,000,000
------------
Total............................................................ $250,000,000
============
</TABLE>
The Underwriters have advised the Corporation that they propose initially
to offer the Subordinated Notes to the public at the public offering price set
forth on the cover page of this Prospectus Supplement, and to certain dealers at
such price less a concession not in excess of .4% of the principal amount of the
Subordinated Notes. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of .25% of the principal amount of the Subordinated Notes
to certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.
The Underwriting Agreement provides that the Corporation will indemnify the
Underwriters against certain civil liabilities, including liabilities under the
Securities Act of 1933 or contribute to payments the Underwriters may be
required to make in respect thereof.
The Subordinated Notes will not be listed on any securities exchange. The
Corporation has been advised by the Underwriters that the Underwriters currently
intend to make a market in the Subordinated Notes, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the Subordinated Notes and any such market-making may be discontinued
at any time at the sole discretion of the Underwriters. Accordingly, no
assurance can be given as to the liquidity of, or trading markets for, the
Subordinated Notes.
The Underwriters and their respective affiliates may be customers of,
engage in transactions with and perform services for the Corporation and its
subsidiaries in the ordinary course of business.
S-4
<PAGE> 5
PROSPECTUS
$500,000,000
WACHOVIA CORPORATION
SUBORDINATED DEBT SECURITIES
---------------------
Wachovia Corporation (the "Corporation") may offer from time to time up to
$500,000,000 aggregate principal amount (or its equivalent based on the
applicable exchange rate at the time of offering if denominated in foreign
currencies) of its subordinated debt securities (the "Securities") on terms to
be determined by market conditions at the time of sale. As used herein, the
Securities shall include securities denominated in U.S. dollars or, if so
specified in the applicable Prospectus Supplement, in any other currency,
including composite currencies such as the European Currency Unit. The
Securities may be sold directly by the Corporation to the public or through
agents designated from time to time, through underwriting syndicates led by one
or more managing underwriters or through one or more underwriters acting alone.
The specific aggregate principal amount, maturity, rate and time of payment
of interest, if any, purchase price, any terms for redemption or other special
terms relating to the Securities in respect of which this Prospectus is being
delivered ("Offered Securities") are set forth in the accompanying Prospectus
Supplement (the "Prospectus Supplement"), together with the terms of offering of
the Offered Securities.
The Securities will be unsecured and will be subordinate to Senior
Indebtedness of the Corporation and, under certain circumstances, to Additional
Senior Obligations of the Corporation, each as defined herein. Payment of
principal of the Securities may be accelerated only in the case of the
bankruptcy of the Corporation. There is no right of acceleration in the case of
a default in the payment of the principal of, or any premium or interest on, the
Securities or in the performance of any covenant or agreement of the
Corporation.
The Securities of a series may be issued in definitive registered form
without coupons ("Registered Securities") or in the form of one or more
book-entry securities in registered form ("Book-Entry Securities").
If any agent of the Corporation, or any underwriter, is involved in the
sale of the Securities offered hereby, the name of such agent or underwriter and
any applicable commissions or discounts are set forth in, or may be calculated
from, the Prospectus Supplement, and the net proceeds to the Corporation from
such sale will be the purchase price of such Securities less such commissions or
discounts and the other attributable issuance and distribution expenses. See
"Plan of Distribution" for possible indemnification arrangements for agents or
underwriters.
---------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. THE SECURITIES WILL BE UNSECURED
OBLIGATIONS OF THE CORPORATION, WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE CORPORATION AND WILL NOT BE
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR
ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is November 23, 1994.
<PAGE> 6
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission, at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, and at the Commission's Regional Offices in New York
(13th Floor, 7 World Trade Center, New York, New York 10048) and Chicago (Suite
1400, 500 West Madison Street, Chicago, Illinois 60661-2511), and copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed
rates. In addition, such material can be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005. This Prospectus
does not contain all the information set forth in the Registration Statement on
Form S-3 of which this Prospectus is a part and the exhibits thereto which the
Corporation has filed with the Commission under the Securities Act of 1933 (the
"Securities Act") and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference in this Prospectus the
following reports filed with the Commission pursuant to Section 13 of the
Exchange Act: (a) the Corporation's Annual Report on Form 10-K for the year
ended December 31, 1993; (b) the Corporation's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1994, June 30, 1994 and September 30, 1994; and
(c) the Corporation's Current Report on Form 8-K dated January 11, 1994.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities offered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE
IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO
WACHOVIA CORPORATION, 301 NORTH MAIN STREET, WINSTON-SALEM, NORTH CAROLINA
27150, ATTENTION: GENERAL COUNSEL. TELEPHONE REQUESTS MAY BE DIRECTED TO (910)
770-5000.
WACHOVIA CORPORATION
Wachovia Corporation (the "Corporation") is a bank holding company
organized in 1985 under the laws of the State of North Carolina. The Corporation
is the 23rd largest bank holding company in the United States, based on total
assets at June 30, 1994. At June 30, 1994, the Corporation had consolidated
assets of $37.1 billion, consolidated loans net of unearned income of $24.3
billion, consolidated deposits of $22.2 billion and consolidated shareholders'
equity of $3.1 billion. The Corporation's principal assets consist of all the
outstanding common stock of Wachovia Bank of North Carolina, N.A. and Wachovia
Bank of Georgia, N.A., national banking associations organized under the laws of
the United States, and South Carolina National Corporation, a bank and savings
and loan holding company organized under the laws of South Carolina.
Wachovia Bank of North Carolina, N.A. provides personal, commercial, trust
and institutional banking services through 216 full-service banking offices in
94 North Carolina cities and communities. In addition, it has a foreign branch
in Grand Cayman and an Edge Act subsidiary -- Wachovia International Banking
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<PAGE> 7
Corporation, with branch offices in New York City, Charlotte, North Carolina and
Atlanta, Georgia. At June 30, 1994, Wachovia Bank of North Carolina, N.A. had
total assets of $21.4 billion and total deposits of $10.9 billion.
Wachovia Bank of Georgia, N.A. provides a full range of banking services
through its network of 127 offices in 48 cities and communities in Georgia, and
a foreign branch in Grand Cayman. At June 30, 1994, Wachovia Bank of Georgia,
N.A. had total assets of $12.6 billion and total deposits of $7.1 billion.
South Carolina National Corporation provides full-service banking through
its principal subsidiary, Wachovia Bank of South Carolina, N.A. Wachovia Bank of
South Carolina, N.A. has 151 offices in 66 South Carolina cities and communities
and a foreign branch in the Cayman Islands. At June 30, 1994, Wachovia Bank of
South Carolina, N.A. had total assets of $6.3 billion and total deposits of $4.8
billion.
The Corporation also has bank-related subsidiaries engaged in mortgage
banking, discount brokerage and credit-related insurance.
The Corporation has dual executive offices located at 301 North Main
Street, Winston-Salem, North Carolina 27150 and 191 Peachtree Street, N.E.,
Atlanta, Georgia 30303, and its telephone numbers are (910) 770-5000 and (404)
332-5000, respectively.
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, the Corporation is subject to the regulation and
supervision of the Federal Reserve Board. The Corporation's subsidiary banks
(the "Subsidiary Banks"), as national banking associations, are subject to
supervision and examination by the Office of the Comptroller of the Currency
(the "Comptroller") and the Federal Deposit Insurance Corporation (the "FDIC").
In addition, as a savings and loan holding company, the Corporation is
registered with the Office of Thrift Supervision ("OTS") and is subject to OTS
regulations, supervision and reporting requirements. South Carolina National
Corporation and its subsidiary savings bank, Atlantic Savings Bank, F.S.B.
("Atlantic"), are also subject to supervision and examination by OTS. The
Subsidiary Banks and Atlantic are also subject to various requirements and
restrictions, including requirements to maintain reserves against deposits,
restrictions on the types and amounts of loans that may be granted and the
interest that may be charged thereon, and limitations on the types of
investments that may be made and the types of services that may be offered.
Various consumer laws and regulations also affect the operations of the
Subsidiary Banks and Atlantic. In addition to the impact of regulation,
commercial banks and savings 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.
The federal banking agencies have broad enforcement powers over depository
institutions, including the power to terminate deposit insurance, to impose
substantial fines and other civil and criminal penalties, and to appoint a
conservator or receiver if any of a number of conditions are met. The federal
banking agencies also have broad enforcement powers over bank holding companies,
including the power to impose substantial fines and other civil and criminal
penalties.
Almost every aspect of the operations and financial condition of the
Subsidiary Banks is subject to extensive regulation and supervision and to
various requirements and restrictions under federal and state law, including
requirements governing capital adequacy, liquidity, earnings, dividends,
reserves against deposits, management practices, branching, loans, investments
and the provision of services. The activities and operations of the Corporation
also are subject to extensive federal supervision and regulation which, among
other things, limit non-banking activities, impose minimum capital requirements
and require approval to acquire 5% of any class of voting shares or
substantially all of the assets of a bank or other company. In addition to the
impact of regulation, banks and bank holding companies may be significantly
affected by legislation, which can change banking statutes in substantial and
unpredictable ways, and by the actions of the
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<PAGE> 8
Federal Reserve Board as it attempts to control the money supply and credit
availability in order to influence the economy.
PAYMENT OF DIVIDENDS AND OTHER RESTRICTIONS
The Corporation is a legal entity separate and distinct from its
subsidiaries, including the Subsidiary Banks and Atlantic. There are various
legal and regulatory limitations on the extent to which the Corporation's
subsidiaries, including its bank and bank holding company subsidiaries and its
savings and loan holding company subsidiary, can finance or otherwise supply
funds to the Corporation.
The principal source of the Corporation's cash revenues is dividends from
its subsidiaries and there are certain legal restrictions under federal and
state law on the payment of dividends by such subsidiaries. The prior approval
of the Comptroller is required if the total of all dividends declared by any
national banking association in any calendar year exceeds the bank's net profits
(as defined) for that year combined with its retained net profits for the
preceding two calendar years, less any required transfers to surplus or a fund
for the retirement of any preferred stock. In addition, a dividend may not be
paid in excess of a bank's "undivided profits then on hand," after deduction
therefrom of losses in excess of the "allowance for loan and lease losses," as
such terms are defined in the applicable regulations. The relevant regulatory
agencies also have authority to prohibit a bank holding company, which would
include Wachovia Corporation and South Carolina National Corporation, or a
national banking association from engaging in what, in the opinion of such
regulatory body, constitutes an unsafe or unsound practice in conducting its
business. The payment of dividends could, depending upon the financial condition
of the subsidiary, be deemed to constitute such an unsafe or unsound practice.
Under applicable law, as a savings bank, Atlantic must give the OTS 30 days
prior notice of any proposed payment of dividends.
Retained earnings of the Corporation's banking subsidiaries available for
payment of cash dividends under all applicable regulations without obtaining
governmental approval were approximately $526 million as of June 30, 1994.
In addition, the Subsidiary Banks and their subsidiaries are subject to
limitations under Section 23A of the Federal Reserve Act with respect to
extensions of credit to, investments in, and certain other transactions with,
the Corporation and its other subsidiaries. Furthermore, loans and extensions of
credit are also subject to various collateral requirements.
CAPITAL ADEQUACY
The federal bank regulatory agencies have adopted minimum risk-based and
leverage capital guidelines for United States banking organizations. The minimum
required risk-based capital ratio of qualifying total capital to risk-weighted
assets (including certain off-balance-sheet items, such as standby letters of
credit) is 8%, of which 4% must consist of Tier 1 capital. As of June 30, 1994,
the Company's total risk-based capital ratio was 13.35%, including 9.56% of Tier
1 capital. The minimum required leverage capital ratio (Tier 1 capital to
average total assets) is 3% for banking organizations that meet certain
specified criteria, including that they have the highest regulatory rating. A
higher leverage ratio may apply under certain circumstances. As of June 30,
1994, the Company's leverage capital ratio was 8.43%.
Failure to meet capital guidelines can subject a banking organization to a
variety of enforcement remedies, including additional substantial restrictions
on its operations and activities, termination of deposit insurance by the FDIC,
and under certain conditions the appointment of a receiver or conservator.
Federal banking statutes establish five capital categories for depository
institutions ("well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized"), and impose
significant restrictions on the operations of an institution that is not at
least adequately capitalized. Under certain circumstances, an institution may be
downgraded to a category lower than that warranted by its capital levels, and
subjected to the supervisory restrictions applicable to institutions in the
lower capital category. A depository institution is generally prohibited from
making capital distributions (including paying dividends) or paying management
fees to a holding company if the institution would
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<PAGE> 9
thereafter be undercapitalized. Adequately capitalized institutions may accept
brokered deposits only with a waiver from the FDIC, while undercapitalized
institutions may not accept, renew, or roll over brokered deposits.
An undercapitalized depository institution is also subject to restrictions
in a number of areas, including asset growth, acquisitions, branching, new lines
of business, and borrowing from the Federal Reserve System. In addition, an
undercapitalized depository institution is required to submit a capital
restoration plan. A depository institution's holding company must guarantee the
capital plan up to an amount equal to the lesser of 5% of the depository
institution's assets at the time it becomes undercapitalized or the amount
needed to restore the capital of the institution to the levels required for the
institution to be classified as adequately capitalized at the time the
institution fails to comply with the plan and any such guarantee would be
entitled to a priority of payment in bankruptcy. A depository institution is
treated as if it is significantly undercapitalized if it fails to submit a
capital plan that is based on realistic assumptions and is likely to succeed in
restoring the depository institution's capital.
Significantly undercapitalized depository institutions may be subject to a
number of additional significant requirements and restrictions, including
requirements to sell sufficient voting stock to become adequately capitalized,
to replace or improve management, to reduce total assets, to cease acceptance of
correspondent bank deposits, to restrict senior executive compensation and to
limit transactions with affiliates. Critically undercapitalized depository
institutions are further subject to restrictions on paying principal or interest
on subordinated debt, making investments, expanding, acquiring or selling
assets, extending credit for highly-leveraged transactions, paying excessive
compensation, amending their charters or bylaws and making any material changes
in accounting methods. In general, a receiver or conservator must be appointed
for a depository institution within 90 days after the institution is deemed to
be critically undercapitalized.
SUPPORT OF SUBSIDIARY BANKS
Under Federal Reserve Board policy, the Corporation is expected to act as a
source of financial strength to, and to commit resources to support, each of the
Subsidiary Banks. This support may be required at times when, absent such
Federal Reserve Board policy, the Corporation may not be inclined to provide it.
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 in
connection with the default of a commonly controlled FDIC-insured depository
institution or any assistance provided by the FDIC to any 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.
Liability for the losses of commonly-controlled depository institutions can lead
to the failure of some or all depository institutions in a holding company
structure, if the remaining institutions are unable to pay the liability
assessed by the FDIC. Any obligation or liability owed by a subsidiary bank to
its parent company is subordinate to the subsidiary bank's cross-guarantee
liability for losses of commonly-controlled depository institutions.
FDIC INSURANCE ASSESSMENTS
The Subsidiary Banks are subject to FDIC deposit insurance assessments. The
FDIC applies a risk-based assessment system that will place each financial
institution in one of nine risk categories with premium rates, based on capital
levels and supervisory criteria, ranging from 0.23% to 0.31% of deposits. The
FDIC has the authority to raise or lower assessment rates on insured deposits in
order to achieve certain designated reserve ratios in the deposit insurance
funds and to impose special additional assessments.
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<PAGE> 10
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratio of earnings
to fixed charges of the Corporation. The consolidated ratio of earnings to fixed
charges has been computed by dividing net income plus all applicable income
taxes plus fixed charges by fixed charges. Fixed charges represent all interest
expense (ratios are presented both excluding and including interest on
deposits), and the portion of net rental expense which is deemed to be
equivalent to interest on long-term debt. Interest expense (other than on
deposits) includes interest on long-term debt, federal funds purchased and
securities sold under agreements to repurchase, mortgages, commercial paper and
other funds borrowed.
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED DECEMBER 31,
ENDED --------------------------------
SEPTEMBER 30, 1994 1993 1992 1991 1990 1989
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Including interest on deposits................... 1.75 1.81 1.61 1.19 1.26 1.25
Excluding interest on deposits................... 2.58 3.32 3.57 1.71 1.81 2.00
</TABLE>
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be used for general
corporate purposes, principally to fund investments in, or extensions of credit
to, the Corporation's banking and nonbanking subsidiaries. The Corporation also
may use such proceeds to allow its subsidiaries to repay borrowings incurred by
such subsidiaries. Except as otherwise described in the Prospectus Supplement,
specific allocations of the proceeds to such purposes will not have been made at
the date of the Prospectus Supplement, although management of the Corporation
will have determined that funds should be borrowed at that time in anticipation
of future funding or capital requirements of its subsidiaries. The precise
amount and timing of such investments in and extensions of credit to the
subsidiaries will depend upon their funding requirements and the availability of
other funds to the Corporation and its subsidiaries. In addition to the
foregoing, the Corporation may also use a portion of the net proceeds to fund
possible acquisitions if suitable opportunities develop in the future. Based
upon the anticipated future financing requirements of the Corporation and its
subsidiaries, the Corporation expects that it will, from time to time, engage in
additional financings of a character and in amounts to be determined.
DESCRIPTION OF SECURITIES
GENERAL
The following sets forth certain general terms and provisions of the
Securities offered hereby. The particular terms of the Securities offered by any
Prospectus Supplement will be described in the Prospectus Supplement relating to
such Offered Securities (the "Applicable Prospectus Supplement").
The Securities are to be issued under an Indenture dated as of March 1,
1993 (the "Indenture"), between the Corporation and CoreStates Bank, National
Association, as trustee (the "Trustee"). A copy of the Indenture is an exhibit
to the Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Securities and the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indenture, including the definitions
therein of certain terms. Wherever particular Sections, Articles or defined
terms of the Indenture are referred to, it is intended that such Sections,
Articles or defined terms shall be incorporated herein by reference. Article and
Section references used herein are references to the Indenture. Capitalized
terms not otherwise defined in this Prospectus shall have the meanings given to
them in the Indenture.
The Securities will be unsecured and will be subordinated and junior to all
Senior Indebtedness and, in certain circumstances relating to the dissolution,
winding-up, liquidation or reorganization of the Corporation, to all Additional
Senior Obligations (as defined below under "Subordination of Securities"). The
Indenture does not contain covenants prohibiting the Corporation from disposing
of voting stock of its subsidiaries,
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<PAGE> 11
including the stock of any of its banking subsidiaries. Events of default as to
which payment of the principal of the Securities may be accelerated are limited
to events relating to the bankruptcy of the Corporation. See "Subordination of
Securities" and "Events of Default; Limited Rights of Acceleration."
The Indenture does not limit the amount of Securities that may be issued
thereunder and provides that Securities may be issued thereunder from time to
time in one or more series. (Section 301) The Securities will be unsecured
subordinated obligations of the Corporation. Neither the Indenture nor the
Securities will limit or otherwise restrict the amount of other indebtedness
which may be incurred or the other securities which may be issued by the
Corporation or any of its subsidiaries. In addition, the Indenture and the
Securities will not contain any provision that would require the Corporation to
repurchase or redeem or otherwise modify the terms of the Securities upon a
change in control or other events involving the Corporation that may adversely
affect the credit quality of the Corporation.
Because the Corporation is a holding company, its rights and the rights of
its creditors, including the holders of the Securities, to participate in the
assets of any subsidiary upon the liquidation or reorganization of such a
subsidiary will be subject to the prior claims of such subsidiaries' creditors
(including, in the case of a subsidiary bank, its depositors) except to the
extent that the Corporation may itself be a creditor with recognized claims
against the subsidiary. Claims on subsidiaries of the Corporation by creditors
other than the Corporation include claims with respect to long-term debt and
substantial obligations with respect to deposit liabilities, federal funds
purchased, securities sold under repurchase agreements and other short-term
borrowings. See "Wachovia Corporation."
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of and premium, if any, and interest on the Securities will be payable
at the office or agency of the Trustee maintained for such purpose in
Philadelphia, Pennsylvania and at any other office or agency maintained by the
Corporation for such purpose, except that, at the option of the Corporation,
interest may be paid by mailing a check to the address of the person entitled
thereto as it appears on the Security Register. The transfer of Securities
(other than Book-Entry Securities) will be registrable for each series of
Securities at the corporate trust office of the Trustee in Philadelphia,
Pennsylvania. (Sections 301, 305 and 1002) Interest on the Securities will be
payable to the person in whose name the Securities are registered at the close
of business on the Regular Record Date designated for an Interest Payment Date.
(Section 307) The Securities will be issued only in fully registered form
without coupons and, unless otherwise indicated in the Applicable Prospectus
Supplement, in denominations of $1,000 or integral multiples thereof. (Section
302) No service charge will be required for any registration of transfer or
exchange of the Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith other than certain exchanges not involving any transfer. (Section 305)
The Applicable Prospectus Supplement will describe the following terms of
the Offered Securities: (a) the title of the Offered Securities; (b) any limit
on the aggregate principal amount of the Offered Securities; (c) the date or
dates on which the Offered Securities will mature; (d) the rate or rates (which
may be fixed or variable) per annum at which the Offered Securities will bear
interest, if any, and the date or dates from which such interest, if any, will
accrue and the dates on which such interest, if any, on the Offered Securities
will be payable and the Regular Record Dates for such Interest Payment Dates;
(e) the place or places, if any, in addition to Philadelphia, Pennsylvania,
where the principal of and premium, if any, and interest on the Offered
Securities will be payable; (f) the period or periods within which, the price or
prices at which and the terms and conditions upon which the Offered Securities
may be redeemed, in whole or in part, at the option of the Corporation; (g) the
obligation, if any, of the Corporation to redeem or purchase the Offered
Securities pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof and the period or periods within which, the price or prices
at which and the terms and conditions upon which Offered Securities shall be
redeemed or purchased, in whole or in part, pursuant to such obligation; (h) if
other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Offered Securities will be issuable; (i) the currency
or currencies of payment of principal of and premium, if any, and interest on
the Offered Securities if other than the currency of the United States of
America; (j) any index used to determine the amount of payment of principal of,
premium, if any, or interest on the Offered Securities; (k) if other than the
principal amount thereof, the portion of the principal amount of the Offered
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<PAGE> 12
Securities which will be payable upon the declaration of acceleration of the
Maturity thereof, (l) the law which will govern the terms of the Securities, if
other than the law of Pennsylvania; (m) information with respect to book-entry
procedures, if any; and (n) any other terms of the Offered Securities. (Section
301)
Securities may be issued as Original Issue Discount Securities to be
offered and sold at a substantial discount below their stated principal amount.
Federal income tax consequences and other special considerations applicable to
any such Original Issue Discount Securities will be described in the Applicable
Prospectus Supplement. "Original Issue Discount Security" means any security
which provides for an amount less than the principal amount thereof to be due
and payable upon the declaration of acceleration of the Maturity thereof upon
the occurrence of an Event of Default and the continuation thereof. (Section
101)
BOOK-ENTRY SECURITIES
The Securities of a series may be issued in the form of one or more
Book-Entry Securities that will be deposited with a Depositary or its nominee
identified in the Applicable Prospectus Supplement. (Section 301) In such a
case, one or more Book-Entry Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of Outstanding Securities of the series to be represented by such Book-Entry
Security or Securities. Unless and until it is exchanged in whole or in part for
Securities in definitive registered form, a Book-Entry Security may not be
transferred except as a whole by the Depositary for such Book-Entry Security to
a nominee of such Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee to
a successor of the Depositary or a nominee of such successor. (Section 305)
The specific terms of the depositary arrangement with respect to any
portion of a series of Securities to be represented by a Book-Entry Security
will be described in the Applicable Prospectus Supplement. The Corporation
anticipates that the following provisions will apply to all depositary
arrangements.
Upon the issuance of a Book-Entry Security, the Depositary for such
Book-Entry Security or its nominee will credit, on its book-entry registration
and transfer system, the respective principal amounts of the Securities
represented by such Book-Entry Security to the accounts of persons that have
accounts with such Depositary ("participants"). Such accounts shall be
designated by the underwriters or agents with respect to such Securities or by
the Corporation if such Securities are offered and sold directly by the
Corporation. Participants include securities brokers and dealers, banks and
trust companies, clearing corporations and certain other organizations. Access
to the Depositary's system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants"). Persons who are not participants may beneficially own Book-Entry
Securities held by the Depositary only through participants or indirect
participants.
Ownership of beneficial interests in any Book-Entry Security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by the Depositary or its nominee (with respect to interests of
participants) for such Book-Entry Security and on the records of participants
(with respect to interests of indirect participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws, as well as the limits on participation
in the Depositary's book-entry system, may impair the ability to transfer
beneficial interests in a Book-Entry Security.
So long as the Depositary or its nominee is the registered owner of a
Book-Entry Security, such Depositary or such nominee will be considered the sole
owner or holder of the Securities represented by such Book-Entry Security for
all purposes under the Indenture. Except as provided below, owners of beneficial
interests in Securities represented by Book-Entry Securities will not be
entitled to have Securities of the series represented by such Book-Entry
Security registered in their names, will not receive or be entitled to receive
physical delivery of such Securities in definitive form, and will not be
considered the owners or holders thereof under the Indenture.
Payments of principal of and any premium and interest on Securities
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered
8
<PAGE> 13
owner of the Book-Entry Security representing such Securities. The Corporation
expects that the Depositary for a series of Securities or its nominee, upon
receipt of any payment of principal, premium or interest, will credit
immediately participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the Book-Entry
Security for such Securities, as shown on the records of such Depositary or its
nominee. The Corporation also expects that payments by participants and indirect
participants to owners of beneficial interests in such Book-Entry Security held
through such persons will be governed by standing instructions and customary
practices, as is now the case with securities registered in "street name", and
will be the responsibility of such participants and indirect participants.
Neither the Corporation, the Trustee, any Authenticating Agent, any Paying Agent
nor the Security Registrar for such Securities will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, beneficial ownership interests in the Book-Entry Security for such
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. (Section 311)
If the Depositary for Securities of a series notifies the Corporation that
it is unwilling or unable to continue as Depositary or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act, the
Corporation has agreed to appoint a successor depositary. If such a successor is
not appointed by the Corporation with 90 days, the Corporation will issue
Securities of such series in definitive registered form in exchange for the
Book-Entry Security representing such series of Securities. In addition, the
Corporation may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more Book-Entry Securities
shall no longer be represented by such Book-Entry Security or Securities and, in
such event, will issue Securities of such series in definitive registered form
in exchange for such Book-Entry Security or Securities representing such series
of Securities. Further, if the Corporation so specifies with respect to the
Securities of a series, or if an Event of Default, or an event which with
notice, lapse of time or both would be an Event of Default with respect to the
Securities of such series has occurred and is continuing, an owner of a
beneficial interest in a Book-Entry Security representing Securities of such
series may receive Securities of such series in definitive registered form. In
any such instance, an owner of a beneficial interest in a Book-Entry Security
will be entitled to physical delivery in definitive registered form of
Securities of the series represented by such Book-Entry Security equal in
principal amount to such beneficial interest and to have such Securities
registered in its name. (Section 305) Securities so issued in definitive form
will be issued in denominations of $1,000 and integral multiples thereof and
will be issued in registered form only, without coupons.
SUBORDINATION OF SECURITIES
The obligations of the Corporation to make any payment on account of the
principal of and premium, if any, and interest on the Securities will be
subordinate and junior in right of payment to all Senior Indebtedness of the
Corporation and, in certain circumstances relating to the dissolution,
winding-up, liquidation of or reorganization of the Corporation, to all
Additional Senior Obligations. (Article Thirteen)
"Senior Indebtedness" is defined in the Indenture to mean (a) all
indebtedness of the Corporation for money borrowed, whether now outstanding or
subsequently created, assumed or incurred, other than (i) the Securities, (ii)
the 7% Subordinated Notes due 1999 of the Corporation in the aggregate principal
amount of $300 million (the "7% Subordinated Notes"), (iii) any obligation
Ranking on a Parity with the Securities (which includes the 6 3/8% Subordinated
Notes due 2003 of the Corporation in the aggregate principal amount of $250
million and the 6 3/8% Subordinated Notes due 2009 of the Corporation in the
aggregate principal amount of $250 million (collectively, the "6 3/8%
Subordinated Notes")), or (iv) any obligation Ranking Junior to the Securities
and (b) any deferrals, renewals or extensions of any such Senior Indebtedness.
The term "indebtedness of the Corporation for money borrowed" shall mean any
obligation of, or any obligation guaranteed by, the Corporation for repayment of
borrowed money, whether or not evidenced by bonds, debentures, notes or other
written instruments, and any deferred obligations for payment of the purchase
price of property or assets acquired other than in the ordinary course of
business. "Additional Senior Obligations" is defined in the Indenture to mean
all indebtedness of the Corporation, whether now outstanding or subsequently
created, assumed or incurred, for claims in respect of derivative products such
as interest and foreign exchange rate contracts, commodity contracts and similar
arrangements; provided, however, that
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<PAGE> 14
Additional Senior Obligations do not include (a) any claims in respect of Senior
Indebtedness, or (b) any obligations (i) Ranking Junior to the Securities, or
(ii) Ranking on a Parity with the Securities. For purposes of this definition,
"claim" shall have the meaning assigned thereto in Section 101(4) of the United
States Bankruptcy Code of 1978. Section 101 of the Indenture does not limit or
prohibit the incurrence of Senior Indebtedness or Additional Senior Obligations.
The term "Ranking Junior to the Securities" is defined in the Indenture to
mean any obligation of the Corporation which (a) ranks junior to and not equally
with or prior to the Securities in right of payment upon the happening of any
insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities or similar proceedings or any liquidation
or winding-up of or relating to the Corporation as a whole, whether voluntary or
involuntary, and (b) is specifically designated as ranking junior to the
Securities by express provisions in the instrument creating or evidencing such
obligation.
The term "Ranking on a Parity with the Securities" is defined in the
Indenture to mean any obligation of the Corporation which (a) ranks equally with
and not prior to the Securities in right of payment upon the happening of any
insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities or similar proceedings or any liquidation
or winding-up of or relating to the Corporation as a whole, whether voluntary or
involuntary, and (b) is specifically designated as ranking on a parity with the
Securities by express provision in the instrument creating or evidencing such
obligation. (Section 101)
The Securities will be subordinate in right of payment to all Senior
Indebtedness, as provided in the Indenture. No payment on account of the
principal of and premium, if any, or interest in respect of the Securities may
be made if there shall have occurred and be continuing a default in payment with
respect to Senior Indebtedness or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity thereof. Upon any
payment or distribution of assets to creditors upon any insolvency,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation or
winding-up of or relating to the Corporation as a whole, whether voluntary or
involuntary, (a) the holders of all Senior Indebtedness will first be entitled
to receive payment in full before the Holders of the Securities will be entitled
to receive any payment in respect of the principal of and premium, if any, or
interest on the Securities, and (b) if after giving effect to the operation of
clause (a) above, (i) any amount of cash, property or securities remains
available for payment or distribution in respect of the Securities ("Excess
Proceeds"), and (ii) creditors in respect of Additional Senior Obligations have
not received payment in full of amounts due or to become due thereon or payment
of such amounts has not been duly provided for, then such Excess Proceeds shall
first be applied to pay or provide for the payment in full of all such
Additional Senior Obligations before any payment may be made on the Securities.
If the Holders of Securities receive payment and are aware at the time of
receiving payment that all Senior Indebtedness and Additional Senior Obligations
have not been paid in full, then such payment shall be held in trust for the
benefit of the holders of Senior Indebtedness and/or Additional Senior
Obligations, as the case maybe. (Section 1301) By reason of such subordination,
in the event of insolvency, Holders of the Securities may recover less, ratably,
than holders of Senior Indebtedness and holders of Additional Senior
Obligations.
Neither the Securities (and the 6 3/8% Subordinated Notes, which Rank on a
Parity with the Securities) nor the 7% Subordinated Notes are by their term
subordinate or senior to the other. However, the 7% Subordinated Notes by their
terms are subordinated to Senior Indebtedness and Additional Senior Obligations
and to all other obligations of the Corporation to its creditors (subject to
certain exceptions specified in the indenture pursuant to which the 7%
Subordinated Notes are outstanding). As a result of the differences between the
subordination provisions applicable to the Securities and the 6 3/8%
Subordinated Notes and those applicable to the 7% Subordinated Notes, in the
event of any insolvency, receivership, conservatorship, reorganization,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings or any liquidation or winding up of or relating to the Corporation,
the holders of the Securities and the 6 3/8% Subordinated Notes may receive
more, ratably, than the holders of the 7% Subordinated Notes.
10
<PAGE> 15
EVENTS OF DEFAULT; LIMITED RIGHTS OF ACCELERATION
The Indenture (with respect to any series of Securities) defines an "Event
of Default" as any one of the following events (whatever the reason and whether
it be occasioned by the subordination provisions or be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body): (a) failure to pay any interest on any Security of that
series when due and payable, continued for 30 days, whether or not such payment
is prohibited by the subordination provisions of the Indenture; (b) failure to
pay principal of or any premium on any Security of that series when due; (c)
failure to deposit any sinking fund payment, when due, in respect of any
Security of that series, whether or not such payment is prohibited by the
subordination provisions of the Indenture; (d) failure to perform any other
covenants or warranties of the Corporation in the Indenture (other than a
covenant included in the Indenture solely for the benefit of a series of
Securities thereunder other than that series) continued for 60 days after
written notice as provided in the Indenture; (e) the entry of a decree or order
for relief in respect of the Corporation by a court having jurisdiction in the
premises in an involuntary case under Federal or state bankruptcy laws and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; (f) the commencement by the Corporation of a voluntary case
under Federal or state bankruptcy laws or the consent by the Corporation to the
entry of a decree or order for relief in an involuntary case under any such law;
and (g) any other Event of Default provided with respect to Securities of that
series. (Section 501)
Unless specifically stated in the Applicable Prospectus Supplement for a
particular series of Securities, the payment of the principal of the Securities
may be accelerated only upon the occurrence of an Event of Default described in
clause (e) or clause (f) of the preceding paragraph (a "Bankruptcy Event of
Default") and there is no right of acceleration of the payment of principal of
the Securities of such series upon a default in the payment of principal,
premium, if any, or interest, if any, or in the performance of any covenant or
agreement in the Securities or 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 Securities or 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) Under certain circumstances, the Trustee may
withhold notice to the Holders of the Securities in a default if the Trustee in
good faith determines that the withholding of such notice is in the best
interest of such Holders, and the Trustee shall withhold such notice for certain
defaults for a period of 30 days. (Section 602)
If a Bankruptcy Event of Default with respect to the Securities of any
series at the time Outstanding occurs and is continuing, either the Trustee or
the Holders of at least 25 percent in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms thereof) of all
the Securities of that series to be due and payable immediately. At any time
after a declaration of acceleration with respect to Securities of any series has
been made, but before a judgment or decree based on acceleration has been
obtained, the Holders of a majority in aggregate principal amount of Outstanding
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. (Section 502)
Reference is made to the Prospectus Supplement relating to any series of
Offered Securities that are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Stated Maturity of a
portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity. (Section 603) Subject
to such provisions for the indemnification of the Trustee and to certain other
conditions, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series will have the right to direct the time,
method and place of conducting any
11
<PAGE> 16
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of that series.
(Section 512)
No Holder of any series of Securities will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or trustee or for any remedy thereunder, unless such Holder shall have
previously given to the Trustee under the Indenture written notice of a
continuing Event of Default and unless the Holders of at least 25 percent in
aggregate principal amount of the Outstanding Securities of that series shall
have made written request, and offered reasonable indemnity, to such Trustee to
institute such proceeding as trustee, and such Trustee shall not have received
from the Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. (Section 507) However,
such limitations do not apply to a suit instituted by a Holder of a Security for
enforcement of payment of the principal of and premium, if any, or interest on
such Security on or after the respective due dates expressed in such Security.
(Section 508)
The Corporation is required to furnish to the Trustee annually a statement
as to the performance by the Corporation of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1005)
MODIFICATION AND WAIVER
Modification and amendment of the Indenture may be made by the Corporation
and the Trustee under the Indenture with the consent of the Holders of not less
than a 66 2/3% in aggregate principal amount of the Outstanding Securities of
each series issued under the Indenture and affected by the modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holders of each Outstanding Security of the series
affected thereby (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security of such series; (b)
reduce the principal amount of or premium, if any, or interest on, any Security
of any series (including in the case of an Original Issue Discount Security the
amount payable upon acceleration of the maturity thereof); (c) change the place
or currency of payment of principal of or the premium, if any, or interest on
any Security of such series; (d) impair the right to institute suit for the
enforcement of any payment on any Security of such series on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date); (e) modify the subordination provision in a manner adverse to the Holders
of the Securities of such series; or (f) reduce the percentage in principal
amount of Outstanding Securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults. (Section 902)
The Holders of at least a 66 2/3% in aggregate principal amount of the
Outstanding Securities of any series may, on behalf of all Holders of that
series of Securities, waive compliance by the Corporation with certain
restrictive provisions of the Indenture. (Section 1006) The Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series may, on behalf of all Holders of that series of Securities, waive any
past default under the Indenture, except a default in the payment of principal,
premium, if any, or interest and in respect of certain covenants. (Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Corporation may not consolidate with or merge into any other
corporation or sell, convey, exchange, transfer or lease its properties and
assets substantially as an entirety to any Person, unless (a) any successor or
purchaser is a corporation organized under the laws of any domestic
jurisdiction; (b) any such successor or purchaser expressly assumes the
Corporation's obligations on such Securities and under the Indenture; (c)
immediately after giving effect to such 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; and (d) certain other conditions
are met. (Section 801)
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ASSUMPTION BY SUBSIDIARY
A Subsidiary may assume the Corporation's obligations under the Indenture
(including the Corporation's obligation to pay principal of and premium, if any,
and interest on the Securities, but excluding the Corporation's obligation to
comply with certain covenants) provided that (a) such Subsidiary expressly
assumes the Corporation's obligations under the Indenture; (b) the Corporation
guarantees such Subsidiary's obligations; (c) such Subsidiary agrees to
indemnify each Holder against certain taxes and expenses relating to, or
incurred directly in connection with, such assumption; (d) immediately after
giving effect to the assumption, 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; (e) certain Opinions of Counsel and Officers'
Certificates are delivered to the Trustee; and (f) certain other obligations are
met. (Section 803)
THE TRUSTEE
CoreStates Bank, National Association is the Trustee under the Indenture.
CoreStates Bank, National Association maintains a deposit account and conducts
other banking transactions with the Corporation and its subsidiaries in the
ordinary course of business, serves as trustee under the indenture pursuant to
which the 7% Subordinated Notes are outstanding and serves as trustee with
respect to the 6 3/8% Subordinated Notes, which are outstanding pursuant to the
Indenture. The Indenture provides for the indemnification of the Trustee by the
Corporation under certain circumstances.
PLAN OF DISTRIBUTION
The Corporation may offer and sell Securities to or through underwriters,
acting as principals for their own accounts or as agents, and also may offer and
sell Securities directly to other purchasers. Any underwriters or agents in
connection with Offered Securities will be named in the related Prospectus
Supplement and any underwriting compensation paid to such underwriters or agents
will be set forth therein. Such underwriters may include a single firm or may be
a group of underwriters represented by such firm. Unless otherwise indicated in
the Prospectus Supplement, any underwriters will be required to purchase all of
the Offered Securities if any are purchased.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Corporation and from purchasers of Securities for whom
they may act as agents, in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters and any discounts or commissions
received by them and any profit on the resale of Securities by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
Under agreements which may be entered into with the Corporation,
underwriters, dealers and agents who participate in the distribution of the
Offered Securities may be entitled to indemnification by the Corporation against
certain liabilities, including liabilities under the Securities Act, or
contribution with respect to payments which the underwriters, dealers or agents
may be required to make in respect thereof. Underwriters, dealers and agents may
be customers of, engage in transactions with, or perform services for the
Corporation and its subsidiaries in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Corporation will
authorize dealers or other persons acting as the Corporation's agents to solicit
offers by certain institutions to purchase Offered Securities from the
Corporation pursuant to delayed delivery contracts ("Contracts") providing for
payment and delivery on a future date or dates stated in the Prospectus
Supplement. Each Contract will be for an amount not less than, and the aggregate
amount of Offered Securities sold pursuant to Contracts shall not be less than
nor more than, the respective amounts stated in the Prospectus Supplement.
Institutions with which Contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the
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<PAGE> 18
Corporation. The obligations of any purchaser under any Contract will not be
subject to any conditions except that (a) the purchase of the Offered Securities
shall not at the time of delivery be prohibited under the laws of any
jurisdiction to which such purchaser is subject, and (b) if the Offered
Securities are also being sold to underwriters, the Corporation will have sold
to such underwriters the Offered Securities not sold for delayed delivery. The
dealers and such other persons acting as agents of the Corporation will not have
any responsibility in respect of the validity or performance of Contracts.
EXPERTS
The audited consolidated financial statements of Wachovia Corporation and
subsidiaries incorporated by reference in this Prospectus and elsewhere in the
Registration Statement have been audited by Ernst & Young, independent auditors,
and, insofar as they relate to South Carolina National Corporation for the year
ended December 31, 1991, by Price Waterhouse, independent auditors, as set forth
in their reports thereon and incorporated herein by reference. The financial
statements referred to above are incorporated herein by reference in reliance
upon such reports given upon the authority of such firms as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the
Corporation by Kenneth W. McAllister, General Counsel of the Corporation, and
for any underwriters or agents by King & Spalding, Atlanta, Georgia. As to
matters of Pennsylvania law, Mr. McAllister and King & Spalding will rely on the
opinion of Drinker Biddle & Reath, Philadelphia, Pennsylvania. From time to
time, King & Spalding has provided and may in the future provide legal services
to the Corporation and its subsidiaries.
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NO DEALER, SALESPERSON, OR OTHER INDIVIDUAL 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 BY THE CORPORATION OR THE UNDERWRITERS. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION SINCE THE DATE
HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER
OR SOLICITATION BY ANYONE 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.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Wachovia Corporation................... S-2
Consolidated Ratio of Earnings to Fixed
Charges.............................. S-2
Description of Subordinated Notes...... S-3
Underwriting........................... S-4
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
Wachovia Corporation................... 2
Certain Regulatory Considerations...... 3
Consolidated Ratio of Earnings to Fixed
Charges.............................. 6
Use of Proceeds........................ 6
Description of Securities.............. 6
Plan of Distribution................... 13
Experts................................ 14
Legal Matters.......................... 14
</TABLE>
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$250,000,000
WACHOVIA CORPORATION
6.80% SUBORDINATED
NOTES DUE 2005
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
J.P. MORGAN SECURITIES INC.
WACHOVIA BANK OF
NORTH CAROLINA, N.A.
JUNE 1, 1995
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