As filed with the Securities and Exchange Commission on August 29, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NEW YORK BANCORP INC. NEW YORK BANCORP CAPITAL TRUST
(Exact name of registrant as specified (Exact name of registrant as specified
in its Charter in its Declaration of Trust)
Delaware Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
6035
(Primary standard industrial (Primary standard industrial
classification code number) classification code number)
11-2869250 APPLIED FOR
(l.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
C/O NEW YORK BANCORP INC.
241-02 NORTHERN BOULEVARD 241-02 NORTHERN BOULEVARD
DOUGLASTON, NEW YORK 11362 DOUGLASTON, NEW YORK 11362
(718) 631-8100 (718) 631-8100
(Address, Including Zip Code, and (Address, Including Zip Code, and
Telephone Number, Including Area Code, Telephone Number, Including Area Code,
of Registrant's Principal of Registrant's Principal
Executive Offices) Executive Offices)
Michael A. McManus, Jr.
President and Chief Executive Officer
New York Bancorp Inc.
241-02 Northern Boulevard
Douglaston, New York 11362
(718) 631-8100
(Name and Address, Including Zip Code,
and Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Dennis J. Block, Esq. Frank M. Conner, III, Esq.
Weil, Gotshal & Manges LLP Alston & Bird LLP
767 Fifth Avenue 601 Pennsylvania Avenue, N.W.
New York, New York 10153 North Building, Suite 250
(212) 310-8000 Washington, D.C. 20004-2601
(202) 508-3300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or reinvestment plans, please check the following box. [ ]
If any of the securities being registered on the Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered in connection with dividend or interest
reinvestment plans, please check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
NYFS10...:\81\65281\0001\1819\REG8157R.28D
<PAGE>
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CALCULATION OF REGISTRATION FEE
=====================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Offering Amount of
Securities to be Registerd Registered Per Unit Price Registration Fee
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<S> <C> <C> <C> <C>
8.00% Convertible Trust
Preferred Securities of New 2,000,000 $25.00 $50,000,000 $15,152
York Bancorp Capital Trust
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Junior Convertible
Subordinated Debentures of -- -- -- --
New York Bancorp Inc. (1)
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Common Stock, par value
$0.01 per share, of New York (2) -- -- --
Bancorp Inc.
- ---------------------------------------------------------------------------------------------------------------------
New York Bancorp Inc.
Guarantee with respect to the -- -- -- --
Capital Securities (3)..........
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Total (4)....................... 2,000,000 $25.00 $50,000,000(5) $15,152
=====================================================================================================================
</TABLE>
(1) The Junior Convertible Subordinated Debentures (the "Junior Subordinated
Debentures") to be issued by New York Bancorp Inc. (the "Company") will be
purchased by New York Bancorp Capital Trust (the "Trust") with the
proceeds of the sale of the Convertible Trust Preferred Securities (the
"Capital Securities"). No separate consideration will be received for the
Junior Subordinated Debentures distributed upon any liquidation of the
Trust.
(2) Such indeterminate number of shares of common stock, par value $0.01 per
share, of the Company (the "Common Stock") as may be issuable upon
conversion of the Capital Securities registered hereunder. Shares of
Common Stock issued upon conversion of the Capital Securities will be
issued without the payment of additional consideration. This Registration
Statement also covers such shares as may be issuable upon such conversion
pursuant to anti-dilution adjustments.
(3) No separate consideration will be received for the Company's Guarantee
with respect to the Capital Securities (the "Guarantee").
(4) This Registration Statement is deemed to cover the Junior Subordinated
Debentures, the rights of holders of Junior Subordinated Debentures under
the Indenture, the rights of holders of Capital Securities under the
Amended and Restated Declaration of Trust and the rights of holders of
Capital Securities under the Guarantee, which together fully and
unconditionally guarantee the obligations of the Trust with respect to the
Capital Securities.
(5) Such amount represents the aggregate liquidation amount of the Capital
Securities to be issued hereunder and the principal amount of Junior
Subordinated Debentures that may be distributed to holders of Capital
Securities upon any liquidation of the Trust.
-------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE OR UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
2
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offre to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securuties laws of any such state.
SUBJECT TO COMPLETION, DATED AUGUST 29, 1997
SUBSCRIPTION OFFERING
PROSPECTUS
2,000,000 CAPITAL SECURITIES
NEW YORK BANCORP CAPITAL TRUST
8.00% CONVERTIBLE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
NEW YORK BANCORP INC.
The 8.00% Convertible Trust Preferred Securities (the "Capital Securities")
offered hereby represent preferred undivided beneficial interests in the assets
of New York Bancorp Capital Trust, a statutory business trust created under the
laws of the State of Delaware (the "Trust"). New York Bancorp Inc., a Delaware
corporation ("NYB" or the "Company"), will be the owner of all the beneficial
interests represented by the common securities of the Trust (the "Common
Securities" and, together with the Capital Securities, the "Trust Securities").
The Trust exists for the sole purpose of issuing the Trust Securities and
investing the proceeds thereof in 8.00% Junior Convertible Subordinated
Debentures (the "Junior Subordinated Debentures") to be issued by NYB. The
Junior Subordinated Debentures will mature on ________, 2027 (the "Stated
Maturity Date"). The Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise. See "Description of
Capital Securities -- Subordination of Common Securities."
Each Capital Security is convertible in the manner described herein at the
option of the holder thereof, at any time prior to the earlier of (i) 5:00 p.m.
(New York City time) on the Business Day (as defined herein) immediately
preceding the date of repayment of such Capital Security, whether at maturity or
upon redemption, and (ii) 5:00 p.m. (New York City time) on the Conversion
Termination Date (as defined herein), if any, into a number of shares of the
Company's common stock, par value $.01 per share (the "Common Stock") that
equals the quotient obtained by dividing (i) $25 by (ii) 110% of the average of
the daily last reported sale prices of the Common Stock for the 10 consecutive
trading days immediately preceding the date of the Public Offering Prospectus
(as defined herein) or, in the event all of the Capital Securities offered
hereby are sold in the Subscription Offering (as defined herein), for the 10
consecutive trading days immediately preceding the Subscription Offering
Expiration Date (as defined herein), in each case as reported on the New York
Stock Exchange, Inc. ("NYSE") Composite Tape, subject to adjustment in certain
circumstances. See "Description of Capital Securities -- Conversion Rights." The
Common Stock is listed on the NYSE under the symbol "NYB." On ________, 1997,
the last reported sale price of the Common Stock on the NYSE Composite Tape was
$____ per share.
The Capital Securities offered hereby are being offered in a subscription
offering (the "Subscription Offering") through nontransferable subscription
rights ("Subscription Rights") granted to holders of record of the Common Stock
on _________, 1997 ("Eligible Subscribers"). The Subscription Offering is being
made by _______________, as sales agent (the "Sales Agent"). All Capital
Securities offered hereby and not sold in the Subscription Offering, if any,
will be offered in a public offering (the "Public Offering" and, together with
the Subscription Offering, the "Offerings") by Keefe, Bruyette & Woods, Inc., as
underwriter (the "Underwriter"). See "The Offerings."
(continued on next page)
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
INVESTORS IN EVALUATING AN INVESTMENT IN THE CAPITAL SECURITIES, SEE "RISK
FACTORS" BEGINNING ON PAGE 9 OF THIS PROSPECTUS.
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 COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
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===========================================================================================
UNDERWRITING DISCOUNT PROCEEDS TO
OFFERING PRICE(1) AND AGENT FEES (2) THE TRUST(3)(4)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Capital Security......... $25.00 (3) $25.00
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Total........................ $50,000,000 (3) $50,000,000
===========================================================================================
</TABLE>
(1) Plus accumulated Distributions (as defined herein), if any, from the Issue
Date (as defined herein).
(2) The Company and the Trust have agreed to indemnify the Sales Agent in the
Subscription Offering and the Underwriter in the Public Offering against
certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act"). See "The Offerings."
(3) As the proceeds of the sale of the Capital Securities will be invested in
the Junior Subordinated Debentures, the Company has agreed to pay to the
Sales Agent and the Underwriter certain fees for their services in the
Subscription Offering and the Public Offering. For a discussion of the fees
to be paid to the Sales Agent and the Underwriter, see "The Offerings."
(4) Before deducting expenses of the Offerings which are payable by the Company,
estimated at $________.
The date of this Prospectus is ________, 1997.
<PAGE>
(continued from previous page)
All Capital Securities offered in the Subscription Offering and, if
applicable, the Public Offering will be offered at the "Offering Price," equal
to the liquidation amount of $25.00 per Capital Security (the "Liquidation
Amount"). No Eligible Subscriber is required to subscribe for Capital Securities
in the Subscription Offering. The nontransferable Subscription Rights will
expire unless exercised by not later than 5:00 p.m. (New York City time) on
________, 1997, unless otherwise extended by the Company. Eligible Subscribers
who wish to subscribe for the Capital Securities should deliver their
Subscription Order Form and payment to the Sales Agent not later than 5:00 p.m.
(New York City time) on _______, 1997, unless the Subscription Offering is
otherwise extended, in which event such Subscription Order Form and payment
should be delivered not later than 5:00 p.m. (New York City time) on the date to
which the Subscription Offering has been extended. An executed Subscription
Order Form, once accepted, may not be modified, amended or rescinded without the
consent of the Company and the Trust. See "The Offerings."
Holders of the Capital Securities will be entitled to receive cumulative
cash distributions, accumulating from the original date of issuance of the
Capital Securities (the "Issue Date") and payable quarterly in arrears on
January 31, April 30, July 31 and October 31 of each year, commencing
______________, 1997, at the annual rate of 8.00% of the Liquidation Amount of
$25.00 per Capital Security ("Distributions"). So long as no Debenture Event of
Default (as defined herein) has occurred and is continuing, the Company will
have the right to defer payments of interest on the Junior Subordinated
Debentures at any time and from time to time for a period not exceeding 20
consecutive quarters with respect to each deferral period (each, an "Extension
Period"), provided that no Extension Period may end on a day other than an
Interest Payment Date (as defined herein) or extend beyond the Stated Maturity
Date. Upon the termination of any such Extension Period and the payment of all
amounts then due, the Company may elect to begin a new Extension Period, subject
to the requirements set forth herein. If and for so long as interest payments on
the Junior Subordinated Debentures are so deferred, Distributions on the Trust
Securities also will be deferred and the Company will not be permitted, subject
to certain exceptions described herein, to declare or pay any cash distributions
with respect to the Company's capital stock or to make any payment with respect
to debt securities of the Company that rank pari passu with or junior to the
Junior Subordinated Debentures. During an Extension Period, interest on the
Junior Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of the Trust Securities are entitled will
continue to accumulate) at the rate of 8.00% per annum, compounded quarterly (to
the extent permitted by applicable law), and holders of Trust Securities will be
required to accrue interest income for United States federal income tax purposes
prior to receipt of cash payments attributable to such interest income. See
"Description of Junior Convertible Subordinated Debentures -- Option to Extend
Interest Payment Date" and "Certain Federal Income Tax Considerations --
Interest, Original Issue Discount, Premium and Market Discount."
The Company will, through the Guarantee, the Common Guarantee, the
Declaration, the Junior Subordinated Debentures and the Indenture (each as
defined herein), taken together, fully, irrevocably and unconditionally
guarantee all of the Trust's obligations under the Trust Securities. See
"Relationship Among the Capital Securities, the Junior Subordinated Debentures
and the Guarantee -- Full and Unconditional Guarantee." The Guarantee and the
Common Guarantee will guarantee payments of distributions and payments on
liquidation or redemption of the Trust Securities, but in each case only to the
extent that the Trust holds funds on hand legally available therefor and has
failed to make such payments, as described herein. See "Description of the
Guarantee." If the Company fails to make a required payment on the Junior
Subordinated Debentures, the Trust will not have sufficient funds to make the
related payments, including distributions, on the Trust Securities. The
Guarantee and the Common Guarantee will not cover any such payment when the
Trust does not have sufficient funds on hand legally available therefor. In such
event, a holder of Capital Securities may institute a legal proceeding directly
against the Company to enforce payment to such holder of accrued but unpaid
interest on the Junior Subordinated Debentures with a principal amount equal to
the Liquidation Amount of the Capital Securities held by such holder. See
"Description of Junior Convertible Subordinated Debentures -- Enforcement of
Certain Rights by Holders of Capital Securities." The obligations of the Company
under the Junior Subordinated Debentures, the Guarantee and
(ii)
<PAGE>
the Common Guarantee will be unsecured and subordinate and rank junior in right
of payment to all Senior Indebtedness (as defined herein) of the Company to the
extent and in the manner set forth in the Indenture and the Guarantees. See
"Description of Junior Convertible Subordinated Debentures -- Subordination."
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated Maturity
Date upon repayment of the Junior Subordinated Debentures at a redemption price
equal to the principal amount of, plus accrued and unpaid interest on, the
Junior Subordinated Debentures (the "Maturity Redemption Price"), (ii) in whole
but not in part, at any time, contemporaneously with the optional prepayment of
all of the Junior Subordinated Debentures, upon the occurrence and continuation
of a Special Event (as defined herein), at a redemption price equal to the
Special Event Prepayment Price (as defined herein) (the "Special Event
Redemption Price"), and (iii) in whole or in part, on or after __________, 2001
(the "Initial Optional Prepayment Date"), contemporaneously with the optional
prepayment by the Company of all or a part of the Junior Subordinated
Debentures, at a redemption price equal to the Optional Prepayment Price (as
defined herein) (the "Optional Redemption Price"). Any of the Maturity
Redemption Price, the Special Event Redemption Price and the Optional Redemption
Price may be referred to herein as the "Redemption Price." See "Description of
Capital Securities -- Redemption."
The Junior Subordinated Debentures will be prepayable prior to the Stated
Maturity Date at the option of the Company (i) on or after ___________, 2001
(the "Initial Optional Prepayment Date"), in whole or in part, at a prepayment
price (the "Optional Prepayment Price") equal to 100% of the principal amount
thereof, plus accrued and unpaid interest thereon to the date of prepayment, or
(ii) at any time, in whole but not in part, upon the occurrence and continuation
of a Special Event, at a prepayment price (the "Special Event Prepayment Price")
equal to 100% of the principal amount thereof plus accrued and unpaid interest
thereon to the date of prepayment. Either of the Optional Prepayment Price or
the Special Event Prepayment Price may be referred to herein as the "Prepayment
Price." See "Description of Junior Convertible Subordinated Debentures --
Optional Prepayment" and " -- Special Event Prepayment."
The Company, as the holder of the outstanding Common Securities, will have
the right at any time to dissolve the Trust and after satisfaction of
liabilities to creditors of the Trust as required by applicable law, cause a
Like Amount of the Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust, subject to the
Company having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of the Capital Securities.
Unless the Junior Subordinated Debentures are distributed to the holders of the
Trust Securities, in the event of a liquidation of the Trust as described
herein, after satisfaction of liabilities to creditors of the Trust as required
by applicable law, the holders of the Capital Securities generally will be
entitled to receive a Liquidation Amount of $25.00 per Capital Security plus
accumulated and unpaid Distributions thereon to the date of payment. See
"Description of Capital Securities -- Liquidation of the Trust and Distribution
of Junior Subordinated Debentures" and "Certain Federal Income Tax
Considerations -- Receipt of Junior Subordinated Debentures Upon Liquidation of
the Trust" and " -- Sale or Redemption of Capital Securities."
If for at least 20 trading days within any period of 30 consecutive
trading days ending on or after __________, including the last trading day of
such period, the Closing Price (as defined herein) of the Common Stock exceeds
1__% of the then applicable Conversion Price of the Capital Securities, the
Company may, at its option, terminate the right to convert the Junior
Subordinated Debentures into Common Stock, in which case the right to convert
the Capital Securities into Common Stock will likewise terminate. To exercise
this conversion termination option, the Company must cause the Trust to issue a
press release announcing the date upon which conversion rights will expire (the
"Conversion Termination Date"), prior to the opening of business on the second
trading day after a period in which the condition in the preceding sentence has
been met, but in no event may such press release be issued prior to __________.
The Conversion Termination Date shall be a Business Day not less than 30 and not
more than 60 days following the date of the press release described above. See
"Description of Capital Securities -- Conversion Rights."
(iii)
<PAGE>
As used herein, (i) the "Indenture" means the Indenture, to be dated as of
______, 1997, as amended and supplemented from time to time, between the Company
and The Bank of New York, as trustee (the "Debenture Trustee"), relating to the
Junior Subordinated Debentures, (ii) the "Declaration" means the Amended and
Restated Declaration of Trust relating to the Trust, to be dated as of ______,
1997, among the Company, as Sponsor, The Bank of New York, as Property Trustee
(the "Property Trustee"), The Bank of New York (Delaware), as Delaware Trustee
(the "Delaware Trustee" and, collectively with the Property Trustee, the "Issuer
Trustees"), the Administrators named therein (the "Administrators") and the
holders from time to time of the Trust Securities, (iii) the "Guarantee" means
the Guarantee Agreement relating to the Capital Securities, to be dated as of
______, 1997, between the Company and The Bank of New York, as trustee (the
"Guarantee Trustee") and (iv) the "Common Guarantee" means the Guarantee
Agreement relating to the Common Securities by the Company, to be dated as of
______, 1997.
IN CONNECTION WITH THE PUBLIC OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CAPITAL
SECURITIES AND OF THE COMPANY'S COMMON STOCK AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE
NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
(iv)
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the securities offered
by this Prospectus. This Prospectus does not contain all the information set
forth in the Registration Statement and exhibits thereto. In addition, certain
documents filed by the Company with the Commission have been incorporated in
this Prospectus by reference. See "Incorporation of Certain Documents by
Reference." For further information with respect to the Company and the
securities offered hereby, reference is made to the Registration Statement,
including the exhibits thereto, and the documents incorporated herein by
reference. Statements contained in this Prospectus as to the contents of any
instrument, agreement or other document do not purport to be complete and in
each instance reference is made to the copy of such instrument, agreement or
other document, copies of which are available from the Company as described
below, each such statement being qualified in all respects by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information concerning the
Company can be inspected and copied at prescribed rates at the Commission's
Public Reference Room, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, as well as the following Regional Offices of the Commission: 7 World
Trade Center, 13th Floor, New York, New York 10048; and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained by
mail from the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. If available, such reports and
other information may also be accessed through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR") via electronic means,
including the Commission's web site on the Internet (http://www.sec.gov). Such
reports, proxy statements and other information may also be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
No separate financial statements of the Trust have been included herein.
Neither the Company nor the Trust consider that such financial statements would
be material to holders of the Capital Securities because (i) all of the voting
securities of the Trust will be owned, directly or indirectly, by the Company, a
reporting company under the Exchange Act, (ii) the Trust has no independent
operations but exists for the sole purpose of issuing securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in Junior Subordinated Debentures issued by the Company, and
(iii) the Company's obligations described herein to provide certain indemnities
in respect of, and be responsible for, certain costs, expenses, debts and
liabilities of the Trust under the Indenture and any supplemental indenture
thereto and pursuant to the Declaration of the Trust, the Guarantee issued with
respect to the Capital Securities issued by the Trust, the Junior Subordinated
Debentures purchased by the Trust and the related Indenture, taken together,
constitute a full and unconditional guarantee of payments due on the Capital
Securities. See "Description of Junior Convertible Subordinated Debentures" and
"Description of the Guarantee." In addition, the Company does not expect that
the Trust will file reports, proxy statements and other information under the
Exchange Act with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company pursuant
to Sections 13 and 14 of the Exchange Act are incorporated by reference in this
Prospectus:
(1) Annual Report on Form 10-K for the fiscal year ended September 30,
1996;
(2) Quarterly Reports on Form 10-Q for the quarters ended December 31,
1996, March 31, 1997 and June 30, 1997, respectively; and
(3) Current Report on Form 8-K, dated January 2, 1997.
<PAGE>
All documents filed by the Company pursuant to Sections 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 in this Prospectus, and to be a part
hereof from the date of filing of such documents. Any statement contained in
this Prospectus or 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 or any supplement thereto to the extent that a statement
contained herein or therein (or in any subsequently filed document that also is
or is deemed to be incorporated by reference herein or therein) modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document. The Company will provide
without charge to each person to whom a copy of this Prospectus has been
delivered, upon the written or oral request of such person, a copy of any or all
of the documents referred to above which have been or may be incorporated by
reference herein (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference in such documents), as well as a copy of
the Declaration, the Indenture, the Junior Subordinated Debentures, the
Guarantee and the other documents described herein. Requests for such copies
should be directed to New York Bancorp Inc., 241-02 Northern Boulevard,
Douglaston, New York 11362. Attention: Linda Bishop, Telephone (718) 631-8100.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the statements contained in this Prospectus and in documents
incorporated herein by reference that are not historical facts, including,
without limitation, statements of future expectations, projections of results of
operations and financial condition, statements of future economic performance
and other forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, are subject to known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to differ materially from those
contemplated in such forward-looking statements. In addition to the specific
matters referred to herein, including, without limitation, those noted under the
caption "Risk Factors," important factors which may cause actual results to
differ from those contemplated in such forward-looking statements include: (i)
the results of the Company's efforts to implement its business strategy; (ii)
the effect of economic conditions and the performance of borrowers; (iii)
actions of the Company's competitors and the Company's ability to respond to
such actions; (iv) the cost of the Company's capital, which may depend in part
on the Company's portfolio quality, ratings, prospects and outlook; (v) changes
in governmental regulation, tax rates and similar matters; and (vi) other risks
detailed in the Company's other filings with the Commission.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in, or incorporated by reference into, this
Prospectus.
NEW YORK BANCORP INC.
The Company is a Delaware chartered savings and loan holding company,
headquartered in Douglaston, New York. Through its wholly-owned subsidiary, Home
Federal Savings Bank, a federally chartered stock savings bank (the "Bank"), the
Company operates 30 banking offices (of which five are supermarket branches and
25 are stand-alone branches) and seven loan production offices. At June 30,
1997, the Company had total consolidated assets of approximately $3.3 billion,
deposits of approximately $1.7 billion, and stockholders' equity of
approximately $166.9 million.
The directors and executive officers of the Company own in the aggregate
approximately 26% of the outstanding Common Stock. Management's strategy is
focused on enhancing stockholder value by expanding the customer base of the
Bank and increasing the market penetration of the Bank within its existing
markets. Since 1991, expansion of the franchise has been achieved through the
acquisition of three institutions or the assets thereof, which combined, added
approximately $1.5 billion in assets and 18 branch offices. As acquisition
premiums have reached historic highs in recent years, the Company has, in lieu
of building the franchise through acquisitions, instead focused on expanding the
branch network through the opening of supermarket branches. Currently, the Bank
maintains five supermarket branches and has plans to establish six additional
supermarket branches during fiscal 1998. By expanding its branch network through
the establishment of supermarket branches, the Company will be able to penetrate
further its market area on an accelerated basis and with much lower levels of
capital investment and ongoing operating expense relative to opening and
operating stand-alone branch offices.
As a result of the focus of management on enhancing stockholder value, the
Company has enjoyed superior performance measures. For the year ended September
30, 1996, the Company's return on average assets and return on average
stockholders' equity (after recording a SAIF recapitalization charge of
approximately $9.4 million) were 1.16% and 20.26%, respectively. For the nine
months ended June 30, 1997, the Company's return on average assets and
stockholder's equity were 1.61% and 31.08%, respectively. Contributing to the
superior performance of the institution is the Company's aggressive control of
expenses, as evidenced by its efficiency ratios of 42.96% and 38.15% for the
year ended September 30, 1996 and the nine months ended June 30, 1997,
respectively.
NEW YORK BANCORP CAPITAL TRUST
The Trust is a statutory business trust created under Delaware law
pursuant to (i) a declaration of trust, executed by the Company, as Sponsor, The
Bank of New York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee and Stan I. Cohen, as Initial Trustee, and (ii) the filing of a
certificate of trust with the Delaware Secretary of State on August 28, 1997.
The Trust's affairs are conducted by the Property Trustee and the Delaware
Trustee, and by the Administrators who are employees or officers of or
affiliated with the Company. The Trust exists for the exclusive purposes of (i)
issuing and selling the Trust Securities, (ii) using the proceeds from the sale
of the Trust Securities to acquire the Junior Subordinated Debentures, and (iii)
engaging in only those other activities necessary, advisable or incidental
thereto (such as registering the transfer of the Capital Securities).
Accordingly, the Junior Subordinated Debentures will be the sole assets of the
Trust, and payments under the Junior Subordinated Debentures will be the sole
revenue of the Trust. All of the Common Securities are and will continue to be
owned by the Company.
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THE CAPITAL SECURITIES
Securities Offered 2,000,000 8.00% Capital Securities
(Liquidation Amount $25.00 per Capital Security),
which represent preferred undivided beneficial
interests in the assets of the Trust. The Junior
Subordinated Debentures held by the Trust will
mature on ________, 2027.
Offering Price $25.00 per Capital Security plus accumulated
Distributions, if any, from ______, 1997.
Distribution Dates January 31, April 30, July 31 and October 31 of
each year, commencing _______________, 1997.
Extension Periods So long as no Debenture Event of Default has
occurred and is continuing, Distributions on
Capital Securities may be deferred for the
duration of any Extension Period elected by the
Company with respect to the payment of interest on
the Junior Subordinated Debentures. No Extension
Period will exceed 20 consecutive quarters or
extend beyond the Stated Maturity Date. See
"Description of Junior Convertible Subordinated
Debentures-- Option to Extend Interest Payment
Date" and "Certain Federal Income Tax
Considerations-- Interest, Original Issue
Discount, Premium and Market Discount."
Ranking The Capital Securities will rank pari passu, and
payments thereon will be made pro rata, with the
Common Securities except as described under
"Description of Capital Securities-- Subordination
of Common Securities." The Junior Subordinated
Debentures will rank pari passu with all other
junior subordinated debentures issued by the
Company ("Other Debentures"), which will be issued
and sold (if at all) to other trusts established
by the Company (if any), in each case similar to
the Trust ("Other Trusts"), and will be unsecured
and subordinate and rank junior in right of
payment to all Senior Indebtedness of the Company
to the extent and in the manner set forth in the
Indenture. See "Description of Junior Convertible
Subordinated Debentures." There are currently no
other securities that would constitute Other
Debentures. The Guarantee will constitute an
unsecured obligation of the Company and will be
subordinate and rank junior in right of payment to
all Senior Indebtedness of the Company to the
extent and in the manner set forth in the
Guarantee Agreement. In addition, because the
Company is a holding company, the Company's
obligations under the Junior Subordinated
Debentures and the Guarantee effectively will be
subordinated to all existing and future
liabilities, including indebtedness, of the
Company's subsidiaries, including the Bank's
deposit liabilities. See "Description of the
Guarantee" and "Risk Factors-- Ranking of
Subordinate Obligations Under the Guarantee and
Junior Subordinated Debentures."
Conversion into Common
Stock Each Capital Security is convertible at the option
of the holder thereof, at any time prior to the
earlier of (i) 5:00 p.m. (New York City time) on
the Business Day immediately preceding the date of
repayment of such Capital Security, whether at
maturity or upon redemption, and
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(ii) 5:00 p.m. (New York City time) on the
Conversion Termination Date (if any) into a number
of shares of Common Stock that equals the quotient
obtained by dividing (i) $25 by (ii) 110% of the
average of the daily last reported sale prices of
the Common Stock for the 10 consecutive trading
days immediately preceding the date of the Public
Offering Prospectus or, in the event all of the
Capital Securities offered hereby are sold in the
Subscription Offering, for the 10 consecutive
trading days immediately preceding the
Subscription Offering Expiration Date, in each
case as reported on the NYSE Composite Tape,
subject to adjustment in certain circumstances
(such numerator being referred to herein as the
"Conversion Price"). In connection with any
conversion of a Capital Security, the Conversion
Agent (as defined herein) will exchange such
Capital Security for the appropriate principal
amount of Junior Subordinated Debentures held by
the Trust and immediately convert such Junior
Subordinated Debentures into shares of Common
Stock. No fractional shares of Common Stock will
be issued as a result of conversion, but in lieu
thereof such fractional interest will be paid by
the Company in cash. See "Description of Capital
Securities -- Conversion Rights." Holders of
Capital Securities at 5:00 p.m. (New York City
time) on a Distribution Record Date (as defined
herein) will be entitled to receive the
Distribution payable upon such Capital Securities
on the corresponding Distribution Date
notwithstanding the conversion of such Capital
Securities following such Distribution Record Date
but on or prior to such Distribution Date.
Termination of Conversion
Rights If for at least 20 trading days within any period
of 30 consecutive trading days ending on or after
__________, including the last trading day of such
period, the Closing Price of the Common Stock
exceeds 1__% of the then applicable Conversion
Price of the Capital Securities, the Company may,
at its option, terminate the right to convert the
Junior Subordinated Debentures into Common Stock,
in which case the right to convert the Capital
Securities into Common Stock will likewise
terminate. To exercise this conversion termination
option, the Company must cause the Trust to issue
a press release announcing the Conversion
Termination Date, prior to the opening of business
on the second trading day after a period in which
the condition in the preceding sentence has been
met, but in no event may such press release be
issued prior to ________. Notice of termination of
conversion rights will be given by first-class
mail to the holders of the Capital Securities not
more than four Business Days after the Trust
issues the press release. The Conversion
Termination Date shall be a Business Day not less
than 30 and not more than 60 days following the
date of the press release described above. See
"Description of Capital Securities-- Conversion
Rights."
Redemption The Trust Securities will be subject to mandatory
redemption in a Like Amount, (i) in whole but not
in part, on the Stated Maturity Date upon
repayment of the Junior Subordinated Debentures,
(ii) in whole but not in part, at any time,
contemporaneously with the optional prepayment of
all of the Junior Subordinated Debentures by the
Company upon the occurrence and continuation of a
Special Event and (iii) in whole or in
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part, on or after the Initial Optional Prepayment
Date, contemporaneously with the optional
prepayment by the Company of all or a part of the
Junior Subordinated Debentures, in each case at
the applicable Redemption Price. See "Description
of Capital Securities -- Redemption."
ERISA Considerations Prospective purchasers should consider the
restrictions on purchase set forth under "ERISA
Considerations."
Absence of Market for the
Capital Securities The Capital Securities will be a new issue of
securities for which there currently is no market.
Although the Underwriter has informed the Trust
and the Company in connection with the issuance of
the Capital Securities that it intends to make a
market in the Capital Securities, the Underwriter
is not obligated to do so, and any such market
making may be discontinued at any time without
notice. Accordingly, there can be no assurance as
to the development or liquidity of any market for
the Capital Securities. The Trust and the Company
will not apply for listing of the Capital
Securities on any securities exchange or automated
quotation system.
THE SUBSCRIPTION OFFERING
Subscription Rights Holders of Subscription Rights may subscribe for
Capital Securities by properly completing and
signing the Subscription Order Form mailed to the
Eligible Subscribers together with this Prospectus
and by delivering it to the Sales Agent, or by
mailing it in the postage-paid return envelope
accompanying this Prospectus, accompanied by full
payment for the subscribed Capital Securities
(including with respect to Capital Securities
sought to be purchased pursuant to the exercise of
Excess Subscription Rights (as defined herein)).
The Subscription Rights will entitle each Eligible
Subscriber to purchase at least the same
percentage of the Capital Securities offered in
the Subscription Offering as the percentage of the
outstanding shares of Common Stock owned of record
by the Eligible Subscriber as of the Subscription
Offering Record Date (as defined herein) (such
entitlement being referred to as an Eligible
Subscriber's "Pro Rata Subscription Right"). Based
on the number of shares of Common Stock
outstanding on June 30, 1997, an Eligible
Subscriber would be entitled to purchase pursuant
to his Pro Rata Subscription Right .0926 of a
Capital Security for each share of Common Stock
held as of such date. Each Eligible Subscriber
also is being given the opportunity to indicate on
the Subscription Order Form whether such Eligible
Subscriber wishes to purchase, in the event the
Subscription Offering is not fully subscribed
pursuant to the Pro Rata Subscription Rights,
Capital Securities in excess of those allotted to
him pursuant to his Pro Rata Subscription Rights
and the maximum amount of such excess Capital
Securities such Eligible Subscriber seeks to
purchase (the "Excess Subscription Rights"). In
the event the exercise of the Excess Subscription
Rights results in the Subscription Offering being
oversubscribed, then the number of Capital
Securities sought to be purchased by each Eligible
Subscriber exercising Excess Subscription
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Rights will be reduced and will equal the product
of (i) such number of excess Capital Securities
sought to be purchased by such Eligible Subscriber
and (ii) a fraction, the numerator of which is the
number of outstanding shares of Common Stock owned
of record by such Eligible Subscriber as of
Subscription Offering Record Date and the
denominator of which is the aggregate number of
outstanding shares of Common Stock owned of record
by all Eligible Subscribers who elect to exercise
Excess Subscription Rights as of the Subscription
Offering Record Date. The Sales Agent will have
the authority to determine the amount of Capital
Securities each Eligible Subscriber is entitled to
purchase pursuant to the foregoing procedures
using such methods (such as rounding) as it
determines to be appropriate.
Subscription Procedures Fully completed and executed Subscription Order
Forms, together with full payment for the
subscribed-for Capital Securities, must be
received by 5:00 p.m. (New York City time) on
_________________, 1997, unless extended in the
sole discretion of the Company (as such date may
be so extended, the "Subscription Offering
Expiration Date"). Payment for the subscribed
Capital Securities (including those relating to a
subscriber's Pro Rata Subscription Right and
Excess Subscription Rights) must be made in cash
(if delivered in person), by check or money order.
The failure of the Sales Agent to receive from any
Eligible Subscriber for any reason a properly
completed and executed Subscription Order Form,
accompanied by full payment, by the Subscription
Offering Expiration Date, will be deemed a waiver
and release by such person of all Subscription
Rights held. A Subscription Order Form, once
received by the Sales Agent, is irrevocable and
cannot be amended, modified or rescinded by the
Eligible Subscriber without the consent of the
Company and the Trust, which consent may be
withheld for any or no reason in the sole
discretion of the Company and the Trust. The
Company and the Trust may, but are not required
to, waive any irregularities in any Subscription
Order Form or require the submission of a
corrected Subscription Order Form or the
remittance of full payment for subscribed Capital
Securities by such date as the Company and the
Trust may specify.
Subscription Refunds Refunds to Eligible Subscribers in the
Subscription Offering will be remitted (a) in lieu
of the issuance of fractional Capital Securities,
(b) in the event of an oversubscription in the
Subscription Offering, and (c) in the event the
Subscription Offering is terminated. Under no
circumstances will interest be paid on funds
delivered as payment for the Capital Securities.
Any refunds due to Eligible Subscribers on funds
remitted will be mailed to each Eligible
Subscriber at the address designated on the
Subscription Order Form promptly after the
expiration or termination of the Subscription
Offering.
Termination The Subscription Offering is not conditioned upon
the sale of a minimum Liquidation Amount of the
Capital Securities and, further, is not
conditioned upon the completion of the Public
Offering. The Subscription Offering may be
terminated at any time and for any reason in the
sole discretion of the Company, prior to
completion of the
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Subscription Offering. In the event the
Subscription Offering is terminated, refunds of
the payments made for subscribed-for Capital
Securities will be remitted and mailed to each
Eligible Subscriber at the address designated on
the Subscription Order Form promptly after the
termination of the Subscription Offering.
Management Subscriptions Certain of the directors and
executive officers of the Company owning in the
aggregate approximately 24% of the Common Stock
have informed the Company that they presently
intend to exercise their Pro Rata Subscription
Rights and also may exercise Excess Subscription
Rights.
Additional Information The Information Agent for the
Subscription Offering is Beacon Hill Partners,
Inc. Eligible Subscribers should contact the
Information Agent with any questions or if they
need additional copies of this Prospectus or any
other document at 1-800-854-9486.
USE OF PROCEEDS
All of the proceeds to the Trust from the sale of the Trust Securities
will be invested by the Trust in the Junior Subordinated Debentures. The net
proceeds from the sale of the Junior Subordinated Debentures will be available
to the Company for general corporate purposes, including, without limitation,
the making of advances and capital contributions to the Bank and, from time to
time, the purchase, in the open market or in privately-negotiated transactions,
of outstanding shares of the Common Stock, as well as in connection with one or
more possible future acquisitions by the Company. Initially, the net proceeds
may be used to make short-term investments. Under current policy, the Office of
Thrift Supervision (the "OTS") does not impose any capital adequacy requirements
on the Company, but rather imposes such capital adequacy requirements on the
Bank. To the extent the Company contributes a portion of the net proceeds
received from the sale of the Capital Securities to the Bank, such proceeds
would qualify as Tier 1 (core) capital at the Bank level under the current
capital adequacy guidelines of the OTS.
See "Use of Proceeds."
RISK FACTORS
Prospective investors should carefully consider the matters set forth
under "Risk Factors."
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RISK FACTORS
Prospective purchasers of Capital Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND JUNIOR SUBORDINATED
DEBENTURES
The obligations of the Company under the Guarantee and under the Junior
Subordinated Debentures will be unsecured and subordinate and rank junior in
right of payment to all present and future Senior Indebtedness of the Company to
the extent and in the manner set forth in the Guarantee and the Indenture,
respectively. No payment may be made of the principal of, or premium, if any, or
interest on the Junior Subordinated Debentures, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Junior Subordinated
Debentures, or under the Guarantee, at any time when (i) there shall have
occurred and be continuing a default in any payment in respect of any Senior
Indebtedness, or there has been an acceleration of the maturity thereof because
of a default or (ii) in the event of the acceleration of the maturity of the
Junior Subordinated Debentures, until payment has been made on all Allocable
Amounts (as defined herein) of Senior Indebtedness. At June 30, 1997, the
Company did not have any outstanding Senior Indebtedness. None of the Guarantee,
the Indenture, the Common Guarantee or the Declaration places any limitation on
the amount of secured or unsecured debt, including Senior Indebtedness, that may
be incurred by the Company in the future. The Company expects from time to time
to incur additional indebtedness constituting Senior Indebtedness. See
"Description of Junior Subordinated Debentures -- Subordination" and
"Description of the Guarantee -- Status."
The ability of the Trust to pay amounts due on the Capital Securities is
wholly dependent upon the Company making payments on the Junior Convertible
Subordinated Debentures as and when required.
HOLDING COMPANY STRUCTURE
Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution)
is subject to the prior claims of creditors of that subsidiary (including
depositors in the case of the Bank), except to the extent that the Company may
itself be recognized as a creditor of that subsidiary. At June 30, 1997, the
subsidiaries of the Company had total liabilities (excluding liabilities owed to
the Company) of approximately $3.1 billion, including deposits, in the case of
the Bank. Accordingly, the Capital Securities will be effectively subordinated
to all existing and future liabilities of the Company's subsidiaries, and
holders of Capital Securities should look only to the assets of the Company for
payments on the Capital Securities. None of the Guarantee, the Indenture, the
Common Guarantee or the Declaration places any limitation on the amount of
secured or unsecured debt that may be incurred by the Company's subsidiaries in
the future. See "Description of Junior Convertible Subordinated Debentures --
General" and "Description of the Guarantee -- General."
In addition, as the Company is a non-operating holding company, almost all
of the operating assets of the Company are owned by the Company's subsidiaries.
The Company relies primarily on dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its outstanding debt
obligations, if any, and corporate expenses. The Bank is subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Company and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Company and such other affiliates from borrowing from the Bank unless the loans
are secured by various types of collateral. Further, such secured loans, other
transactions and investments by the Bank are generally limited in amount as to
the Company and as to each of such other affiliates to 10% of such Bank's
capital and surplus and as to the Company and all of such other affiliates to an
aggregate of 20% of such Bank's capital and surplus. In addition, payment of
dividends to the Company by the Bank is subject to ongoing review by banking
regulators and is subject to various statutory limitations and in certain
circumstances requires prior approval by banking regulatory authorities. In
addition, in 1988 the Bank
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issued Series A and Series B subordinated capital notes, and the agreements
governing such notes restrict the amounts which the Bank can pay to the Company
by way of cash dividends. Under current OTS regulations and restrictions imposed
by the Bank's subordinated indebtedness referred to above, on July 1, 1997, the
Bank could have declared dividends to the Company of approximately $11.5
million, of which approximately $8.0 million has been subsequently declared and
paid to the Company. Federal and state regulatory agencies also have the
authority to limit further the Bank's payment of dividends based on other
factors, such as the maintenance of adequate capital for the Bank, which could
reduce the amount of dividends otherwise payable.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company will have the right under the Indenture to defer
payments of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 20 consecutive quarters with respect to
each Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity Date. Upon any such deferral, quarterly Distributions on the
Capital Securities by the Trust will be deferred (and the amount of
Distributions to which holders of the Capital Securities are entitled will
accumulate additional Distributions thereon at the rate of 8.00% per annum,
compounded quarterly (to the extent permitted by applicable law)) from the
relevant payment date for such Distributions during any such Extension Period.
The Company may extend any existing Extension Period, provided that such
extension does not cause such Extension Period to exceed 20 consecutive quarters
or to extend beyond the Stated Maturity Date. Upon the expiration of any
Extension Period and the payment of all interest then accrued and unpaid on the
Junior Subordinated Debentures (together with interest thereon at the annual
rate of 8.00%, compounded quarterly, to the extent permitted by applicable law),
the Company may elect to begin a new Extension Period, subject to the above
requirements. There is no limitation on the number of times that the Company may
elect to begin an Extension Period. See "Description of Capital Securities --
Distributions" and "Description of Junior Convertible Subordinated Debentures --
Option to Extend Interest Payment Period."
The Company believes that, as a result of its inability to pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, its Common Stock during an Extension Period
and the additional restrictions imposed upon it to the extent described under
"Description of Junior Convertible Subordinated Debentures -- Option to Extend
Interest Payment Date," the likelihood of its exercising its right to defer
payments of interest is remote. However, should the Company exercise its rights
to defer payments of interest by extending the interest payment period or should
the Junior Subordinated Debentures be deemed to have been issued with original
issue discount ("OID"), each holder of Capital Securities will be required to
accrue income (as OID) for United States federal income tax purposes in respect
of the deferred interest allocable to its Capital Securities. As a result,
holders of Capital Securities will recognize income for United States federal
income tax purposes in advance of the receipt of cash and will not receive the
cash from the Trust related to such income if such holder disposes of its
Capital Securities prior to the record date for the date on which Distributions
of such amounts are made. The Company has no current intention of exercising its
right to defer payments of interest by extending the interest payment period on
the Junior Subordinated Debentures. However, should the Company determine to
exercise such right in the future, the market price of the Capital Securities is
likely to be affected. A holder that disposes of its Capital Securities during
an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Capital Securities. In
addition, as a result of the existence of the Company's rights to defer interest
payments, the market price of the Capital Securities (which represents a
preferred undivided beneficial interest in the Junior Subordinated Debentures)
may be more volatile than other securities on which OID accrues that do not have
such rights. See "Certain Federal Income Tax Considerations -- Interest,
Original Issue Discount, Premium and Market Discount" and "-- Sales or
Redemption of Capital Securities."
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REDEMPTION OR DISTRIBUTION
Upon the occurrence and continuation of a Special Event (including a Tax
Event, a Regulatory Capital Event or an Investment Company Event, in each case
as defined under "Description of Junior Convertible Subordinated Debentures --
Special Event Prepayment"), the Company will have the right to prepay the Junior
Subordinated Debentures, in whole, but not in part, at the Special Event
Prepayment Price within 90 days following the occurrence of such Special Event
and therefore cause a mandatory redemption of the Capital Securities at the
Special Event Redemption Price. On or after the Initial Optional Prepayment
Date, the Company may prepay the Junior Subordinated Debentures, in whole or in
part, for any reason and thereby cause an optional redemption of the Capital
Securities, in whole or in part, at the Optional Redemption Price. See
"Description of Capital Securities -- Redemption" and "-- Liquidation of the
Trust and Distribution of Junior Subordinated Debentures."
The Company will have the right at any time to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, cause the Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust. Such right is
subject to the Company having received an opinion of counsel to the effect that
such distribution will not be a taxable event to holders of Capital Securities.
Under current United States federal income tax law, a distribution of Junior
Subordinated Debentures upon the dissolution of the Trust would not be a taxable
event to holders of the Capital Securities. If, however, the Trust is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of dissolution of the Trust, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities. Moreover, upon the occurrence of a
Special Event, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "Certain
Federal Income Tax Considerations -- Receipt of Junior Subordinated Debentures
Upon Liquidation of the Trust."
The Company believes that under current law it is entitled to deduct the
interest accruing on the Junior Subordinated Debentures. Under the Taxpayer
Relief Act of 1997, enacted on August 5, 1997, issuers of certain convertible
debt instruments are not entitled to deduct interest thereon. For example,
interest is not deductible if the debt instrument is convertible into equity of
the issuer (or a related party) at the option of the holder and there is a
substantial certainty that the holder will exercise the conversion option.
Similarly, interest is not deductible if the debt instrument is part of an
arrangement which is reasonably expected to result in a conversion at the option
of the issuer. The Company believes that this legislation should not apply to
the Junior Subordinated Debentures. The Internal Revenue Service (the
"Service"), however, has not yet issued any guidance regarding its
interpretation of the new legislation. There can be no assurance that the
Service will not take the position that interest on the Junior Subordinated
Debentures is not deductible. Accordingly, there can be no assurance that an
audit or future interpretation by the Service of the new legislation will not
result in a Tax Event and an early redemption of the Capital Securities before,
or after, , 2001 at the Special Event Redemption Price.
In addition, in recent years, there have been several proposals to adopt
legislation which, if enacted and made applicable to the Junior Subordinated
Debentures, would preclude the Company from deducting interest thereon. The most
recent proposal was made by the Clinton Administration on March 19, 1997. Such
proposals have not been adopted by Congress, but there can be no assurance that
similar proposals will not be adopted in the future and made applicable to the
Junior Subordinated Debentures. Accordingly, there can be no assurance that any
such legislation will not result in a Tax Event which would permit the Company
to cause a redemption of the Capital Securities before, or after, , 2001 at the
Special Event Redemption Price.
Under current law, the Bank is a federal savings association, and the
Company is a savings and loan holding company that is not subject to regulation
as a bank holding company under the Bank Holding Company Act of 1956, as
amended. However, legislation currently pending in Congress, known as the
Financial Services Competition Act of 1997, provides for the termination of
federal savings association charters and their conversion into national bank
charters. This legislation also provides for the registration of bank holding
companies resulting from conversions of savings association to national banks.
In the event that this legislation is adopted, the
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Company could be required to register, and become subject to regulation, as a
bank holding company. Bank holding companies, unlike saving and loan holding
companies such as the Company, are subject to consolidated regulatory capital
adequacy requirements. Although currently, the Company is not subject to any
regulatory capital adequacy guidelines, as a bank holding company subject to
consolidated capital adequacy requirements, the amount of the proceeds received
from the Offerings would only be includible in calculating the Company's capital
adequacy requirements to an amount not exceeding 25% of the Company's Tier 1
capital. There can be no assurance that the adoption of this or any other
similar legislation in the future will not result in a Regulatory Capital Event
(as defined herein) which would permit the Company to cause a redemption of the
Capital Securities at any time before, or after, _________________, 2001 at the
Special Event Redemption Price.
See "Description of Capital Securities -- Redemption," "Description of
Junior Convertible Subordinated Debentures -- Special Event Prepayment" and
"Certain Federal Income Tax Considerations -- Sale or Redemption of Capital
Securities."
TERMINATION OF CONVERSION RIGHTS
On and after _________, the Company may, subject to certain conditions
including advance public notice, at its option, cause the conversion rights of
holders of Junior Subordinated Debentures to terminate, provided that the
Closing Price of the Common Stock exceeds 1__% of the then applicable Conversion
Price of the Capital Securities for a specified period, in which case the right
to convert the Capital Securities into Common Stock will likewise terminate. See
"Description of Capital Securities -- Conversion Rights -- Termination of
Conversion Rights."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for the Capital
Securities or, if a termination of the Trust were to occur, for the Junior
Subordinated Debentures distributed to the holders of Capital Securities.
Accordingly, the Capital Securities or the Junior Subordinated Debentures may
trade at a discount from the price that the investor paid to purchase the
Capital Securities offered hereby. Because holders of Capital Securities may
receive Junior Subordinated Debentures in liquidation of the Trust and because
Distributions are otherwise limited to payments on the Junior Subordinated
Debentures, prospective purchasers of Capital Securities are also making an
investment decision with regard to the Junior Subordinated Debentures and should
carefully review all the information regarding the Junior Subordinated
Debentures contained herein. See "Description of Junior Convertible Subordinated
Debentures."
RIGHTS UNDER THE GUARANTEE
The Bank of New York will act as Guarantee Trustee and will hold the
Guarantee for the benefit of the holders of the Capital Securities. The Bank of
New York also will act as Property Trustee and as Debenture Trustee under the
Indenture. The Bank of New York (Delaware) will act as Delaware Trustee under
the Declaration. The Guarantee will guarantee to the holders of the Capital
Securities the following payments, to the extent not paid by the Trust: (i) any
accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor; (ii) the applicable Redemption Price with respect to any Capital
Securities called for redemption, to the extent that the Trust has funds on hand
legally available therefor; and (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital Securities),
the lesser of (a) the aggregate of the Liquidation Amount and all accumulated
and unpaid Distributions to the date of payment, to the extent that the Trust
has funds on hand legally available therefor on such date and (b) the amount of
assets of the Trust remaining available for distribution to holders of the
Capital Securities on such date. The holders of a majority in Liquidation Amount
of the Capital Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee. Any holder of the Capital Securities
12
<PAGE>
may institute a legal proceeding directly against the Company to enforce its
rights under the Guarantee without first instituting a legal proceeding against
the Trust, the Guarantee Trustee or any other person or entity. If the Company
defaults on its obligation to pay amounts payable under the Junior Subordinated
Debentures, the Trust will not have sufficient funds for the payment of
Distributions or amounts payable on redemption of the Capital Securities or
otherwise, and, in such event, holders of the Capital Securities will not be
able to rely upon the Guarantee for payment of such amounts. Instead, in the
event a Debenture Event of Default shall have occurred and be continuing and
such event is attributable to the failure of the Company to pay principal of or
premium, if any, or interest on the Junior Subordinated Debentures on the
payment date on which such payment is due and payable, then a holder of Capital
Securities may institute a legal proceeding directly against the Company for
enforcement of payment to such holder of the principal of or premium, if any, or
interest on such Junior Subordinated Debentures having a principal amount equal
to the Liquidation Amount of the Capital Securities of such holder (a "Direct
Action"). Notwithstanding any payments made to a holder of Capital Securities by
the Company in connection with a Direct Action, the Company shall remain
obligated to pay the principal of and premium, if any, and interest on the
Junior Subordinated Debentures, and the Company shall be subrogated to the
rights of the holder of such Capital Securities with respect to payments on the
Capital Securities to the extent of any payments made by the Company to such
holder in any Direct Action. Except as described herein, holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Junior Subordinated Debentures or to assert directly any
other rights in respect of the Junior Subordinated Debentures. See "Description
of Junior Convertible Subordinated Debentures -- Enforcement of Certain Rights
by Holders of Capital Securities" and "-- Debenture Events of Default" and
"Description of the Guarantee." The Declaration will provide that each holder of
Capital Securities by acceptance thereof agrees to the provisions of the
Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities generally will have voting rights relating
only to the modification of the terms of the Capital Securities and the exercise
of the Trust's rights as holder of the Junior Subordinated Debentures. Holders
of Capital Securities will not be entitled to vote to appoint, remove or
replace, or to increase or decrease the number of, the Issuer Trustees or
Administrators, which voting rights are vested exclusively in the holder of the
Common Securities, except as described under "Description of Capital Securities
- -- Removal of Issuer Trustees and Administrators." See "Description of Capital
Securities -- Voting Rights; Amendment of the Declaration."
TRADING PRICE
The Capital Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder using the accrual method of accounting (and a
cash method holder, during and after an Extension Period or if the Junior
Subordinated Debentures are deemed to have been issued with OID) who disposes of
its Capital Securities between Distribution Record Dates (as defined herein)
will be required to include accrued but unpaid interest (or OID) on the Junior
Subordinated Debentures through the date of disposition in income as ordinary
income and to add such amount to its adjusted tax basis in its share of the
underlying Junior Subordinated Debentures deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis, a holder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes. See "Certain Federal Income Tax Considerations -- Interest, Original
Issue Discount, Premium and Market Discount" and "-- Sale or Redemption of
Capital Securities."
13
<PAGE>
ABSENCE OF PUBLIC MARKET AND TRANSFER RESTRICTIONS
There is no existing market for the Capital Securities and there can be no
assurance as to the liquidity of any markets that may develop for the Capital
Securities, the ability of the holders to sell their Capital Securities or at
what price holders of the Capital Securities will be able to sell their Capital
Securities, as the case may be. Future trading prices of the Capital Securities
will depend on many factors including, among other things, prevailing interest
rates, the Company's operating results, and the market for similar securities.
The Underwriter has informed the Trust and the Company that the Underwriter
intends to make a market in the Capital Securities. However, the Underwriter is
not obligated to do so and any such market making activity may be terminated at
any time without notice to the holders of the Capital Securities. In addition,
notwithstanding the registration of the Capital Securities, holders who are
"affiliates" of the Company or the Trust as defined under Rule 405 of the
Securities Act may publicly offer for sale or resell the Capital Securities only
in compliance with the provisions of Rule 144 under the Securities Act.
14
<PAGE>
NEW YORK BANCORP INC.
The Company is a Delaware chartered savings and loan holding company,
headquartered in Douglaston, New York. Through its wholly-owned subsidiary, the
Bank, a federally-chartered stock savings bank, the Company operates 30 banking
offices (of which five are supermarket branches and 25 are stand-alone branches)
and seven loan production offices. At June 30, 1997, the Company had total
consolidated assets of approximately $3.3 billion, deposits of approximately
$1.7 billion, and stockholders' equity of approximately $166.9 million.
The Bank's principal business consists of attracting deposits from the
general public and investing those deposits, together with funds generated from
operations and borrowings, in the origination and purchase of residential,
multifamily, and commercial mortgage loans, cooperative apartment loans and
consumer loans. In addition, the Bank invests in mortgage-backed and related
securities, securities issued by the U.S. government and agencies thereof, and
other investments in which the Bank is permitted to invest under federal laws
and regulations.
The Bank has been, and intends to continue to be, a community bank
offering a variety of deposit and lending services designed to meet the needs of
the communities it serves. The Bank's deposit customer base is drawn primarily
from Kings, Queens, Richmond, Nassau, and Suffolk Counties, while its loan
origination activities are conducted primarily in the five boroughs of New York
City, Nassau, Suffolk and Westchester Counties, as well as certain areas of
Connecticut and New Jersey.
The directors and executive officers of the Company own in the aggregate
approximately 26% of the outstanding Common Stock. Management's strategy is
focused on enhancing stockholder value by expanding the customer base of the
Bank and increasing the market penetration of the Bank within its existing
markets. Since 1991, expansion of the franchise has been achieved through the
acquisition of three institutions or the assets thereof, which combined, added
approximately $1.5 billion in assets and 18 branch offices. As acquisition
premiums have reached historic highs in recent years, the Company has, in lieu
of building the franchise through acquisitions, instead focused on expanding the
branch network through the opening of supermarket branches. Currently, the Bank
maintains five supermarket branches and has plans to establish six additional
supermarket branches during fiscal 1998. By expanding its branch network through
the establishment of supermarket branches, the Company will be able to penetrate
further its market area on an accelerated basis and with much lower levels of
capital investment and ongoing operating expense relative to opening and
operating stand-alone branch offices.
In addition to expanding its branch office network, the Bank has also
devoted considerable resources to developing a sales culture within its branch
system, through additional training and an incentive compensation system which
provides bonuses for successful sales efforts. The Bank has also developed a
variety of deposit and loan products, including new checking accounts, life
insurance and annuity products.
As a result of the focus of management on enhancing stockholder value, the
Company has enjoyed superior performance measures. For the year ended September
30, 1996, the Company's return on average assets and return on average
stockholders' equity (after recording a SAIF recapitalization charge of
approximately $9.4 million) were 1.16% and 20.26%, respectively. For the nine
months ended June 30, 1997, the Company's return on average assets and
stockholder's equity were 1.61% and 31.08%, respectively. Contributing to the
superior performance of the institution is the Company's aggressive control of
expenses, as evidenced by its efficiency ratios of 42.96% and 38.15% for the
year ended September 30, 1996 and the nine months ended June 30, 1997,
respectively.
The Bank was organized in 1935 as a federally-chartered savings and loan
association, changed its charter in 1983 to a federal savings bank, and
converted, in February 1988, from mutual to stock form in connection with its
acquisition by the Company. The Company's principal executive offices are
located at 241-02 Northern Boulevard, Douglaston, New York 11362, and its
telephone number at such address is (718) 631-8100.
15
<PAGE>
USE OF PROCEEDS
The proceeds to the Trust from the offering of the Capital Securities will
be $50,000,000. All of the proceeds from the sale of Capital Securities
(together with the proceeds of the Common Securities) will be invested by the
Trust in the Junior Subordinated Debentures. The estimated net proceeds of
approximately $__________ will be available to the Company for general corporate
purposes, including, without limitation, the making of advances and capital
contributions to the Bank and, from time to time, the purchase, in the open
market or in privately-negotiated transactions, of outstanding shares of the
Common Stock, as well as in connection with one or more possible future
acquisitions by the Company. Initially, the net proceeds may be used to make
short-term investments. Under current policy, the OTS does not impose any
capital adequacy requirements on the Company, but rather imposes such capital
adequacy requirements on the Bank. To the extent the Company contributes a
portion of the net proceeds received from the sale of the Capital Securities to
the Bank, such proceeds would qualify as Tier 1 (core) capital at the Bank level
under the current capital adequacy guidelines of the OTS.
16
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth for the respective periods indicated the
ratios of the Company's consolidated earnings to fixed charges. For purposes of
computing the ratio, earnings represent pretax income before extraordinary item
and cumulative effect of change in accounting principles plus fixed charges.
Fixed charges, excluding interest on deposits, include interest expense (other
than on deposits) and the proportion deemed representative of the interest
factor of rent expense, net of income from subleases. Fixed charges, including
interest on deposits, include all interest expense and the proportion deemed
representative of the interest factor of rent expense, net of income from
subleases.
NINE MONTHS ENDED YEAR ENDED
JUNE 30, SEPTEMBER 30,
1997 1996 1996 1995(1) 1994 1993 1992
---- ---- ---- ------- ---- ---- ----
Ratio of Earnings
to Fixed Charges:
Excluding interest
on deposits 2.36x 2.41x 2.21x 1.78x 3.09x 4.25x 2.33x
Including interest
on deposits 1.72x 1.60x 1.53x 1.31x 1.61x 1.64x 1.39x
- ---------------
(1) The decline in the ratio of earnings to fixed charges for the year ended
September 30, 1995, is primarily attributable to certain non-recurring
merger-related and restructuring expenses of approximately $19.0 million
incurred by the Company in connection with the acquisition of Hamilton
Bancorp, Inc.
("Hamilton").
17
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization
of the Company and its consolidated subsidiaries at June 30, 1997, and as
adjusted to give effect to the sale of the Capital Securities offered hereby and
the application of the estimated net proceeds therefrom as described under "Use
of Proceeds." The table should be read in conjunction with the historical
consolidated financial statements of the Company and related notes included in
Annual Report on Form 10-K for the year ended September 30, 1996 and the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997. See
"Available Information" and "Incorporation of Certain Documents by Reference."
AS OF JUNE 30, 1997
-------------------
ACTUAL ADJUSTED(1)
------ -----------
(IN THOUSANDS)
Subordinated Bank debt due in fiscal 1999 $7,600 $7,600
Variable rate reverse repurchase
agreement due in fiscal 1998 100,000 100,000
Fixed rate reverse repurchase
agreement due in fiscal 1999 73,300 73,300
Fixed rate reverse repurchase
agreements due in fiscal 2000 137,000 137,000
Fixed rate reverse repurchase
agreement due in fiscal 2001 79,000 79,000
Fixed rate reverse repurchase
agreement due in fiscal 2002 40,000 40,000
------- -------
Total long-term debt 436,900 436,900
------- -------
Company obligated, mandatorily redeemable,
convertible preferred securities of
subsidiary trust holding solely
subordinated debentures of the Company -- 50,000
------ -------
Shareholders' equity:
Common stock, $.01 par value, 30,000,000
shares authorized; 29,493,425 shares issued;
21,591,247 shares outstanding 295 295
Additional paid-in capital 66,502 66,502
Retained earnings, substantially restricted 171,847 171,847
Treasury stock, at cost, 7,902,178 shares (72,480) (72,480)
Unrealized appreciation on securities
available for sale, net of tax benefit 708 708
------ ------
Total shareholders' equity 166,872 166,872
------- -------
Total capitalization $603,772 $653,772
======= =======
- ---------------
(1) Reflects the issuance of the Capital Securities. The Trust is a subsidiary
of the Company and will hold the Junior Subordinated Debentures as its
sole asset.
18
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
The selected consolidated financial data below under the caption
"Operating Data" and "Financial Condition Data" for, and as of the end of, each
of the years in the five-year period ended September 30, 1996 are derived from
the consolidated financial statements of the Company, which consolidated
financial statements have been audited by KPMG Peat Marwick LLP, independent
certified public accountants. The consolidated financial statements as of
September 30, 1996 and 1995, and for each of the years in the three-year period
ended September 30, 1996, and the report thereon, are incorporated herein by
reference. See "Available Information" and "Incorporation of Certain Documents
by Reference." The selected consolidated financial data below under the caption
"Operating Data" and "Financial Condition Data" for the nine-month periods ended
June 30, 1997 and 1996, and as of June 30, 1997 and 1996, are derived from the
unaudited consolidated financial statements of the Company incorporated herein
by reference. Such interim unaudited data reflect, in the opinion of management
of the Company, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of such data. Results for the
nine months ended June 30, 1997 are not necessarily indicative of results which
may be expected for any other interim period or for the year as a whole. The
information presented below under the caption "Selected Financial Ratios and
Other Data" and "Customer Service Facilities" is unaudited.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30, YEAR ENDED SEPTEMBER 30,
--------------------- --------------------------------------------------------
1997 1996 1996 1995 1994(1) 1993(1) 1992(1)
---- ---- ---- ---- ------- ------- -------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Interest income.......................... $176,402 $153,142 $207,491 $196,972 $175,530 $160,752 $152,417
Interest expense......................... 87,357 79,218 106,746 101,730 79,948 71,385 84,415
-------- -------- -------- -------- --------- -------- --------
Net interest income.................... 89,045 73,924 100,745 95,242 95,582 89,367 68,002
Provision for possible loan losses....... (1,800) (900) (1,200) (1,700) (2,650) (4,700) (8,404)
-------- -------- -------- -------- --------- -------- --------
Net interest income after provision for
possible loan losses.................... 87,245 73,024 99,545 93,542 92,932 84,667 59,598
-------- -------- -------- -------- --------- -------- --------
Non-interest income:
Loan fees and service charges.......... 2,254 2,094 2,770 2,566 3,292 3,341 3,196
Banking service fees................... 4,726 3,862 5,323 3,944 3,108 3,753 1,608
Fees from sale of investment products.. 1,422 1,069 1,376 617 615 536 371
Net loss on financial futures
transactions.......................... -- -- -- -- -- (495) --
Net gain (loss) on the sale of mortgage
loans and securities available for sale 747 2,778 4,750 (1,088) 214 3,857 13,185
Other.................................. 4,689 368 448 573 771 192 625
-------- -------- -------- --------- --------- -------- --------
Total non-interest income............. 13,838 10,171 14,667 6,612 8,000 11,184 18,985
-------- -------- -------- --------- --------- -------- --------
General and administrative expenses...... 37,240 35,255 47,535 48,968 50,845 48,455 42,374
-------- -------- -------- --------- --------- -------- --------
Merger and restructuring expense......... -- -- -- 19,024 -- -- --
-------- -------- -------- --------- --------- -------- --------
Real estate operations, net.............. 899 340 463 883 880 1,296 3,413
-------- -------- -------- --------- --------- -------- ---------
SAIF recapitalization expense............ -- -- 9,432 -- -- -- --
-------- -------- -------- --------- --------- -------- ---------
Income before income tax expense,
extraordinary item and cumulative effect
of change in accounting principle...... 62,944 47,600 56,782 31,279 49,207 46,100 32,796
Income tax expense....................... (25,603) (20,966) (24,776) (19,717) (21,740) (20,912) (15,346)
Extraordinary item, early
extinguishment of debt................. -- -- -- -- -- -- (570)
Cumulative effect of change in accounting for
income taxes........................... -- -- -- -- 5,685 -- --
-------- -------- -------- --------- --------- -------- --------
Net income............................... $37,341 $26,634 $32,006 $11,562 $33,152 $25,188 $16,880
======== ======== ======== ========= ========= ======== ========
Per Share Data:
Income before extraordinary item
and cumulative effect of change
in accounting principle(3)............. $1.63 $1.10 $1.34 $.43 $1.01 $N/M(4) $N/M(4)
Net income(3)............................ 1.63 1.10 1.34 .43 1.22 N/M(4) N/M(4)
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
------------------------ -------------------------------------------------------------------
1997 1996 1996 1995 1994(1) 1993(1) 1992(1)
---- ---- ---- ---- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL CONDITION DATA:
Total Assets..........................$3,283,653 $2,918,120 $2,940,907 $2,731,592 $2,583,982 $2,250,605 $2,153,861
First mortgage loans.................. 1,769,701 1,580,451 1,603,769 1,389,776 1,158,604 1,103,575 992,864
Other loans........................... 254,425 275,733 268,779 296,439 299,455 311,670 326,354
Allowance for possible loan losses.... (19,613) (19,735) (19,386) (21,272) (25,705) (26,828) (19,455)
Loans receivable, net............... 2,004,513 1,836,449 1,853,162 1,664,943 1,432,354 1,388,417 1,299,763
Mortgage-backed securities held
to maturity......................... 602,828 562,785 550,817 664,726 785,593 439,605 448,296
Mortgage-backed securities
available for sale.................. 397,118 295,042 280,429 206,794 171,983 234,236 76,707
Debt securities
held to maturity.................... 606 1,155 643 21,179 52,984 4,662 26,620
Debt and equity securities
available for sale................. 135,553 93,910 136,133 46,273 180 -- 67
Federal Home Loan Bank stock.......... 52,641 30,944 27,938 20,288 17,409 21,734 20,876
Money market investments.............. -- 6,500 10,700 13,915 21,844 77,261 192,758
Trading account securities............ -- -- -- 2,003 12,939 12,487 12,242
Deposits.............................. 1,690,993 1,746,975 1,715,959 1,748,874 1,791,514 1,758,102 1,782,764
Borrowed funds........................ 1,347,230 958,912 1,008,786 767,138 578,897 293,693 222,850
Shareholders' equity.................. 166,872 158,374 151,903 156,386 171,291 153,769 99,933(5)
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE
NINE MONTHS ENDED
JUNE 30, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
------------------- --------------------------------------------------------------
1997 1996 1996 1995 1994(1) 1993(1) 1992(1)
---- ---- ---- ---- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL RATIOS AND OTHER DATA:
Return on average assets................. 1.61% 1.31% 1.16% .44%(2) 1.35% 1.16% .89%
Return on average shareholders' equity... 31.08 22.39 20.26 6.81(2) 20.13 18.74 17.81
Shareholders' equity to assets........... 5.08 5.43 5.17 5.73 6.63 6.83 4.64
Net interest rate spread................. 3.68 3.45 3.47 3.43 3.73 3.99 3.47
Net interest margin...................... 3.91 3.69 3.71 3.68 3.95 4.23 3.68
Efficiency ratio......................... 38.15 43.36 42.96 47.57 49.19 49.86 57.42
Nonaccrual loans and real estate owned, net,
as a percentage of total assets........ .99 1.02 .98 1.18 1.64 2.02 2.08
Allowance for possible loan losses as a
percentage of nonaccrual loans......... 69.08 72.90 75.87 70.04 70.23 69.02 54.87
Average interest-earning assets to average
interest-bearing liabilities........... 105.88% 105.95% 105.86% 106.47% 106.82% 107.04% 104.67%
Book value per share(3).................. $7.73 $6.89 $6.84 $6.44 $6.48 $5.87 $N/M(4)
Dividends per share(3)(4)................ .375 .30 .40 .40 .39 .32 .23
Dividend payout ratio(3)(4).............. 23.01% 27.27% 29.85% 76.92% 24.84% 29.36% 25.71%
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1997 1996 1996 1995 1994(1) 1993(1) 1992(1)
---- ---- ---- ---- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
CUSTOMER SERVICE FACILITIES:
Full service............... 30 29 29 27 26 26 29
Loan production offices..... 7 7 7 6 6 6 7
Executive office............ 1 1 1 1 1 1 1
CAPITAL RATIOS(6)(8):
Core Capital................ 4.75% 4.89% 4.71% 5.33% 4.79% 4.82% 4.29%
Tangible Capital........... 4.75 4.89 4.71 5.33 4.79 4.82 4.29
Risk-Based Capital.......... 11.18 11.00 11.24 12.24 10.56 10.23 9.92
</TABLE>
(1) On January 27, 1995, Hamilton was merged with and into the Company. The
merger was accounted for as a pooling of interests and, accordingly, all
prior periods include the consolidated results of Hamilton.
(2) Reflect certain non-recurring merger-related and restructuring expenses of
approximately $19.0 million incurred by the Company during the fiscal year
ended September 30, 1995, in connection with the acquisition of Hamilton.
(3) Per share amounts have been calculated to fully reflect the 4-for-3 stock
split effective July 24, 1997, the 3-for-2 stock splits effective January
23, 1997, July 29, 1993 and October 22, 1992 and the ten percent stock
dividend effective February 14, 1994.
(4) Dividends per share and the dividend payout ratio have not been restated for
the merger with Hamilton Bancorp, Inc.
(5) N/M - Hamilton converted to stock ownership on April 1, 1993. Accordingly,
restated per share data is not meaningful.
(6) Includes only the retained earnings of Hamilton Federal Savings, F.A., which
converted from mutual to stock ownership on April 1, 1993.
(7) Capital ratios prior to the merger with Hamilton on January 27, 1995, are
those of Home Federal Savings Bank.
(8) Under current capital adequacy guidelines of the OTS, to remain "adequately
capitalized," the Bank is required to maintain a Total Risk-Based Capital
ratio of 8.0% or greater, a Tier 1 Risk-Based Capital ratio of 4.0% or
greater, and a Tier 1(core) Capital ratio of 4.0% or greater.
21
<PAGE>
THE TRUST
The Trust is a statutory business trust created under Delaware law pursuant
to (i) a declaration of trust, dated as of August 28, 1997 executed by the
Company, as Sponsor, the Initial Trustee, the Delaware Trustee and the Property
Trustee named therein (the "Initial Declaration"), and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware on
August 28, 1997. The Initial Declaration will be replaced by the Declaration.
The Trust exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, which represent undivided beneficial interests in the assets of the
Trust, (ii) investing the gross proceeds from the sale of the Trust Securities
in the Junior Subordinated Debentures and (iii) engaging in only those other
activities necessary, advisable or incidental thereto. Accordingly, the Junior
Subordinated Debentures will be the sole assets of the Trust and payments under
the Junior Subordinated Debentures will be the sole revenues of the Trust. All
of the Common Securities will be owned directly by the Company. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Capital Securities, except that upon the occurrence and during the
continuance of an Event of Default (as defined herein), the rights of the
Company as holder of the Common Securities to payments in respect of
distributions and payments upon liquidation, redemption or otherwise will be
subordinated and rank junior to the rights of the holders of the Capital
Securities. See "Description of Capital Securities -- Subordination of Common
Securities." The Company will acquire Common Securities in a Liquidation Amount
equal to approximately, but not less than, 3% of the total capital of the Trust.
The Trust has a term of 31 years, but may dissolve earlier as provided in the
Declaration. The Trust's business and affairs will be conducted by the Issuer
Trustees and the Administrators, appointed by the Company as the direct holder
of the Common Securities. The Issuer Trustees will be The Bank of New York as
the Property Trustee and The Bank of New York (Delaware) as the Delaware
Trustee. The Bank of New York, as Property Trustee, will act as sole indenture
trustee under the Declaration. The Bank of New York also will act as trustee
under the Guarantee and the Indenture. See "Description of the Guarantee" and
"Description of Junior Convertible Subordinated Debentures." The holder of the
Common Securities or, if an Event of Default under the Declaration has occurred
and is continuing, the holders of a majority in Liquidation Amount of the
Capital Securities, will be entitled to appoint, remove or replace the Property
Trustee and/or the Delaware Trustee. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrators; such voting rights will be vested exclusively in the holder of
the Common Securities. The duties and obligations of each Issuer Trustee and the
Administrators are governed by the Declaration. The Company will pay directly
all fees, expenses, debts and obligations (other than the Trust Securities)
related to the Trust and the offering of the Capital Securities, including all
ongoing costs, expenses and liabilities of the Trust. The principal executive
office of the Trust is New York Bancorp Capital Trust, c/o New York Bancorp
Inc., 241-02 Northern Boulevard, Douglaston, New York 11362, Attention: Chief
Executive Officer. Under the Declaration, all parties to the Declaration will
agree, and the holders of the Capital Securities upon purchase of their Capital
Securities will be deemed to have agreed, for United States income tax purposes,
to treat the Trust as a grantor trust, the Junior Subordinated Debentures as
indebtedness and the Capital Securities as evidence of indirect beneficial
ownership in the Junior Subordinated Debentures.
DESCRIPTION OF CAPITAL SECURITIES
The Capital Securities will represent preferred undivided beneficial
interests in the assets of the Trust and the holders thereof will be entitled to
a preference over the Common Securities in certain circumstances with respect to
Distributions and amounts payable on redemption of the Trust Securities or
liquidation of the Trust. See "-Subordination of Common Securities" below. The
Declaration will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The following description does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the Declaration and the Trust Indenture Act. Certain capitalized
terms used herein are defined in the Declaration.
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GENERAL
The Capital Securities will be limited to $50,000,000 aggregate Liquidation
Amount at any one time outstanding. The Capital Securities will rank pari passu,
and payments will be made thereon pro rata, with the Common Securities except as
described under "-- Subordination of Common Securities" below. Legal title to
the Junior Subordinated Debentures will be held by the Property Trustee in trust
for the benefit of the holders of the Capital Securities and the Common
Securities. The Guarantee will not guarantee payment of Distributions or amounts
payable on redemption of the Capital Securities or liquidation of the Trust when
the Trust does not have funds on hand legally available for such payments. See
"Description of the Guarantee."
DISTRIBUTIONS
Distributions on the Capital Securities will be cumulative, will accumulate
from the Issue Date and will be payable quarterly in arrears on January 31,
April 30, July 31 and October 31 of each year, commencing _____________, 1997,
at the annual rate of 8.00% of the Liquidation Amount to the holders of the
Capital Securities on the relevant record dates. The record dates will be the
fifteenth day of the month preceding the month in which the relevant
Distribution Date (as defined herein) falls (each, a "Distribution Record
Date"). The amount of Distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and, for any period of less
than a full calendar month, the number of days elapsed in such month. In the
event that any date on which Distributions are payable on the Capital Securities
is not a Business Day (as defined herein), payment of the Distributions payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect to any such delay), except that
if such next succeeding Business Day falls in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, with the
same force and effect as if made on the date such payment was originally payable
(each date on which Distributions are payable in accordance with the foregoing,
a "Distribution Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in New York, New
York or Douglaston, New York are authorized or required by law or executive
order to close.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company will have the right under the Indenture to elect to
defer the payment of interest on the Junior Subordinated Debentures at any time
and from time to time for a period not exceeding 20 consecutive quarters with
respect to each Extension Period, provided that no Extension Period will end on
a day other than an interest payment date for the Junior Subordinated Debentures
or extend beyond the Stated Maturity Date. Upon any such election, quarterly
Distributions on the Capital Securities will be deferred by the Trust during
such Extension Period. Distributions to which holders of the Capital Securities
are entitled during any such Extension Period will accumulate additional
Distributions thereon at the rate per annum of 8.00% thereof, compounded
quarterly from the relevant Distribution Date, to the extent permitted by
applicable law. The term "Distributions," as used herein, shall include any such
additional Distributions.
During any such Extension Period, the Company may extend such Extension
Period, provided that such extension does not cause such Extension Period to
exceed 20 consecutive quarters or to extend beyond the Stated Maturity Date.
Upon the termination of any such Extension Period and the payment of all amounts
then due, and subject to the foregoing limitations, the Company may elect to
begin a new Extension Period. The Company must give the Property Trustee, the
Administrators and the Debenture Trustee notice of its election of any Extension
Period or any extension thereof at least five Business Days prior to the earlier
of (i) the date the Distributions on the Capital Securities would have been
payable except for the election to begin or extend such Extension Period and
(ii) the date the Administrators are required to give notice to any securities
exchange or to holders of the Capital Securities of the Distribution Record Date
or the date such Distributions are payable, but in any event not less than five
Business Days prior to such record date. There is no limitation on the number of
times that the Company may elect to begin an Extension Period. See "Description
of Junior Convertible Subordinated
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Debentures -- Option to Extend Interest Payment Date" and "Certain Federal
Income Tax Considerations -- Interest, Original Issue Discount, Premium and
Market Discount."
During any such Extension Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or premium, if any, or interest on or repay,
repurchase or redeem any debt securities of the Company (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Junior Subordinated Debentures or (iii) make any guarantee payments with respect
to any guarantee by the Company of any securities of any subsidiary of the
Company (including guarantees issued with respect to capital securities to Other
Trusts ("Other Guarantees")) if such guarantee ranks pari passu with or junior
in right of payment to the Junior Subordinated Debentures, other than (a)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, Common Stock or preferred stock of the
Company, (b) any declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) as a direct result of, and only to the
extent required in order to avoid the issuance of fractional shares of capital
stock following, a reclassification of the Company's capital stock or the
exchange or conversion of one class, or series of the Company's capital stock
for another class or series of the Company's capital stock, (e) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (f) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers or employees or any of the Company's dividend
reinvestment plans.
The Company believes that, as a result of its inability to pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, its Common Stock during an Extension Period and the additional
restrictions imposed upon it to the extent described under "Description of
Junior Convertible Subordinated Debentures -- Option to Extend Interest Payment
Date," the likelihood of its exercising its right to defer payments of interest
is remote and it has no such current intention. However, the Company reserves
the right in the future to exercise its option to defer payments of interest on
the Junior Subordinated Debentures. See "Risk Factors -- Option to Extend
Interest Payment Period; Tax Considerations."
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Junior Subordinated
Debentures in which the Trust will invest the proceeds from the issuance and
sale of the Trust Securities. See "Description of Junior Convertible
Subordinated Debentures -- General." If the Company does not make interest
payments on the Junior Subordinated Debentures, the Property Trustee will not
have funds available to pay Distributions on the Capital Securities. The payment
of Distributions (if and only to the extent the Trust has funds on hand legally
available for the payment of such Distributions) will be guaranteed by the
Company on a limited basis as set forth herein under "Description of the
Guarantee."
CONVERSION RIGHTS
General. Capital Securities will be convertible at any time prior to the
earlier of (i) 5:00 p.m. (New York City time) on the Business Day immediately
preceding the date of repayment of such Capital Securities, whether at maturity
or upon redemption, and (ii) 5:00 p.m. (New York City time) on the Conversion
Termination Date (if any), at the option of the holders thereof and in the
manner described below, into a number of shares of Common Stock that equals the
quotient obtained by dividing (i) $25 divided by (ii) the Conversion Price
referred to on the cover page of this Prospectus, subject to adjustment as
described below under "-- Conversion Price Adjustments." The Trust will covenant
in the Declaration not to convert Junior Subordinated Debentures held by it
except pursuant to a notice of conversion delivered to the Property Trustee, as
initial conversion agent (the "Conversion Agent"), by a holder of Capital
Securities.
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A holder of Capital Securities wishing to exercise its conversion right will
be required to deliver an irrevocable conversion notice, together with the
certificate evidencing such Capital Security, to the Conversion Agent which will
exchange such Capital Security for an equivalent amount of the Junior
Subordinated Debentures (based on an exchange ratio of $25.00 principal amount
of Junior Subordinated Debentures for each $25.00 Liquidation Amount of Capital
Securities) on behalf of such holder and immediately convert such Junior
Subordinated Debentures into Common Stock. Holders may obtain copies of the
required form of the conversion notice from the Conversion Agent.
Holders of Capital Securities at 5:00 p.m. (New York City time) on a
Distribution Record Date will be entitled to receive the Distribution payable on
such Capital Securities on the corresponding Distribution Date notwithstanding
the conversion of such Capital Securities following such Distribution Record
Date but on or prior to such Distribution Date. Except as provided in the
immediately preceding sentence, neither the Trust nor the Company will make, or
be required to make, any payment, allowance or adjustment for accumulated and
unpaid Distributions, whether or not in arrears, on converted Capital
Securities; provided, however, that if notice of redemption of Capital
Securities is mailed or otherwise given to holders of Capital Securities or the
Trust issues a press release announcing a Conversion Termination Date, then, if
any holder of Capital Securities converts any Capital Securities into Common
Stock on any date on or after the date on which such notice of redemption is
mailed or otherwise given or the date of such press release, as the case may be,
and if such date of conversion falls on any day from and including the first day
of an Extension Period and on or prior to the Distribution Date upon which such
Extension Period ends, such converting holder shall be entitled to receive
either (i) if the date of such conversion falls after a Distribution Record Date
and on or prior to the next succeeding Distribution Date, all accrued and unpaid
Distributions on such Capital Securities (including interest thereon, if any, to
the extent permitted by applicable law) to such Distribution Date or (ii) if the
date of such conversion does not fall on a date described in clause (i) above,
all accrued and unpaid Distributions on such Capital Securities (including
interest thereon, if any, to the extent permitted by applicable law) to the most
recent Distribution Date prior to the date of such conversion, which
Distributions shall, in either such case, be paid to such converting holder
unless the date of conversion of such Capital Securities is on or prior to the
Distribution Date upon which such Extension Period ends and after the
Distribution Record Date for such Distribution Date, in which case such
Distributions shall be paid to the person who was the holder of such Capital
Securities (or one or more predecessor Capital Securities) at 5:00 p.m. (New
York City time) on such Distribution Record Date. The Company will make no
payment or allowance for distributions on the shares of Common Stock issued upon
such conversion, except to the extent that such shares of Common Stock are held
of record on the record date for any such distributions. Each conversion will be
deemed to have been effected immediately prior to 5:00 p.m. (New York City time)
on the day on which the related conversion notice was received by the Conversion
Agent.
No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by the
Company in cash based on the Closing Price of the Common Stock on the date such
Capital Securities are converted.
Conversion Price Adjustments -- General. The Conversion Price is subject to
adjustment in certain events, including (a) the issuance after the Issue Date of
shares of Common Stock as a dividend or a distribution with respect to Common
Stock, (b) subdivisions, combinations and reclassification of Common Stock
effected after the Issue Date, (c) the issuance to all holders of Common Stock
after the Issue Date of rights or warrants entitling them (for a period not
exceeding 45 days) to subscribe for or purchase shares of Common Stock at less
than the then Current Market Price (as defined below) of the Common Stock, (d)
the distribution to all holders of Common Stock after the Issue Date of
evidences of indebtedness, capital stock, cash or assets (including securities,
but excluding those rights, warrants, dividends and distributions referred to
above and dividends and distributions paid exclusively in cash), (e) the payment
of dividends (and other distributions) on Common Stock after the Issue Date paid
exclusively in cash, excluding cash dividends if the annualized per share amount
thereof does not exceed 15% of the Current Market Price of Common Stock as of
the trading day immediately preceding the date of declaration of such dividend,
and (f) payment to holders of Common Stock after the Issue Date in respect of a
tender or exchange offer (other than an odd-lot offer) by the Company for Common
Stock at a price in excess of 110% of
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the then Current Market Price of Common Stock as of the trading day next
succeeding the last date tenders or exchanges may be made pursuant to such
tender or exchange offer.
"Current Market Price" means, in general, the average of the daily Closing
Prices (as defined below) for the five consecutive trading days selected by the
Company commencing not more than 20 trading days before, and ending not later
than, the earlier of the day in question or, if applicable, the day before the
"ex" date (as defined) with respect to the issuance or distribution in question.
The Company from time to time may reduce the conversion price of the Junior
Subordinated Debentures (and thus the Conversion Price of the Capital
Securities) by any amount selected by the Company for any period of at least 20
days, in which case the Company shall give at least 15 days' notice of such
reduction. The Company may, at its option, make such reductions in the
Conversion Price, in addition to those set forth above, as the Company deems
advisable to avoid or diminish any income tax to holders of Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes. See "Certain
Federal Income Tax Considerations -- Adjustment of Conversion Price."
No adjustment of the Conversion Price will be made upon the issuance of any
shares of Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in shares of Common Stock under
any such plan, or upon the issuance of any shares of Common Stock or options or
rights pursuant to any employee benefit plan or program, or pursuant to any
option, warrant, right or any exercisable, exchangeable or convertible security
outstanding as of the date on which the Junior Subordinated Debentures are first
issued. No adjustment of the Conversion Price will be made upon the issuance of
rights under any shareholder rights plan. No adjustment in the Conversion Price
will be required unless adjustment would require a change of at least one
percent (1%) in the price then in effect; provided, however, that any adjustment
that would not be required to be made shall be carried forward and taken into
account in any subsequent adjustment. If any action would require adjustment of
the Conversion Price pursuant to more than one of the provisions described
above, only one adjustment shall be made with respect to that action and such
adjustment shall be the amount of adjustment that has the highest absolute value
to the holder of the Capital Securities.
Conversion Price Adjustment -- Merger, Consolidation or Sale of Assets of
the Company. In the event that the Company shall be a party to any transaction,
including, without limitation, and with certain exceptions, (a) a
recapitalization or reclassification of the Common Stock, (b) consolidation of
the Company with, or merger of the Company into, any other person, or any merger
of another person into the Company, (c) any sale, transfer or lease of all or
substantially all of the assets of the Company or (d) any compulsory share
exchange pursuant to which the Common Stock is converted into the right to
receive other securities, cash or other property (each of the foregoing being
referred to as a "Transaction"), then the holders of Capital Securities then
outstanding will have the right to convert the Capital Securities into the kind
and amount of securities, cash or other property receivable upon the
consummation of such Transaction by a holder of the number of shares of Common
Stock issuable upon conversion of such Capital Securities immediately prior to
such Transaction.
In the case of a Transaction, each Capital Security would become convertible
into the securities, cash or property receivable by a holder of the number of
shares of the Common Stock into which such Capital Security was convertible
immediately prior to such Transaction. This change could substantially lessen or
eliminate the value of the conversion privilege associated with the Capital
Securities in the future. For example, if the Company were acquired in a cash
merger, each Capital Security would become convertible solely into cash and
would no longer be convertible into securities which value would vary depending
on the future prospects of the Company and other factors.
Conversion Price adjustments or omissions in making such adjustments may,
under certain circumstances, be deemed to be distributions that could be taxable
as dividends to holders of Capital Securities or to the holders of Common Stock.
See "Certain Federal Income Tax Considerations -- Adjustment of Conversion
Price."
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Termination of Conversion Rights. On and after ________, and provided the
Trust is current in the payment of Distributions on the Capital Securities
(except to the extent that the payment of Distributions may have been duly
deferred as the result of an Extension Period), the Company may, at its option,
terminate the right to convert the Junior Subordinated Debentures into Common
Stock, in which case the right to convert the Capital Securities into Common
Stock will likewise terminate. The Company may exercise this option only if for
at least 20 trading days within any period of 30 consecutive trading days ending
on or after __________, including the last trading day of such period, the
Closing Price of the Common Stock exceeds 1__% of the then applicable Conversion
Price of the Capital Securities. To exercise this conversion termination option,
the Company must cause the Trust to issue a press release for publication on the
Dow Jones News Service or on a comparable news service announcing the Conversion
Termination Date prior to the opening of business on the second trading day
after a period in which the condition in the preceding sentence has been met,
but in no event may such press release be issued prior to __________. The press
release shall announce the Conversion Termination Date and provide the
Conversion Price and the Closing Price of the Capital Securities and the Common
Stock, in each case as of the close of business on the trading day next
preceding the date of the press release.
Notice of the termination of conversion rights will be given by first-class
mail to the holders of the Capital Securities not more than four Business Days
after the Trust issues the press release. The Conversion Termination Date will
be a Business Day selected by the Company not less than 30 nor more than 60 days
after the date on which the Trust issues the press release announcing its
intention to terminate conversion rights of Capital Security holders. In the
event that the Company exercises its conversion termination option, conversion
rights will expire at 5:00 p.m. (New York City time) on the Conversion
Termination Date. In the event the Company has not exercised its conversion
termination option and the Capital Securities are otherwise called for
redemption, the Capital Securities will be convertible at any time prior to 5:00
p.m. (New York City time) on the Business Day immediately preceding the date of
such redemption.
"Closing Price" of any security on any day means the last reported sale
price, regular way, on such day or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day, regular way,
in either case as reported on the NYSE Composite Tape, or, if such security is
not listed or admitted to trading on the NYSE, on the principal national
securities exchange on which such security is listed or admitted to trading, or
if such security is not listed or admitted to trading on a national securities
exchange, on the National Market System of the National Association of
Securities Dealers, Inc., or, if such security is not quoted or admitted to
trading on such quotation system, on the principal quotation system on which
such security is listed or admitted to trading or quoted, or, if not listed or
admitted to trading or quoted on any national securities exchange or quotation
system, the average of the closing bid and asked prices of such security in the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or, if not so available in such manner, as furnished by any NYSE member
firm selected from time to time by the Board of Directors of the Company for
that purpose or, if not so available in such manner, as otherwise determined in
good faith by the Board of Directors of the Company.
REDEMPTION
Upon the repayment on the Stated Maturity Date or prepayment prior to the
Stated Maturity Date of the Junior Subordinated Debentures, the proceeds from
such repayment or prepayment shall be applied by the Property Trustee to redeem
a Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days' notice of a date of redemption (the "Redemption Date") at
the applicable Redemption Price, which shall be equal to (i) in the case of the
repayment of the Junior Subordinated Debentures on the Stated Maturity Date, the
Maturity Redemption Price (equal to the principal of and accrued and unpaid
interest on the Junior Subordinated Debentures), (ii) in the case of the
optional prepayment of the Junior Subordinated Debentures upon the occurrence
and continuation of a Special Event, the Special Event Redemption Price (equal
to the Special Event Prepayment Price in respect of the Junior Subordinated
Debentures) and (iii) in the case of the optional prepayment of the Junior
Subordinated Debentures other than as contemplated in clause (ii) above, the
Optional Redemption Price (equal to the Optional Prepayment Price in respect of
the Junior Subordinated Debentures). See
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"Description of Junior Convertible Subordinated Debentures -- Optional
Prepayment" and "-- Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Junior Subordinated Debentures are distributed.
The Company will have the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after the Initial Optional Prepayment
Date, at the applicable Optional Prepayment Price and (ii) in whole but not in
part, at any time, upon the occurrence of a Special Event, at the Special Event
Prepayment Price.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Company will have the right at any time to dissolve the Trust and cause
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities in liquidation of the Trust, subject to satisfaction of liabilities
to creditors of the Trust as provided by applicable law. Such right is subject
to the receipt by the Company of any required regulatory approval and to the
Company having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Capital Securities.
The Trust shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Company or the
Trust, (ii) the distribution of a Like Amount of the Junior Subordinated
Debentures to the holders of the Trust Securities, if the Company, as holder of
the Common Securities, has given written direction to the Property Trustee to
dissolve the Trust (which direction is optional and, except as described above,
wholly within the discretion of the Company, as holder of the Common
Securities), (iii) redemption of all of the Trust Securities as described under
"-- Redemption" above, (iv) expiration of the term of the Trust and (v) the
entry of an order for the dissolution of the Trust by a court of competent
jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv), or (v) of
the preceding paragraph, the Trust will be liquidated by the Administrators as
expeditiously as practicable by distributing, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, to the holders of the
Trust Securities a Like Amount of the Junior Subordinated Debentures, in which
event such holders will be entitled to receive out of the assets of the Trust
legally available for distribution to holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Capital Securities and the Common Securities shall be paid on a pro
rata basis, except that if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities.
See "-- Subordination of Common Securities" below.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, and (ii) any certificates
representing Trust Securities will be deemed to represent Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrators or their agent for
cancellation, whereupon the Company will issue to such holder, and the Debenture
Trustee will authenticate, a certificate representing such Junior Subordinated
Debentures.
There can be no assurance as to the market prices for the Capital Securities
or, if a dissolution and liquidation of the Trust were to occur, for the Junior
Subordinated Debentures that may be distributed in exchange
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for the Trust Securities. Accordingly, the Capital Securities that an investor
may purchase, or the Junior Subordinated Debentures that the investor may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Capital Securities.
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Junior Subordinated Debentures. Any redemption of Trust
Securities shall be made and the applicable Redemption Price shall be payable on
the Redemption Date only to the extent that the Trust has funds legally
available for the payment of such applicable Redemption Price. See also
"--Subordination of Common Securities" below.
If the Trust gives a notice of redemption in respect of the Capital
Securities, then the Property Trustee, to the extent funds are legally
available, will give irrevocable instructions and authority to the Paying Agent
and will irrevocably deposit with the Paying Agent for the Capital Securities
funds sufficient to pay or cause the Paying Agent to pay the applicable
Redemption Price to the holders thereof upon surrender of their certificates
evidencing the Capital Securities. See "-- Payment and Paying Agency" below.
Distributions payable on or prior to the Redemption Date shall be payable to the
holders of such Capital Securities on the relevant Distribution Record Dates for
the related Distribution Dates. If notice of redemption shall have been given
and funds deposited with the Property Trustee to pay the Redemption Price for
the Capital Securities called for redemption, then all rights of the holders of
such Capital Securities will cease, except the right of the holders of such
Capital Securities to receive the applicable Redemption Price (without interest
on such Redemption Price) or to convert the holder's Capital Securities into
Common Stock as described under "-Conversion Rights" above and such Capital
Securities will cease to be outstanding. In the event that any Redemption Date
is not a Business Day, then the applicable Redemption Price payable on such date
will be paid on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay). In the event that
payment of the applicable Redemption Price is improperly withheld or refused and
not paid either by the Trust or by the Company pursuant to the Guarantee as
described under "Description of the Guarantee," (i) Distributions on Capital
Securities called for redemption will accumulate on the Redemption Price at the
then applicable rate, from the Redemption Date originally established by the
Trust to the date such applicable Redemption Price is actually paid, and (ii)
the actual payment date will be the Redemption Date for purposes of calculating
the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law and the regulations of the OTS), the Company or its
subsidiaries may at any time and from time to time purchase outstanding Capital
Securities by tender, in the open market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Company defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Junior Subordinated Debentures,
on and after the Redemption Date Distributions will cease to accrue on the Trust
Securities called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and the Common Securities, as applicable, shall be made pro rata
based on the Liquidation Amount of the Capital Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions on all of the outstanding
Capital Securities for all Distribution periods terminating on or prior thereto
or, in the case of Capital Securities called for redemption on a Redemption Date
on or prior thereto, the full amount of the
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Redemption Price therefor, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions on, or Redemption Price of, the Capital Securities
then due and payable.
In the case of any Event of Default, the Company as holder of the Common
Securities will be deemed to have waived any right to act with respect to such
Event of Default until the effect of such Event of Default shall have been
cured, waived or otherwise eliminated. Until any such Event of Default has been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of the Capital Securities and not on behalf of the
Company as holder of the Common Securities, and only the holders of the Capital
Securities will have the right to direct the Property Trustee to act on their
behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default (see "Description of Junior
Convertible Subordinated Debentures -- Debenture Events of Default") constitutes
an "Event of Default" under the Declaration.
Within 10 business days after the occurrence of any Event of Default
actually known to the Company, the Company shall transmit notice of such Event
of Default to the holders of the Capital Securities, the Administrators and the
Property Trustee, unless such Event of Default shall have been cured or waived.
The Company, as Sponsor, and the Administrators are required to file annually
with the Property Trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to them under the
Declaration.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described under
" -- Liquidation of the Trust and Distribution of Junior Subordinated
Debentures" and " -- Subordination of Common Securities" above.
REMOVAL OF ISSUER TRUSTEES AND ADMINISTRATORS
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee or Administrator may be removed at any time by the holder of
the Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in Liquidation Amount of the outstanding
Capital Securities. In no event will the holders of the Capital Securities have
the right to vote to appoint, remove or replace the Administrators, which voting
rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee or Administrator and
no appointment of a successor trustee or administrator shall be effective until
the acceptance of appointment by the successor trustee or administrator in
accordance with the provisions of the Declaration.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES AND ADMINISTRATORS
Any entity into which the Property Trustee, the Delaware Trustee or any
Administrator that is not a natural person may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which such Issuer Trustee or Administrator shall
be a party, or any entity succeeding to all or substantially all the corporate
trust business of such Issuer Trustee or Administrator, shall be the successor
of such Issuer Trustee or Administrator under the Declaration, provided such
entity shall be otherwise qualified and eligible.
MERGERS, CONVERSIONS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge or convert with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other Person,
except as described below or as otherwise described in " -- Liquidation of the
Trust and Distribution of
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Junior Subordinated Debentures." The Trust may, at the request of the Company,
as holder of the Common Securities, but without the consent of the holders of
the Capital Securities, merge or convert with or into, consolidate, amalgamate,
or be replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Capital
Securities or (b) substitutes for the Capital Securities other securities having
substantially the same terms as the Capital Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Capital
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Company expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee with respect to the Junior Subordinated Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Capital Securities are then listed or quoted, if any,
(iv) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Securities) in any material respect (other
than any dilution of such holders' interests in the new entity), (vi) such
successor entity has a purpose substantially identical to that of the Trust,
(vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has received an opinion
from independent counsel to the Trust experienced in such matters to the effect
that (a) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Capital Securities (including any Successor
Securities) in any material respect (other than any dilution of such holders'
interests in the new entity), and (b) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and (viii) the Company or any permitted successor or
assignee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Trust Securities, consolidate, amalgamate, merge or
convert with or into, or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge or
convert with or into, or replace it if such consolidation, amalgamation, merger,
conversion, replacement, conveyance, transfer or lease would cause the Trust or
the successor entity not to be classified as a grantor trust for United States
federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under " -- Mergers, Conversions,
Consolidations, Amalgamations or Replacements of the Trust" above and
"Description of the Guarantee -- Amendments and Assignment" and as otherwise
required by law and the Declaration, the holders of the Capital Securities will
have no voting rights.
The Declaration may be amended from time to time by the Company, the
Property Trustee and the Administrators, without the consent of the holders of
the Trust Securities (i) to cure any ambiguity, correct or supplement any
provisions in the Declaration that may be inconsistent with any other provision,
or to make any other provisions with respect to matters or questions arising
under the Declaration, which shall not be inconsistent with the other provisions
of the Declaration, or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Trust Securities are outstanding or to ensure that the
Trust will not be required to register as an "investment company" under the
Investment Company Act; provided, however, that in the case of clause (i), such
action shall not adversely affect in any material respect the interests of the
holders of the Trust Securities. Any amendments of the Declaration pursuant to
the foregoing shall become effective when notice thereof is given to the holders
of the Trust Securities. The Declaration may be amended by
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the Issuer Trustees, the Administrators and the Company (i) with the consent of
holders representing a majority (based upon Liquidation Amount) of the
outstanding Trust Securities, and (ii) upon receipt by the Issuer Trustees and
the Administrators of an opinion of counsel to the effect that such amendment or
the exercise of any power granted to the Issuer Trustees or Administrators in
accordance with such amendment will not affect the Trust's status as a grantor
trust for United States federal income tax purposes or the Trust's exemption
from status as an "investment company" under the Investment Company Act,
provided that, without the consent of each holder of Trust Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution or other payment on the Trust Securities or otherwise adversely
affect the amount of any Distribution or other payment required to be made in
respect of the Trust Securities as of a specified date or (ii) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Debenture Trustee with respect to
the Junior Subordinated Debentures, (ii) waive certain past defaults under the
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior Subordinated
Debentures or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that such action will not
affect the Trust's status as a grantor trust for United States federal income
tax purposes.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of Capital Securities will be required for
the Trust to redeem and cancel the Capital Securities in accordance with the
Declaration.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company or any affiliate of the Company shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities shall be made by check mailed
to the address of the holder entitled thereto as such address shall appear on
the register. The paying agent (the "Paying Agent") shall initially be the
Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Company, as holder of the Common Securities. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Company, as holder of the Common Securities,
shall appoint a successor (which shall be a bank or trust company) to act as
Paying Agent.
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REGISTRAR, TRANSFER AGENT AND CONVERSION AGENT
The Property Trustee will act as registrar, transfer agent and Conversion
Agent for the Capital Securities.
Registration of transfers of the Capital Securities will be effected without
charge by or on behalf of the Trust but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Trust will not be required to register or cause to be registered
the transfer of any Capital Securities (i) during the period starting 15 days
before the mailing of a notice of redemption and ending on the date of such
mailing and (ii) after they have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee is under no obligation to exercise any of the powers
vested in it by the Declaration at the request of any holder of Trust Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. If no Event of Default has occurred
and is continuing and the Property Trustee is required to decide between
alternative causes of action, construe ambiguous provisions in the Declaration
or is unsure of the application of any provision of the Declaration, and the
matter is not one on which holders of the Capital Securities or the Common
Securities are entitled under the Declaration to vote, then the Property Trustee
shall take such action as is directed by the Company and, if not so directed,
shall take such action as it deems advisable and in the best interests of the
holders of the Trust Securities and will have no liability except for its own
bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrators are authorized and directed to conduct the affairs of and
to operate the Trust in such a way that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act,
so that the Trust will be classified for United States federal income tax
purposes as a grantor trust and so that the Junior Subordinated Debentures will
be treated as indebtedness of the Company for United States federal income tax
purposes. In this connection, the Company and the Administrators are authorized
to take any action, not inconsistent with applicable law, the certificate of
trust of the Trust or the Declaration, that the Company and the Administrators
determine in their discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the interests of the
holders of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
DESCRIPTION OF JUNIOR CONVERTIBLE SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued under an Indenture (the
"Indenture"), between the Company and The Bank of New York, as trustee (the
"Debenture Trustee"). The Indenture will be qualified under the Trust Indenture
Act. This summary of certain terms and provisions of the Junior Subordinated
Debentures and the Indenture does not purport to be complete and, where
reference is made to particular provisions of the Indenture, such provisions,
including the definitions of certain terms, some of which are not otherwise
defined herein, are qualified in their entirety by reference to all of the
provisions of the Indenture and the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Capital Securities, the Trust will
invest the proceeds thereof, together with the consideration paid by the Company
for the Common Securities, in Junior Subordinated Debentures issued by the
Company. The Junior Subordinated Debentures will bear interest at the annual
rate of 8.00% of the
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principal amount thereof, payable quarterly in arrears on January 31, April 30,
July 31 and October 31 of each year (each, an "Interest Payment Date"),
commencing _______________, 1997, to the person in whose name each Junior
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the fifteenth day of the month preceding the month in which
the relevant Interest Payment Date falls (each, a "Payment Record Date"). It is
anticipated that, until the liquidation, if any, of the Trust, each Junior
Subordinated Debenture will be held in the name of the Property Trustee in trust
for the benefit of the holders of Trust Securities. The amount of interest
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months and, for any period of less than a full calendar month, the number
of days elapsed in such month. In the event that any date on which interest is
payable on the Junior Subordinated Debentures is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay), with the same force and effect as if made on the date such
payment was originally payable. Accrued interest that is not paid on the
applicable Interest Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the rate per annum of 8.00% thereof,
compounded quarterly. The term "interest", as used herein, shall include
quarterly interest payments, interest on quarterly interest payments not paid on
the applicable Interest Payment Date and Additional Sums (as defined herein), as
applicable. The Junior Subordinated Debentures will mature on ________, 2027
(the "Stated Maturity Date").
The Junior Subordinated Debentures will rank pari passu with all Other
Debentures and will be unsecured and subordinate and rank junior in right of
payment to the extent and in the manner set forth in the Indenture to all Senior
Indebtedness of the Company. See "-- Subordination" below. Because the Company
is a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such distribution) is subject to the prior
claims of creditors of that subsidiary (including depositors in the case of the
Bank), except to the extent that the Company may itself be recognized as a
creditor of that subsidiary. At June 30, 1997, the subsidiaries of the Company
had total liabilities (excluding liabilities owed to the Company) of
approximately $3.1 billion, including deposits, in the case of the Bank.
Accordingly, the Capital Securities will be effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, and holders of
Capital Securities should look only to the assets of the Company for payments on
the Capital Securities. The Indenture does not limit the incurrence or issuance
of other secured or unsecured debt of the Company, including Senior
Indebtedness, whether under any other indenture that the Company may enter into
in the future or otherwise, and does not limit the incurrence or issuance of
secured or unsecured debt by the Company's subsidiaries. See "--Subordination"
below.
In addition, as the Company is a non-operating holding company, almost all
of the operating assets of the Company are owned by the Company's subsidiaries.
The Company relies primarily on dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its outstanding debt
obligations, if any, and corporate expenses. The Bank is subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Company and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Company and such other affiliates from borrowing from the Bank unless the loans
are secured by various types of collateral. Further, such secured loans, other
transactions and investments by the Bank are generally limited in amount as to
the Company and as to each of such other affiliates to 10% of such Bank's
capital and surplus and as to the Company and all of such other affiliates to an
aggregate of 20% of such Bank's capital and surplus. In addition, payment of
dividends to the Company by the Bank is subject to ongoing review by banking
regulators and is subject to various statutory limitations and in certain
circumstances requires prior approval by banking regulatory authorities. In
addition, in 1988 the Bank issued Series A and Series B subordinated capital
notes, and the agreements governing such notes restrict the amounts which the
Bank can pay to the Company by way of cash dividends. Under current OTS
regulations and restrictions imposed by the Bank's subordinated indebtedness
referred to above, at July 1, 1997, the Bank could have declared dividends to
the Company of approximately $11.5 million, of which approximately $8.0 million
has been subsequently declared and paid to the Company. Federal and state
regulatory agencies also
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have the authority to limit further the Bank's payment of dividends based on
other factors, such as the maintenance of adequate capital for the Bank, which
could reduce the amount of dividends otherwise payable.
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, and any interest on Junior
Subordinated Debentures will be made at the office of the Debenture Trustee in
The City of New York or at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that at the option of the
Company payment of any interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the register for
Junior Subordinated Debentures or (ii) by transfer to an account maintained by
the Person entitled thereto as specified in such register, provided that proper
transfer instructions have been received by the relevant Record Date. Payment of
any interest on any Junior Subordinated Debenture will be made to the Person in
whose name such Junior Subordinated Debenture is registered at the close of
business on the Payment Record Date for such interest, except in the case of
defaulted interest. The Company may at any time designate additional Paying
Agents or rescind the designation of any Paying Agent; however the Company will
at all times be required to maintain a Paying Agent in each place of payment for
the Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by the Company in trust, for the payment of the principal of and premium,
if any, or interest on any Junior Subordinated Debenture and remaining unclaimed
for two years after such principal and premium, if any, or interest has become
due and payable shall, at the request of the Company, be repaid to the Company
and the holder of such Junior Subordinated Debenture shall thereafter look, as a
general unsecured creditor, only to the Company for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is continuing, the
Company will have the right under the Indenture at any time during the term of
the Junior Subordinated Debentures to defer the payment of interest at any time
or from time to time for a period not exceeding 20 consecutive quarters with
respect to each Extension Period, provided that no Extension Period will end on
a day other than an interest payment date for the Junior Subordinated Debentures
or extend beyond the Stated Maturity Date. At the end of an Extension Period,
the Company must pay all interest then accrued and unpaid (together with
interest thereon accrued at the annual rate of 8.00%, compounded quarterly, to
the extent permitted by applicable law). During an Extension Period, interest
will continue to accrue and, if the Junior Subordinated Debentures have been
distributed to holders of the Trust Securities, holders of Junior Subordinated
Debentures (or holders of the Trust Securities while Trust Securities are
outstanding) will be required to accrue OID in respect of the stated interest on
the Capital Securities for United States federal income tax purposes prior to
the receipt of cash attributable to such income. See "Certain Federal Income Tax
Considerations -- Interest, Original Issue Discount, Premium and Market
Discount."
During any such Extension Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock, (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Junior Subordinated Debentures or (iii) make any guarantee payments with respect
to any guarantee by the Company of any securities of any subsidiary of the
Company (including Other Guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the Junior Subordinated Debentures, other than (a)
dividends or distributions in shares of or options, warrants or rights to
subscribe for or purchase shares of, Common Stock or preferred stock of the
Company, (b) any declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) as a direct result of, and only to the
extent required in order to avoid the issuance of fractional shares of capital
stock following, a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of
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the Company's capital stock for another class or series of the Company's capital
stock, (e) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, and (f) purchases of Common
Stock related to the issuance of Common Stock or rights under any of the
Company's benefit plans for its directors, officers or employees or any of the
Company's dividend reinvestment plans.
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 20 consecutive quarters or to extend
beyond the Stated Maturity Date. Upon the termination of any such Extension
Period and the payment of all amounts then due on any Interest Payment Date, the
Company may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company must give the Property Trustee, the
Administrators and the Debenture Trustee notice of its election of any Extension
Period (or an extension thereof) at least five Business Days prior to the
earlier of (i) the date the Distributions on the Trust Securities would have
been payable except for the election to begin or extend such Extension Period or
(ii) the date the Administrators are required to give notice to any securities
exchange or to holders of Capital Securities of the Distribution Record Date or
the date such Distributions are payable, but in any event not less than five
Business Days prior to such record date. The Debenture Trustee shall give notice
of the Company's election to begin or extend a new Extension Period to the
holders of the Capital Securities. There is no limitation on the number of times
that the Company may elect to begin an Extension Period.
OPTIONAL PREPAYMENT
The Junior Subordinated Debentures will be prepayable, in whole or in part,
at the option of the Company, on or after the Initial Optional Prepayment Date,
at a prepayment price (the "Optional Prepayment Price") equal to 100% of the
outstanding principal amount of the Junior Subordinated Debentures to be
prepaid, plus accrued interest thereon to the date of prepayment.
SPECIAL EVENT PREPAYMENT
If a Special Event shall occur and be continuing, the Company may, at any
time prior to or after the Initial Optional Prepayment Date, within 90 days
after the occurrence of the Special Event, at its option, prepay the Junior
Subordinated Debentures in whole, but not in part, at a prepayment price (the
"Special Event Prepayment Price") equal to 100% of the principal amount of such
Junior Subordinated Debentures plus accrued and unpaid interest thereon to the
date of prepayment.
A "Special Event" means a Tax Event, a Regulatory Capital Event or an
Investment Company Event, as the case may be.
A "Tax Event" means (a) the receipt by the Company and the Trust of an
opinion of Weil, Gotshal & Manges LLP or any other nationally recognized tax
counsel experienced in such matters, to the effect that as a result of (i) any
amendment to, clarification of, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein, (ii) any amendment
to, clarification of, or change in, an interpretation or application of any such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination or the
publication of an explanation of legislation by the staff of the Joint Committee
on Taxation), (iii) any interpretation or pronouncement that provides for a
position with respect to such laws or regulations that differs from the
theretofore generally accepted position or (iv) any judicial decision,
administrative pronouncement, ruling, regulatory procedure, notice, announcement
(including any notice or announcement of intent to adopt procedures or
regulations) or any other actions taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or
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announced or which action is taken, in each case, on or after the Issue Date,
there is more than an insubstantial risk that (x) the Trust is or within 90 days
will be subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Debentures, (y) interest payable
by the Company on the Junior Subordinated Debentures is not or within 90 days
will not be deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (z) the Trust is or within 90 days will be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges, or (b) a proposed audit adjustment by a taxing authority
which, if sustained, would result in any of the events described in clauses (x),
(y) or (z) above (without regard to the 90 day period referred to therein).
A "Regulatory Capital Event" means the receipt by the Company and the
Trust of an opinion of Weil, Gotshal & Manges LLP or any other independent bank
regulatory counsel experienced in such matters, to the effect that, as a result
of (a) any amendment to, or change (including any announced prospective change)
in, the laws (or any regulations thereunder) of the United States or any rules,
guidelines or policies of the OTS, the Board of Governors of the Federal Reserve
System (the "Federal Reserve") or any other federal bank regulatory agency or
(b) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the Issue Date, (i) the
Company is or within 90 days will be subject to capital adequacy requirements
and such requirements do not or will not permit the Capital Securities to
constitute, subject to limitations on inclusion of the Capital Securities as
Tier 1 capital imposed by Federal Reserve capital guidelines in effect as of the
date of this Prospectus, Tier 1 capital (or its then-equivalent) or (ii) the
amount of net proceeds received from the sale of the Capital Securities and
contributed by the Company to the Bank does not or within 90 days will not
constitute Tier 1 (core) capital (or its then-equivalent).
An "Investment Company Event" means the receipt by the Company and the
Trust of an opinion of Weil, Gotshal & Manges LLP or any other nationally
recognized counsel experienced in such matters, to the effect that (a) as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or any
political subdivision or authority thereof or therein or (b) any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the Issue Date, there is more
than an insubstantial risk that the Trust is or within 90 days will be
considered an "investment company" that is required to be registered under the
Investment Company Act.
"Additional Sums" means such additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities shall not be reduced as a
result of any additional taxes, duties or other governmental charges to which
the Trust has become subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the Company defaults
in payment of the prepayment price, on and after the prepayment date interest
ceases to accrue on such Junior Subordinated Debentures called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Junior Subordinated Debentures the Additional Sums.
CERTAIN COVENANTS OF THE COMPANY
If (1) a Debenture Event of Default occurs (other than solely a default as
described in paragraph (iii) under "-- Debenture Events of Default" below), (2)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time, or both, would be, a
Debenture Event of Default (other than solely a default as described in
paragraph (iii) under "-- Debenture Events of Default") and
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(b) in respect of which the Company shall not have taken reasonable steps to
cure, (3) the Company shall be in default with respect to its payment of any
obligations under the Guarantee or (4) the Company shall have given notice of
its election of an Extension Period, or any extension thereof, as provided in
the Indenture and shall not have rescinded such notice, and such Extension
Period, or any extension thereof, shall have commenced, then the Company will
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in right of
payment to the Junior Subordinated Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Company of any securities of any
subsidiary of the Company (including Other Guarantees) if such guarantee ranks
pari passu or junior in right of payment to the Junior Subordinated Debentures,
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock or preferred stock
of the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) as a direct result of,
and only to the extent required in order to avoid the issuance of fractional
shares of capital stock following a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of Common Stock related
to the issuance of Common Stock or rights under any of the Company's benefit
plans for its directors, officers or employees or any of the Company's dividend
reinvestment plans.
The Company will also covenant to (i) maintain 100% ownership of the
Common Securities; provided, however, that any permitted successor of the
Company under the Indenture may succeed to the Company's ownership of the Common
Securities, (ii) use its reasonable efforts to cause the Trust (a) to remain a
statutory business trust, except in connection with the distribution of Junior
Subordinated Debentures to the holders of Trust Securities in liquidation of the
Trust, the redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration
of the Trust, and (b) to continue not to be classified as an association taxable
as a corporation or a partnership for United States federal income tax purposes
and (iii) use its reasonable efforts to cause each holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Junior Subordinated
Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures constitutes a
"Debenture Event of Default" (whatever the reason for such Debenture Event of
Default and whether it shall 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):
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debentures or any Other Debentures, when due (subject to the deferral of
any due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debentures or any Other Debentures when due whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written
notice to the Company from the Debenture Trustee or the holders of at
least 25% in aggregate outstanding principal amount of Junior Subordinated
Debentures; or
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(iv) certain events in bankruptcy, insolvency or reorganization of
the Company.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debentures may declare
the principal due and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the Junior
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the nonpayment of the principal of the Junior Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders of
all the Junior Subordinated Debentures, waive any past default except a default
in the payment of principal of or premium, if any, or interest on, the Junior
Subordinated Debentures (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and premium, if any, and principal
due otherwise than by acceleration has been deposited with the Debenture
Trustee) or a default in respect of a covenant or provision which under the
Indenture cannot be modified or amended without the consent of the holder of
each outstanding Junior Subordinated Debenture.
The Indenture requires the annual filing by the Company with the Debenture
Trustee of a certificate as to the absence of certain defaults under the
Indenture.
The Indenture provides that the Debenture Trustee may withhold notice of a
Debenture Event of Default from the holders of the Junior Subordinated
Debentures (except a Debenture Event of Default in payment of principal of, or
of interest or premium on, the Junior Subordinated Debentures) if the Debenture
Trustee considers it in the interest of such holders to do so.
CONVERSION OF THE JUNIOR SUBORDINATED DEBENTURES
Junior Subordinated Debentures will be convertible at any time prior to
the earlier of (i) 5:00 p.m. (New York City time) on the Business Day
immediately preceding the date of repayment of such Junior Subordinated
Debentures, whether at maturity or upon prepayment, and (ii) 5:00 p.m. (New York
City time) on the Conversion Termination Date (if any), into Common Stock at the
option of the holders of the Junior Subordinated Debentures at the Conversion
Price referred to on the cover page of this Prospectus, subject to the
Conversion Price adjustments described under "Description of Capital Securities
- -- Conversion Rights." The Trust will covenant not to convert Junior
Subordinated Debentures held by it except pursuant to a notice of conversion
delivered to the Conversion Agent by a holder of Capital Securities. Upon
surrender of a Capital Security to the Conversion Agent for conversion, the
Trust will distribute $25.00 principal amount of the Junior Subordinated
Debentures to the Conversion Agent on behalf of the holder of the Capital
Security so converted, whereupon the Conversion Agent will convert such Junior
Subordinated Debentures into Common Stock on behalf of such holder. The
Company's delivery to the holders of the Junior Subordinated Debentures (through
the Conversion Agent) of the fixed number of shares of Common Stock into which
the Junior Subordinated Debentures are convertible (together with the cash
payment, if any, in lieu of fractional shares) will be deemed to satisfy the
Company's obligation to pay the principal amount of the Junior Subordinated
Debentures so converted, and the accrued and unpaid interest thereon
attributable to the period from the last date to which interest has been paid or
duly provided for; provided, however, that if any Junior Subordinated Debenture
is converted after a Payment Record Date, the interest payable on the related
Interest Payment Date with respect to such Junior Subordinated Debenture shall
be paid to the Trust (which will distribute such interest to the holder of such
Junior Subordinated Debentures on the Payment Record Date) or other holder of
such Junior Subordinated Debenture on the Payment Record Date, as the case may
be, despite such conversion; provided, further, that if notice of prepayment of
Junior Subordinated Debentures is mailed or otherwise given to holders of Junior
Subordinated
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Debentures or the Trust issues a press release announcing a Conversion
Termination Date, then, if any holder of Junior Subordinated Debentures converts
any Junior Subordinated Debentures into Common Stock on any date on or after the
date on which such notice of prepayment is mailed or otherwise given or the date
of such press release, as the case may be, and if such date of conversion falls
on any day from and including the first day of an Extension Period and on or
prior to the Interest Payment Date on which such Extension Period ends, such
converting holder shall be entitled to receive either (i) if the date of such
conversion falls after a Payment Record Date and on or prior to the next
succeeding Interest Payment Date, all accrued and unpaid interest on such Junior
Subordinated Debentures to such Interest Payment Date or (ii) if the date of
such conversion does not fall on a date described in clause (i) above, all
accrued and unpaid interest on such Junior Subordinated Debentures to the most
recent Interest Payment Date prior to the date of such conversion, which
interest shall, in either such case, be paid to such converting holder, unless
the date of conversion of such Junior Subordinated Debentures is on or prior to
the Interest Payment Date upon which such Extension Period ends and after the
Payment Record Date for such Interest Payment Date, in which case such interest
shall be paid to the person who was the holder of such Junior Subordinated
Debentures (or one or more predecessor Junior Subordinated Debentures) at 5:00
p.m. (New York City time) on such Payment Record Date, which amount shall be
simultaneously distributed to the holders of the Capital Securities so that any
holder of Capital Securities who delivers such Capital Securities for conversion
(or who held such converted Capital Securities at 5:00 p.m. (New York City time)
on the Payment Record Date for the Interest Payment Date upon which such
Extension Period ends, as the case may be) under the circumstances and during
the periods described above will be entitled to receive accumulated and unpaid
Distributions in a corresponding amount. See "Description of Capital Securities
- -- Conversion Rights" and "-- Redemption."
On and after __________, the Company may, at its option, terminate the
conversion rights of holders of the Junior Subordinated Debentures if (i) the
Company is then current in the payment of interest on the Junior Subordinated
Debentures (except to the extent that the payment of interest has been duly
deferred as the result of an Extension Period) and (ii) for at least 20 trading
days within any period of 30 consecutive trading days ending on or after
__________, including the last trading day of such period, the Closing Price of
the Common Stock shall have exceeded 1__% of the then applicable Conversion
Price of the Junior Subordinated Debentures. In order to exercise this
conversion termination option, the Company must cause the Trust to issue (or, if
the Junior Subordinated Debentures shall have been distributed to holders of the
Capital Securities following a Special Event, the Company must issue) a press
release for publication on the Dow Jones News Service or on a comparable news
service announcing the Conversion Termination Date prior to the opening of
business on the second trading day after a period in which the condition in the
preceding sentence has been met, but in no event prior to __________. The press
release shall announce the Conversion Termination Date and provide the
Conversion Price and the Closing Price of the Capital Securities and the Common
Stock, in each case as of the close of business on the trading day next
preceding the date of the press release. The Company is also required to give
notice by first-class mail to holders of the Junior Subordinated Debentures in
the manner provided for holders of Capital Securities under "Description of
Capital Securities -- Conversion Rights -- Termination of Conversion Rights."
The Conversion Termination Date will be a Business Day selected by the Company
which is not less than 30 nor more than 60 calendar days after the date on which
such press release is issued. In the event that the Company exercises its
conversion termination option, conversion rights will expire at 5:00 p.m. (New
York City time) on the Conversion Termination Date. In the event that the
Company has not exercised its conversion termination option and the Junior
Subordinated Debentures are otherwise called for prepayment, the Junior
Subordinated Debentures will be convertible at any time prior to 5:00 p.m. (New
York City time) on the Business Day immediately preceding the date of such
redemption and in any other case at any time prior to 5:00 p.m. (New York City
time) on the Business Day immediately preceding the Stated Maturity Date of the
Junior Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Company to pay interest or premium,
if any, on or principal of the Junior Subordinated Debentures on the due date, a
holder of Capital Securities may institute a Direct Action. A holder of Capital
Securities may,
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to the fullest extent permitted by law, also institute an action to enforce the
rights of the Property Trustee if the Property Trustee fails to enforce its
rights as the holder of the Junior Subordinated Debentures. The Company may not
amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Capital
Securities. Notwithstanding any payments made to a holder of Capital Securities
by the Company in connection with a Direct Action, the Company shall remain
obligated to pay the principal of or premium, if any, or interest on, the Junior
Subordinated Debentures, and the Company shall be subrogated to the rights of
the holder of such Capital Securities with respect to payments on the Capital
Securities to the extent of any payments made by the Company to such holder in
any Direct Action.
The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the Junior Subordinated Debentures. See "Description of
Capital Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any Person, and no
Person shall consolidate with or merge into the Company or convey, transfer or
lease its properties and assets as an entirety or substantially as an entirety
to the Company, unless: (i) in case the Company consolidates with or merges into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any State or the District of Columbia, and such
successor Person expressly assumes the Company's obligations on the Junior
Subordinated Debentures, (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have occurred and be
continuing, and (iii) certain other conditions as prescribed in the Indenture
are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Company that may adversely affect holders of the
Junior Subordinated Debentures.
MODIFICATION OF THE INDENTURE
From time to time the Company and the Debenture Trustee may, without the
consent of the holders of Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies; provided that, in any such case,
such action does not materially adversely affect the interest of the holders of
Junior Subordinated Debentures. The Indenture contains provisions permitting the
Company and the Debenture Trustee, with the consent of the holders of a majority
in principal amount of the Junior Subordinated Debentures, to modify the
Indenture in a manner affecting the rights of the holders of Junior Subordinated
Debentures; provided that no such modification may, without the consent of the
holders of each outstanding Junior Subordinated Debenture so affected, (i)
change the Stated Maturity Date, or reduce the principal amount of the Junior
Subordinated Debentures or reduce the rate or extend the time of payment of
interest thereon or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures the holders of which are required to consent to any such
modification of the Indenture.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at maturity within one year, and the Company deposits or causes to be deposited
with the Debenture Trustee funds, in trust, for the purpose and in an amount
sufficient to pay and discharge the entire indebtedness on the Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal and premium, if any, and interest to the date of
the deposit or to the Stated Maturity Date, as the case
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may be, then the Indenture will cease to be of further effect (except as to the
Company's obligations to pay all other sums due pursuant to the Indenture and to
provide the officers' certificates and opinions of counsel described therein),
and the Company will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
In the Indenture, the Company has agreed that any Junior Subordinated
Debentures issued thereunder will be subordinate and junior in right of payment
to all Senior Indebtedness to the extent provided in the Indenture. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Indebtedness will
first be entitled to receive payment in full of all Allocable Amounts (as
defined below) in respect of such Senior Indebtedness before the holders of
Junior Subordinated Debentures will be entitled to receive or retain any payment
in respect thereof.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
Allocable Amounts due in respect of such Senior Indebtedness before the holders
of Junior Subordinated Debentures will be entitled to receive or retain any
payment in respect of the Junior Subordinated Debentures.
No payments on account of principal or premium, if any, or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there shall
have occurred and be continuing a default in any 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, or if any judicial
proceeding shall be pending with respect to any such default.
"Allocable Amounts," when used with respect to any Senior Indebtedness,
means all amounts due or to become due on such Senior Indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Company or any
other obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
Indebtedness pursuant to any provision of such indebtedness for the payment over
of amounts received on account of such indebtedness to the holders of such
Senior Indebtedness or otherwise) but for the fact that such Senior Indebtedness
is subordinate or junior in right of payment to (or subject to a requirement
that amounts received on such Senior Indebtedness be paid over to obligees on)
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"Indebtedness" means (i) any obligation of, or any obligation guaranteed
by, the Company for the repayment of borrowed money, whether or not evidenced by
bonds, debentures, notes or other written instruments and any deferred
obligation for the payment of the purchase price of property or assets acquired
other than in the ordinary course of business and (ii) all indebtedness of the
Company for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements,
whether outstanding on the date of execution of the Indenture or thereafter
created, assumed or incurred. For purposes of this definition "claim" has the
meaning assigned in Section 101(5) of the Bankruptcy Code of 1978, as amended
and in effect on the date of the execution of the Indenture.
"Indebtedness Ranking on a Parity with the Junior Subordinated Debentures"
means Indebtedness, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, which specifically by its
terms ranks equally with and not prior to the Junior Subordinated Debentures in
the right of payment upon the happening of the dissolution or winding-up or
liquidation or reorganization of the Company. The securing of any Indebtedness,
otherwise constituting Indebtedness Ranking on a Parity with the Junior
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Subordinated Debentures, shall not be deemed to prevent such Indebtedness from
constituting Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures.
"Indebtedness Ranking Junior to the Junior Subordinated Debentures" means
any Indebtedness, whether outstanding on the date of execution of the Indenture
or thereafter created, assumed or incurred, which specifically by its terms
ranks junior to and not equally with or prior to the Junior Subordinated
Debentures (and any other Indebtedness Ranking on a Parity with the Junior
Subordinated Debentures) in right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Company. The
securing of any Indebtedness, otherwise constituting Indebtedness Ranking Junior
to the Junior Subordinated Debentures, shall not be deemed to prevent such
Indebtedness from constituting Indebtedness Ranking Junior to the Junior
Subordinated Debentures.
"Senior Indebtedness" means all Indebtedness, whether outstanding on the
date of execution of the Indenture or thereafter created, assumed or incurred,
except Indebtedness Ranking on a Parity with the Junior Subordinated Debentures
or Indebtedness Ranking Junior to the Junior Subordinated Debentures, and any
deferrals, renewals or extensions of such Senior Indebtedness.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Company in the future. The Company
expects from time to time to incur additional indebtedness constituting Senior
Indebtedness.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by
and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF THE GUARANTEE
The Guarantee will be executed and delivered by the Company concurrently
with the issuance by the Trust of the Capital Securities for the benefit of the
holders from time to time of the Capital Securities. The Bank of New York will
act as indenture trustee ("Guarantee Trustee") under the Guarantee. The
Guarantee will be qualified under the Trust Indenture Act. This summary of
certain provisions of the Guarantee does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the provisions
of the Guarantee, including the definitions therein of certain terms, and the
Trust Indenture Act. The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the Capital Securities.
GENERAL
The Company will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Capital Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert other than
the defense of payment. The following payments with respect to the Capital
Securities, to the extent not paid by or on behalf of the Trust
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(the "Guarantee Payments"), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on Capital Securities,
to the extent the Trust has funds on hand legally available therefor, (ii) the
Redemption Price with respect to any Capital Securities called for redemption,
to the extent that the Trust has funds on hand legally available therefor, or
(iii) upon a voluntary or involuntary dissolution and liquidation of the Trust
(unless the Junior Subordinated Debentures are distributed to holders of the
Capital Securities), the lesser of (a) the Liquidation Distribution and (b) the
amount of assets of the Trust remaining available for distribution to holders of
Capital Securities. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of the Capital Securities or by causing the Trust to pay such amounts to
such holders.
The Guarantee will rank subordinate and junior in right of payment to all
Senior Indebtedness to the extent provided therein. See "-- Status" below.
Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary, including the Bank,
upon such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution) is subject to the prior claims of creditors of such subsidiary,
except to the extent the Company may itself be recognized as a creditor of such
subsidiary. Accordingly, the Company's obligations under the Guarantee
effectively will be subordinated to all existing and future liabilities of its
subsidiaries, including the Bank, and claimants should look only to the assets
of the Company for payments thereunder. See "Description of Junior Convertible
Subordinated Debentures -- General." The Guarantee does not limit the incurrence
or issuance of other secured or unsecured debt of the Company, including Senior
Indebtedness, whether under the Indenture, any other indenture that the Company
may enter into in the future or otherwise, and does not limit the incurrence or
issuance of secured or unsecured debt by the Company's subsidiaries.
The Company will, through the Guarantee, the Declaration, the Junior
Subordinated Debentures and the Indenture, taken together, fully, irrevocably
and unconditionally guarantee all of the Trust's obligations under the Capital
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Capital Securities. See "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee."
STATUS
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Indebtedness
in the same manner as the Junior Subordinated Debentures.
The Guarantee will rank pari passu with the Junior Subordinated Debentures
and with all other guarantees (if any) issued by the Company after the Issue
Date with respect to capital securities (if any) issued by Other Trusts. The
Guarantee will constitute a guarantee of payment and not of collection (i.e.,
the guaranteed party may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee without first instituting a
legal proceeding against any other person or entity). The Guarantee will be held
for the benefit of the holders of the Capital Securities. The Guarantee will not
be discharged except by payment of the Guarantee Payments in full to the extent
not paid by the Trust or upon distribution to the holders of the Capital
Securities of the Junior Subordinated Debentures. The Guarantee does not place a
limitation on the amount of additional Senior Indebtedness that may be incurred
by the Company in the future. The Company expects from time to time to incur
additional indebtedness constituting Senior Indebtedness.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of a majority in Liquidation Amount of the Capital Securities will have
the right to direct the time, method and place of conducting any proceeding for
any remedy
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available to the Guarantee Trustee in respect of the Guarantee or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under the
Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity.
The Company, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
CERTAIN COVENANTS OF THE COMPANY
The Guarantee will provide that, so long as any Capital Securities remain
outstanding, if there shall have occurred any event that would constitute an
event of default under the Guarantee or the Declaration (other than solely a
default as described in paragraph (iii) under "Description of Junior Convertible
Subordinated Debentures -- Debenture Events of Default"), then the Company will
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock, (ii) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company (including
any Other Debentures) that rank pari passu with or junior in right of payment to
the Junior Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Company of any securities of any subsidiary of
the Company (including Other Guarantees) if such guarantee ranks pari passu with
or junior in right of payment to the Junior Subordinated Debentures, other than
(a) dividends or distributions in shares of or options, warrants or rights to
subscribe for or purchase shares of, Common Stock or preferred stock of the
Company, (b) any declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) as a direct result of, and only to the
extent required in order to avoid the issuance of fractional shares of capital
stock following a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (e) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (f) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers or employees or any of the Company's dividend
reinvestment plans.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of a majority of the Liquidation Amount of such outstanding Capital
Securities. The manner of obtaining any such approval will be as set forth under
"Description of Capital Securities -- Voting Rights; Amendment of the
Declaration." All guarantees and agreements contained in the Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the Capital
Securities then outstanding.
TERMINATION
The Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Capital Securities, upon
full payment of the Liquidation Amount payable upon liquidation of the Trust or
upon distribution of the Junior Subordinated Debentures to the holders of the
Capital Securities.
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The Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of the Capital Securities must restore payment
of any sums paid under the Capital Securities or the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Guarantee at the request of any holder of Capital
Securities, unless offered reasonable indemnity against the costs, expenses and
liabilities which might be incurred thereby. The Guarantee Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if it reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Trust has funds on hand legally available for the payment of
such Distributions) will be irrevocably guaranteed by the Company as and to the
extent set forth under "Description of the Guarantee." Taken together, the
Company's obligations under the Junior Subordinated Debentures, the Indenture,
the Declaration and the Guarantee will provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Capital Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. If and to the extent that the
Company does not make the required payments on the Junior Subordinated
Debentures, the Trust will not have sufficient funds to make the related
payments, including Distributions, on the Capital Securities. The Guarantee will
not cover any such payment when the Trust does not have sufficient funds on hand
legally available therefor. In such event, the remedy of a holder of Capital
Securities is to institute a Direct Action. The obligations of the Company under
the Guarantee will be subordinate and junior in right of payment to all Senior
Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
the Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debentures will be equal to the sum of the Liquidation Amount or
Redemption Price, as applicable, of the Capital Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on the
Junior Subordinated Debentures will match the Distribution rate and Distribution
and other payment dates for the Trust Securities; (iii) the Company shall pay
for all and any costs, expenses and liabilities of the Trust except the Trust's
obligations to holders of Trust Securities under such Trust Securities; and (iv)
the Declaration will provide that the Trust is not authorized to engage in any
activity that is not consistent with the limited purposes thereof.
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ENFORCEMENT OF RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Declaration. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Indenture will provide that no payments may be
made in respect of the Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on Junior Subordinated
Debentures would constitute an Event of Default under the Declaration.
LIMITED PURPOSE OF THE TRUST
The Capital Securities will represent preferred beneficial interests in
the Trust, and the Trust exists for the sole purpose of issuing and selling the
Trust Securities, using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures and engaging in only those other
activities necessary, advisable or incidental thereto.
RIGHTS UPON DISSOLUTION
Unless the Junior Subordinated Debentures are distributed to holders of
the Trust Securities, upon any voluntary or involuntary dissolution and
liquidation of the Trust, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, the holders of the Trust Securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities -- Liquidation of
the Trust and Distribution of Junior Subordinated Debentures." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Property
Trustee, as holder of the Junior Subordinated Debentures, would be a
subordinated creditor of the Company, subordinated in right of payment to all
Senior Indebtedness as set forth in the Indenture, but entitled to receive
payment in full of principal (and premium, if any) and interest, before any
stockholders of the Company receive payments or distributions. Since the Company
will be the guarantor under the Guarantee and will agree to pay for all costs,
expenses and liabilities of the Trust (other than the Trust's obligations to the
holders of its Trust Securities), the positions of a holder of Capital
Securities and a holder of Junior Subordinated Debentures relative to other
creditors and to stockholders of the Company in the event of liquidation or
bankruptcy of the Company are expected to be substantially the same.
DESCRIPTION OF NEW YORK BANCORP INC. CAPITAL STOCK
GENERAL
The Company's authorized capital stock consists of 30,000,000 shares of
Common Stock and 2,000,000 shares of preferred stock, par value $.01 per share
(the "Preferred Stock").
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COMMON STOCK
Subject to any prior rights of the Preferred Stock then outstanding,
holders of Common Stock are entitled to such dividends as may be declared from
time to time by the Company's Board of Directors (the "Company Board") out of
funds legally available therefor.
Each holder of Common Stock is entitled to one vote for each share owned
by him or her on all matters submitted to a vote of the stockholders of the
Company. Such shares are not entitled to any cumulative voting rights. In the
event of any liquidation, dissolution or winding up of the Company, the holders
of Common Stock are entitled to share equally and ratably in any assets
remaining after the payment of all debts and liabilities, subject to the prior
rights, if any, of holders of Preferred Stock. Holders of Common Stock have no
preemptive or other subscription or conversion rights. The Common Stock is not
subject to redemption and the outstanding shares are fully paid and
nonassessable.
The Common Stock is listed on the NYSE under the symbol "NYB." On
___________, 1997, the last reported sale price of the Common Stock on the NYSE
Composite Tape was $______ per share.
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PREFERRED STOCK
No shares of Preferred Stock are outstanding as of the date hereof. The
Company Board has the authority to issue shares of Preferred Stock in one or
more series and to fix the designation, powers, preferences and rights and
qualifications, limitations or restrictions thereon of any such series of
Preferred Stock.
CERTAIN ANTI-TAKEOVER PROVISIONS
This section sets forth a brief discussion of the reasons for, and the
operation and effects of, certain provisions of the Company's Certificate of
Incorporation (the "Company Certificate") and the Company's Bylaws (the "Company
Bylaws") which may have certain anti-takeover effects. This section also
summarizes certain provisions of federal law and Delaware law which may have
anti-takeover effects.
The Company Certificate and Bylaws
General. A number of provisions of the Company Certificate and Bylaws
pertain to matters of corporate governance and certain rights of stockholders.
Certain of those provisions may be deemed to have and may have the effect of
making more difficult, costly or time consuming, and thereby discouraging, a
merger, tender offer, proxy contest or other attempt to assume control of the
Company and/or change incumbent management and in certain circumstances may
prevent a change in control of the Company even if such a change in control is
desired by a majority of the Company's stockholders.
Authorized Shares of Capital Stock The Company Certificate permits the
Company Board to issue, without the approval of stockholders but subject to the
Company Board's fiduciary duties and the availability of authorized but unissued
shares, additional shares of Common Stock or shares of Preferred Stock. While
the availability of such shares provides the Company with flexibility in
structuring financings and acquisitions and meeting other corporate needs, it
may also, as more fully described below, impede the completion of a transaction
to which the Company Board or management is opposed.
Uncommitted authorized but unissued shares of Common Stock and Preferred
Stock may be issued from time to time to such persons and for such consideration
as the Company Board may determine and holders of the then-outstanding shares of
Common Stock or Preferred Stock may or may not be given the opportunity to vote
thereon, depending upon the nature of any such transactions, applicable law, the
rules and policies of the NYSE and the judgment of the Company Board regarding
the submission of such issuance to the Company's stockholders. The Company's
stockholders have no preemptive rights to subscribe to newly issued shares by
the Company.
Moreover, it is possible that additional shares of Common Stock or shares
of Preferred Stock may be issued for the purpose of making an acquisition by an
unwanted suitor of a controlling interest in the Company more difficult,
time-consuming or costly or to otherwise discourage an attempt to acquire
control of the Company. Under such circumstances, the availability of authorized
and unissued shares of Common Stock and Preferred Stock may make it more
difficult for the Company's stockholders to obtain a premium for their shares.
Such authorized and unissued shares could be used to create voting or other
impediments or to frustrate a person seeking to obtain control of the Company
through a merger, tender offer, proxy contest or other means. Such shares could
be privately placed with purchasers who might cooperate with the Company in
opposing such an attempt by a third party to gain control of the Company. The
issuance of shares of Common Stock or Preferred Stock could also be used to
dilute ownership of a person or entity seeking to obtain control of the Company.
Although the Company does not currently contemplate taking such action, shares
of Common Stock or one or more series of Preferred Stock could be issued for the
purposes and effects described above and the Company Board reserves its rights
to issue such stock for such purposes.
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Classified Board of Directors and Removal of Directors. The Company
Certificate states that the Company Board is to be divided into three classes,
which shall be as nearly equal in number as possible. The directors of the
Company in each class hold office for a term of three years. The Company
Certificate provides that a director may be removed only for cause and then only
by the affirmative vote of the holders of at least 80% of the voting power of
the then outstanding shares of capital stock of the Company entitled to vote
generally in the election of directors, voting together as a single class.
A classified board of directors could make it more difficult for
stockholders to force an immediate change in the composition of a majority of
the Company Board. Since the terms of approximately one-third of the incumbent
directors expire each year, at least two annual elections are necessary for the
stockholders to replace a majority of the board, whereas a majority of a
non-classified board may be replaced in one year.
Management of the Company believes that the staggered election of
directors helps to promote the continuity of management because approximately
one-third of the Company Board is subject to election each year. Staggered terms
help to assure that in the ordinary course of business approximately two-thirds
of the directors, or more, at any one time have had at least one year's
experience as directors, and moderate the pace of changes in the Company Board
by extending the minimum time required to elect a majority of directors from one
to two years.
Stockholder Vote Required to Approve Business Combinations with Principal
Stockholders. In connection with certain "Business Combinations" (as defined
below) and related transactions between the Company and an "Interested
Stockholder" (as defined below), the Company Certificate requires the approval
of the holders of at least 80% of the voting power of the then outstanding
shares of capital stock of the Company entitled to vote generally in the
election of directors, voting together as a single class, unless the transaction
is approved by the affirmative vote of at least a majority of the directors who
are not affiliated with the Interested Stockholder and who were directors at the
time the Interested Stockholder became such or unless certain fair price
criteria are met. The Company Certificate defines the term "Interested
Stockholder" generally to include any individual or entity which, together with
its affiliates, owns beneficially or controls, directly or indirectly, 10% or
more of the outstanding shares of voting stock of the Company.
The Company Certificate defines "Business Combination" as: (a) any merger
or consolidation of the Company or any of its subsidiaries with (i) any
Interested Stockholder or (ii) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation would
be, an affiliate of an Interested Stockholder; (b) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition (in one transaction or a series
of transactions) to or with any Interested Stockholder, or any affiliate of any
Interested Stockholder, of 25% or more of the combined assets of the Company and
its subsidiaries; (c) the issuance or transfer by the Company or any of its
subsidiaries (in one transaction or a series of transactions) of any securities
of the Company or any of its subsidiaries to any Interested Stockholder or any
affiliate of any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate fair market value
equalling or exceeding 25% of the combined assets of the Company and its
subsidiaries except pursuant to an employee benefit plan of the Company or any
of its subsidiaries; (d) the adoption of any plan or proposal for the
liquidation or dissolution of the Company proposed by or on behalf of any
Interested Stockholder; or (e) any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate shares of the outstanding shares of any class of equity or
convertible securities of the Company or any of its subsidiaries which is
directly or indirectly owned by any Interested Stockholder or any affiliate of
any Interested Stockholder.
Under Delaware law, absent such a supermajority voting provision, business
combinations, including mergers, consolidations and sales of substantially all
of the assets of the Company must be approved by the vote of the holders of a
majority of the outstanding shares of Common Stock, subject to certain
exceptions. See "- Delaware Law" below.
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The increased stockholder vote required to approve a Business Combination may
have the effect of foreclosing mergers and other business combinations which a
majority of stockholders deem desirable and may place the power to prevent such
a merger or combination in the hands of a minority of stockholders.
Provisions Relating to Meetings of Stockholders. The Company Certificate
and Bylaws provide that special meetings of stockholders may only be called by a
resolution of the Company Board adopted by a majority of the total number of
directors which the Company would have if there were no vacancies on the Company
Board (the "Whole Board"). The Company Certificate also provides that
stockholder action may be taken only at a special or an annual meeting of
stockholders and not by written consent. Although management of the Company
believes that these provisions will discourage stockholder attempts to disrupt
the business of the Company between annual meetings of stockholders, an
additional effect may be to deter hostile takeovers by making it more difficult
for a person or entity to obtain immediate control of the Company between annual
meetings. These provisions may also prevent stockholders from using a special
meeting as a forum to address certain other matters and may discourage takeovers
which are desired by stockholders.
Restriction of Maximum Number of Directors and Filling Vacancies on the
Company's Board of Directors. The Company Certificate provides that the number
of directors of the Company shall be fixed from time to time exclusively by the
Company Board pursuant to a resolution adopted by a majority of the Whole Board.
The power to fill vacancies, whether occurring by reason of an increase in the
number of directors or by resignation, is vested in the Company Board acting by
a vote of a majority of directors then in office, even if less than a quorum.
The ability of the Company Board to increase the size of the Company Board and
to fill vacancies resulting from newly created directorships could allow the
Company Board to retain control of the Company and to prevent a person or entity
from immediately acquiring control of the Company by creating new directorships
and filling the vacancies created thereby.
Advance Notice Requirements for Presentation of New Business and
Nominations of Directors at Meetings of Stockholders. The Company Bylaws
generally provide that any stockholder desiring to make a proposal for new
business at an annual meeting of stockholders must submit written notice which
must be received at the principal executive offices of the Company at least 30
days in advance of the meeting. In addition, the Company Bylaws do not permit
stockholders to make a proposal for new business at special meetings of
stockholders. The Company Bylaws also provide that stockholders wishing to
nominate candidates for election as directors must deliver written notice to the
secretary of the Company at least 30 days prior to the date of the annual
meeting of stockholders. Adequate advance notice of stockholder proposals and
nominations gives management time to evaluate such proposals and nominations and
to determine whether to recommend to the stockholders that such proposals be
adopted. In certain instances such provisions could make it more difficult to
oppose management's proposals or nominations if stockholders believe such
proposals or nominations are not in their best interests.
Supermajority Voting Requirement for Amendment of Certain Provisions of
the Company Certificate. The Company Certificate may be amended only if first
approved by at least a majority of the Whole Board at a duly constituted meeting
called expressly for that purpose and thereafter approved by the vote of the
holders of a majority of the outstanding shares of Common Stock, except that the
provisions of the Company Certificate governing (i) the Company's internal
affairs, (ii) calling special meetings, (iii) indemnification and (iv) approval
of Business Combinations must be approved by the affirmative vote of the holders
of at least 80% of the total votes eligible to be cast on such matters. This
provision is intended to prevent the holders of less than 80% of the outstanding
shares of the Company from circumventing any of the foregoing provisions by
amending the Company Certificate to delete or modify any one of such provisions.
This provision would enable the holders of more than 20% of the Company's voting
stock to prevent amendments to the Company Certificate even if they were favored
by the holders of a majority of the voting stock.
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Federal Law
Federal law provides that no person or company, directly or indirectly or
acting in concert with one or more persons or companies, or through one or more
subsidiaries, or through one or more transactions, may acquire "control" of a
savings association (which for these purposes includes a holding company
thereof) at any time without the prior approval of, or, in the case of
individuals, written notice to (and no objection by), the OTS. Any company that
acquires such control becomes a "savings and loan holding company" subject to
registration, examination and regulation as a savings and loan holding company.
Control of a savings association or any other company under federal statute
includes, generally, ownership of, control of or holding irrevocable proxies (or
any combination of irrevocable proxies and voting stock) representing more than
25% of any class of voting stock, control in any manner of the election of a
majority of the savings association's directors, or a determination by the OTS
(after notice and opportunity for a hearing) that the acquiror has the power to
direct, or directly or indirectly to exercise a controlling influence over, the
management or policies of the institution. Among other things, direct or
indirect acquisition of more than 10% of any class of a savings association's
voting stock, if the acquiror also is subject to any one of eight "control
factors," constitutes a rebuttable determination of control under the OTS
regulations. Such control factors include, among other things, the acquiror
being one of the two largest stockholders of any class of voting stock, holding
more than 25% of the total stockholders' equity and 35% of the combined debt
securities and stockholders' equity. The determination of control may be
rebutted by submission to the OTS, prior to the acquisition of stock or the
occurrence of any other circumstances giving rise to such determination, of a
statement setting forth facts and circumstances which would support a finding
that no control relationship will exist and containing certain undertakings.
Thus, any person or company that intends to acquire more than 25% of the Common
Stock, or that is subject to a "control factor" as described in the federal
regulations and intends to acquire more than 10% of the Common Stock, may need
to notify the OTS and seek prior approval, non-objection or acceptance of a
rebuttal statement.
Delaware Law
Section 203 of the Delaware General Corporation Law (the "DGCL") may have
the effect of significantly delaying a purchaser's acquisition of the entire
equity interest in the Company and, accordingly, could delay or discourage
certain takeover attempts. In general, Section 203 of the DGCL prevents an
"Interested Stockholder" (defined generally as a person holding 15% or more of a
corporation's outstanding voting stock) from engaging in a "Business
Combination" (defined to include a variety of transactions, including mergers,
as set forth below) with a Delaware corporation such as the Company for three
years following the date such person became an Interested Stockholder unless:
(i) before such person became an Interested Stockholder, the board of directors
of the corporation approved either the Business Combination or the transaction
in which the Interested Stockholder became an Interested Stockholder; (ii) upon
consummation of the transaction which resulted in the Interested Stockholder
becoming an Interested Stockholder, the Interested Stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding stock owned by directors who are also officers
and employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be
tendered); or (iii) following the transaction in which such person became an
Interested Stockholder, the Business Combination is (A) approved by the board of
directors of the corporation and (B) authorized at a meeting of stockholders by
the affirmative vote of the holders of 66 2/3% of the outstanding voting stock
of the corporation not owned by the Interested Stockholder. The restrictions
imposed on Interested Stockholders under DGCL Section 203 do not apply under
certain limited circumstances set forth therein, including certain Business
Combination proposed by an Interested Stockholder following the announcement or
notification of certain extraordinary transactions involving the corporation and
a person who had not been an Interested Stockholder during the previous three
years or who became an Interested Stockholder with the approval of a majority of
the corporation's directors.
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Section 203 of the DGCL provides that during such three-year period, the
corporation may not merge or consolidate with an Interested Stockholder or any
affiliate or associate thereof, and also may not engage in certain other
transactions with an Interested Stockholder or any affiliate or associate
thereof, including, without limitation, (i) any merger or consolidation of the
corporation or a direct or indirect majority-owned subsidiary of the corporation
with (A) the Interested Stockholder, or (B) with any other corporation if the
merger or consolidation is caused by the Interested Stockholder and as a result
of such merger or consolidation the above limitations of Section 203 are not
applicable to the surviving corporation; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition (except proportionately as a
stockholder of the corporation) to or with the Interested Stockholder of assets
having an aggregate market value equal to 10% or more of the aggregate market
value of all assets of the corporation determined on a consolidated basis or the
aggregate market value of all the outstanding stock of a corporation; (iii) any
transaction which results in the issuance or transfer by the corporation or by
any majority owned subsidiary thereof of any stock of the corporation or such
subsidiary to the Interested Stockholder, except, among other things, pursuant
to a transaction which effects a pro rata distribution to all stockholders of
the corporation; (iv) any transaction involving the corporation or any majority
owned subsidiary thereof which has the effect of increasing the proportionate
share of the stock of any class or series, or securities convertible into the
stock of any class or series, of the corporation or any such subsidiary which is
owned by the Interest Stockholder (except, among other things, as a result of
immaterial changes due to fractional share adjustments); or (v) any receipt by
the Interested Stockholder of the benefit (except proportionately as a
stockholder of such corporation) of any loans, advances, guarantees, pledges or
other financial benefits provided by or through the corporation.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain of the principal United States
Federal income tax consequences of the purchase, ownership and disposition of
the Capital Securities to a holder that is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized under
the laws of the United States or any state thereof or the District of Columbia
or an estate or trust the income of which is subject to United States Federal
income taxation regardless of source or a trust with respect to which a court
within the United States is able to exercise primary supervision over its
administration and one or more United States fiduciaries have the authority to
control all of its substantial decisions (a "U.S. Holder"). This summary does
not address the United States Federal income tax consequences to persons other
than U.S. Holders or to persons other than purchasers of Capital Securities upon
their initial issuance.
This summary is based on the United States Federal income tax laws,
regulations and rulings and decisions now in effect, all of which are subject to
change, possibly on a retroactive basis. This summary does not address the tax
consequences applicable to investors that may be subject to special tax rules
such as banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors or persons that will hold the Capital Securities as a position in a
"straddle," as part of a "synthetic security" or "hedge," "conversion
transaction" or other integrated investment or as other than a capital asset.
This summary also does not address the tax consequences to persons that have a
functional currency other than the U.S. dollar or the tax consequences to
shareholders, partners or beneficiaries of a holder of Capital Securities.
Further, it does not include any description of any alternative minimum tax
consequences or the tax laws of any state or local government or of any foreign
government that may be applicable to the Capital Securities.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS
IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES,
AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
The Company intends to take the position that, under current law, the
Junior Subordinated Debentures constitute indebtedness for federal income tax
purposes and, by acceptance of a Capital Security, each holder covenants to
treat the Junior Subordinated Debentures as indebtedness and the Capital
Securities as evidence of an
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indirect beneficial interest in the Junior Subordinated Debentures. No
assurances can be given, however, that such position of the Company will not be
challenged by the Internal Revenue Service (the "Service") or, if challenged,
that such challenge will not be successful. The remainder of this discussion
assumes that the Junior Subordinated Debentures are classified as indebtedness
for federal income tax purposes.
CLASSIFICATION OF THE TRUST
Upon the issuance of the Capital Securities, Weil, Gotshal & Manges LLP (a
limited liability partnership including professional corporations) will issue
its opinion (the "Tax Opinion") to the effect that, under then current law and
assuming full compliance with the terms of the Declaration (and certain other
documents), and based on certain facts and assumptions contained in such
opinion, the Trust will be classified, for United States Federal income tax
purposes, as a grantor trust and not as an association taxable as a corporation.
As a result, each holder of Capital Securities will be treated as owning an
undivided beneficial interest in the Junior Subordinated Debentures and each
holder will be required to include in its gross income the items of income
realized with respect to its allocable share of those Junior Subordinated
Debentures. Investors should be aware that the Tax Opinion does not address any
other issue and is not binding on the Service or the courts.
INTEREST, ORIGINAL ISSUE DISCOUNT, PREMIUM AND MARKET DISCOUNT
Final Treasury Regulations issued on June 16, 1996 generally provide that
stated interest on a debt instrument is not "qualified stated interest" and,
therefore, will give rise to OID unless such interest is unconditionally payable
in cash or in property (other than debt instruments of the issuer) at least
annually at a single fixed rate. Interest is considered to be unconditionally
payable only if reasonable legal remedies exist to compel timely payment or the
debt instrument otherwise provides terms and conditions that make the likelihood
of late payment (other than late payment that occurs within a reasonable grace
period) or non-payment a "remote contingency."
The Company has the right, at any time and from time to time during the
term of the Junior Subordinated Debentures, to defer payments of interest by
extending the interest payment period for a period not exceeding 20 consecutive
quarters, provided that no Extension Period may extend beyond the Stated
Maturity of the Junior Subordinated Debentures. During any Extension Period, the
Company may not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company (including any Other Debentures) that rank pari passu with or junior in
right of payment to the Junior Subordinated Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Company of any
securities of any subsidiary of the Company (including Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment to the Junior
Subordinated Debentures, other than (a) dividends or distributions in shares of
or options, warrants or rights to subscribe for or purchase shares of, Common
Stock or preferred stock of the Company, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) as a direct result of, and only to the extent required in order
to avoid the issuance of fractional shares of capital stock following, a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, (e) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of Common Stock related to the issuance of Common Stock or
rights under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans. See "Description
of Junior Convertible Subordinated Debentures -- Option to Extend Interest
Payment Date." The Company believes that the adverse impact that the imposition
of such restrictions would have on the Company and the value of its equity
securities makes the likelihood of its exercising its right to defer payments of
interest on the Junior Subordinated Debentures remote. Accordingly, the Company
believes, and this discussion assumes, that the stated interest on
54
<PAGE>
the Subordinated Debentures should be considered unconditionally payable and
that the Junior Subordinated Debentures should not be considered to have been
issued with OID. If so, stated interest paid or payable prior to the exercise,
if any, by the Company, of its right to defer interest payments, will be taxable
to a holder as ordinary interest income, generally at the time it is received or
accrued, in accordance with such holder's regular method of accounting for
federal income tax purposes. There can be no assurance that the Service will
agree with the Company's position.
Moreover, if, notwithstanding the foregoing, the Company does exercise its
right to defer payments of interest thereon, the Junior Subordinated Debentures
will be considered to be retired and reissued for their adjusted issue price at
such time, and the Junior Subordinated Debentures thereafter will be considered
to have been issued with OID. In such case, all the interest payments thereafter
payable will be treated as OID. If the payments were treated as OID (either
because the Company exercises the right to defer interest payments or because
the exercise of such right was not remote at the time of issuance), holders must
include that discount in income on an economic accrual basis before the receipt
of cash attributable to the interest, regardless of their method of tax
accounting and any holders who dispose of Capital Securities prior to the
Distribution Record Date for payment of Distributions thereon following such
Extension Period will include OID in gross income but will not receive any cash
related thereto from the Trust. The amount of OID that accrues in any quarterly
period will approximately equal the amount of the interest that accrues in that
period at the stated interest rate. In the event that the interest payment
period is extended, holders will accrue OID approximately equal to the amount of
the interest payment due at the end of the extended interest payment period on
an economic accrual basis over the length of the extended interest period.
Holders of Capital Securities will not be entitled to a dividends-received
deduction with respect to any income earned on the Capital Securities.
Holders of Capital Securities other than a holder who purchased the
Capital Securities upon original issuance may be considered to have acquired
their undivided interests in the Junior Subordinated Debentures with market
discount or acquisition premium, as such phrases are defined for United States
federal income tax purposes. Such holders are advised to consult their tax
advisors as to the income tax consequences of the acquisition, ownership and
disposition of Capital Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES UPON LIQUIDATION OF THE TRUST
As described under "Description of Capital Securities -- Liquidation of
the Trust and Distribution of Junior Subordinated Debentures," Junior
Subordinated Debentures may be distributed to holders in exchange for the
Capital Securities and in liquidation of the Trust. Under current law, such a
distribution would be treated as a non-taxable event to each holder and each
holder's aggregate tax basis in the Junior Subordinated Debentures would be
equal to such holder's aggregate tax basis in its Capital Securities. A holder's
holding period in the Junior Subordinated Debentures so received in liquidation
of the Trust would include the period for which the Capital Securities were held
by such holder. If, however, the liquidation of the Trust were to occur because
the Trust is subject to United States Federal income tax with respect to income
accrued or received on the Junior Subordinated Debentures, the distribution of
Junior Subordinated Debentures to the holders of Capital Securities by the Trust
would be a taxable event to the Trust and a holder of Capital Securities would
recognize gain or loss as if such holder had exchanged its Capital Securities
for the Junior Subordinated Debentures it received upon the liquidation of the
Trust. A holder will be taxable on OID (if any) in respect of Junior
Subordinated Debentures received from the Trust in the manner described above
under " -- Interest, Original Issue Discount, Premium and Market Discount."
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<PAGE>
SALE OR REDEMPTION OF CAPITAL SECURITIES
A holder that sells Capital Securities (including a redemption for cash)
will recognize gain or loss equal to the difference between the amount realized
on the sale (other than amounts attributable to accrued but unpaid interest
which has not yet been included in income, which will be treated as ordinary
income) and its adjusted tax basis in the securities sold or redeemed. A
holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price increased by OID (if any) previously includible in such
holder's gross income to the date of disposition (and the accrual of market
discount, if any, if an election to accrue market discount in income currently
is made) and decreased by payments received on the Capital Securities. Except to
the extent noted above and subject to the market discount rules of the Internal
Revenue Code of 1986, as amended (the "Code"), any such gain or loss generally
will be short-term, mid-term or long-term capital gain or loss depending on the
length of time the Capital Securities were held.
The Capital Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder who uses the accrual method of accounting (and
a cash method holder, during an Extension Period or if the Junior Subordinated
Debentures are deemed to have been issued with OID) and who disposes of its
Capital Securities between Distribution Record Dates will be required to include
accrued but unpaid interest (or OID) on the Junior Subordinated Debentures
through the date of disposition in income as ordinary income (i.e., OID), and to
add such amount to its adjusted tax basis in its Capital Securities disposed of.
To the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest or OID) is less than such holder's adjusted tax
basis (which will include all accrued but unpaid interest as OID), a holder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States Federal income tax
purposes.
CONVERSION OF CAPITAL SECURITIES
A holder of Capital Securities generally will not recognize income, gain
or loss upon the conversion, through the Conversion Agent, of its Capital
Securities into Common Stock. A holder will, however, recognize gain upon the
receipt of cash in lieu of a fractional share of Common Stock equal to the
amount of cash received less the holder's tax basis in such fractional share. A
holder's tax basis in the Common Stock received upon exchange and conversion
will generally be equal to the holder's tax basis in the Capital Securities
delivered to the Conversion Agent for exchange less that basis allocated to any
fractional share for which cash is received, and a holder's holding period in
the Common Stock received upon exchange and conversion will generally begin on
the date the holder acquired the Capital Securities delivered to the Conversion
Agent for exchange.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Capital Securities as having received a constructive distribution
from the Company in the event the Conversion Price of the Junior Subordinated
Debentures were adjusted if (i) as a result of such adjustment, the
proportionate interest (measured by the quantum of Common Stock into or for
which the Junior Subordinated Debentures are convertible or exchangeable) of the
holders of the Capital Securities in the assets or earnings and profits of the
Company were increased, and (ii) the adjustment was not made pursuant to a bona
fide, reasonable antidilution formula. An adjustment in the Conversion Price
would not be considered made pursuant to such a formula if the adjustment was
made to compensate for certain taxable distributions with respect to the Common
Stock. Thus, under certain circumstances, a reduction in the Conversion Price
for the holders may result in deemed dividend income to holders to the extent of
the current or accumulated earnings and profits of the Company. Holders of the
Capital Securities would be required to include their allocable share of such
deemed dividend income in gross income but would not receive any cash related
thereto.
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BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Subject to the qualifications discussed below, income on the Capital
Securities will be reported to holders on Forms 1099, which forms are expected
to be mailed to holders of Capital Securities by January 31 following each
calendar year.
The Trust will be obligated to report annually to the holders of record of
the Capital Securities, the interest (or OID) related to the Junior Subordinated
Debentures for that year. The Trust currently intends to report such information
on Form 1099 prior to January 31 following each calendar year even though the
Trust is not legally required to report to record holders until April 15
following each calendar year. Under current law, holders of Capital Securities
who hold as nominees for beneficial holders will not have any obligation to
report information regarding the beneficial holders to the Trust. The Trust,
moreover, will not have any obligation to report to beneficial holders who are
not also record holders.
Payments made on, and proceeds from the sale of, the Capital Securities
may be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification requirements. Any withheld amounts will be allowed
as a credit against the holder's Federal income tax liability, provided the
required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER THE
ALTERNATIVE MINIMUM TAX AND THE STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE
POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Company, the obligor with respect to the Junior Subordinated
Debentures held by the Trust and the Guarantee, the Issuer Trustees and the
Guarantee Trustee may from time to time provide services directly or through
subsidiaries to many employee benefit plans within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
individual retirement accounts or other plans within the meaning of Section 4975
of the Code, or persons which are treated as using assets of such employee
benefit plans, accounts or plans (collectively, "Plans"). As a result, the
Company, the Issuer Trustees and the Guarantee Trustee may each be considered a
"party in interest" or a "disqualified person" (as defined in ERISA or Section
4975 of the Code, respectively) to which the prohibited transaction provisions
of ERISA or Section 4975 of the Code apply. Any loan or other extension of
credit between the Company and any Plan with respect to which the Company is a
party in interest or disqualified person may constitute a prohibited transaction
unless a statutory or administrative exemption applies. Accordingly, any
purchaser proposing to acquire Capital Securities with assets of any Plan should
consult with its counsel, particularly with respect to the applicability of such
prohibited transaction provisions, and no Plan should acquire or hold any
Capital Securities unless one of the following exemptions from such provisions
applies: Prohibited Transaction Class Exemption ("PTCE") 84-14 (an exemption for
certain transactions determined by an independent qualified professional asset
manager), PTCE 90-1 (an exemption for certain transactions involving insurance
company pooled separate accounts), PTCE 91-38 (an exemption for certain
transactions involving bank collective investment funds), PTCE 95-60 (an
exemption for transactions involving certain insurance company general accounts)
or PTCE 96-23 (an exception for certain transactions determined by an in-house
asset manager). In particular, to avoid the occurrence of a non-exempt
prohibited transaction, no individual retirement account as to which the
beneficiary directs the investment thereof and the Company serves as custodian
should acquire or hold any Capital Securities pursuant to the investment
direction of the beneficiary.
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In addition, a Plan fiduciary considering the purchase of Capital
Securities should be aware that the assets of the Trust may be considered "plan
assets" of Plans holding Capital Securities for purposes of ERISA and Section
4975 of the Code. In such event, service providers with respect to the assets of
the Trust may become parties in interest or disqualified persons with respect to
investing Plans, and any discretionary authority exercised with respect to the
Junior Subordinated Debentures by such persons could be deemed to constitute or
give rise to a prohibited transaction under ERISA or the Code. In order to avoid
such prohibited transactions, each investing Plan, by purchasing the Capital
Securities, will be deemed to have directed the Trust to invest in the Junior
Subordinated Debentures, to enter into the Guarantee and to have appointed the
Issuer Trustees.
A fiduciary with respect to a Plan subject to ERISA (excludes individual
retirement accounts) should consider whether the purchase of Capital Securities
could result in a delegation of fiduciary authority to the Property Trustee,
and, if so, whether such a delegation of authority is permissible under the
Plan's governing instrument or any investment management agreement with the
Plan. In making such determination, a Plan fiduciary should note that the
Property Trustee is a U.S. bank qualified to be an investment manager (within
the meaning of section 3(38) of ERISA) to which such delegation of authority
generally would be permissible under ERISA. Further, prior to an Event of
Default with respect to the Junior Subordinated Debentures, the Property Trustee
will have only limited custodial and ministerial authority with respect to Trust
assets.
Each fiduciary with respect to a Plan who is responsible for the
acquisition of Capital Securities by such Plan shall be deemed to have
represented and warranted for the benefit of the Company, the Issuer Trustees
and the Guarantee Trustee that the acquisition and holding of Capital Securities
by such Plan does not result in or give rise to a non-exempt prohibited
transaction by reason of the application of one or more of PTCE 84-14, 90-1, 91-
38, 95-60 or 96-23.
THE OFFERINGS
Up to 2,000,000 Capital Securities are being offered for sale in the
Subscription Offering, as described below, to Eligible Subscribers, who are the
holders of record of the Common Stock of the Company as of the close of business
on __________, 1997, the date chosen by the Company's Board of Directors as the
record date for purposes of determining stockholders eligible to receive notice
of and participate in the Subscription Offering (the "Subscription Offering
Record Date"). All Capital Securities offered in the Subscription Offering and
not sold to Eligible Subscribers in accordance with the procedures described
below will be offered in the Public Offering by the Underwriter. See " -- The
Public Offering" below.
THE SUBSCRIPTION OFFERING
Nontransferable Subscription Rights to purchase up to 2,000,000 Capital
Securities are being issued pursuant to this Prospectus at no cost to all
Eligible Subscribers. The Subscription Rights are nontransferable. No person is
required to subscribe for any Capital Securities in the Subscription Offering.
The Company reserves the right to terminate the Subscription Offering at any
time for any reason on or prior to the Subscription Offering Expiration Date by
notice to that effect delivered to the Sales Agent.
SUBSCRIPTIONS FOR CAPITAL SECURITIES
Holders of Subscription Rights may subscribe for Capital Securities by
properly completing and signing the Subscription Order Form mailed to the
Eligible Subscribers together with this Prospectus and by delivering it to the
Sales Agent, or by mailing it in the postage-paid return envelope accompanying
this Prospectus, accompanied by full payment for the subscribed Capital
Securities (including with respect to Capital Securities sought to be purchased
pursuant to the exercise of Excess Subscription Rights).
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Fully completed and executed Subscription Order Forms, together with full
payment for the subscribed-for Capital Securities, must be received by 5:00 p.m.
(New York City time) on the Subscription Offering Expiration Date. Payment for
the subscribed Capital Securities (including those relating to a subscriber's
Pro Rata Subscription Right and Excess Subscription Rights) must be made in cash
(if delivered in person), by check or money order. The failure of the Sales
Agent to receive from any Eligible Subscriber for any reason a properly
completed and executed Subscription Order Form, accompanied by full payment, by
the Subscription Offering Expiration Date, will be deemed a waiver and release
by such person of all Subscription Rights held. A Subscription Order Form, once
received by the Sales Agent, is irrevocable and cannot be amended, modified or
rescinded by the Eligible Subscriber without the consent of the Company and the
Trust, which consent may be withheld for any or no reason in the sole discretion
of the Company and the Trust. The Company and the Trust may, but are not
required to, waive any irregularities in any Subscription Order Form or require
the submission of a corrected Subscription Order Form or the remittance of full
payment for subscribed Capital Securities by such date as the Company and the
Trust may specify.
The Subscription Rights will entitle each Eligible Subscriber to purchase
at least the same percentage of the Capital Securities offered in the
Subscription Offering as the percentage of the outstanding shares of Common
Stock owned of record by the Eligible Subscriber as of the Subscription Offering
Record Date (such entitlement being referred to as an Eligible Subscriber's "Pro
Rata Subscription Right"). Based on the number of shares of Common Stock
outstanding on June 30, 1997, an Eligible Subscriber would be entitled to
purchase pursuant to his Pro Rata Subscription Right .0926 of a Capital Security
for each share of Common Stock held as of such date. Each Eligible Subscriber
also is being given the opportunity to indicate on the Subscription Order Form
whether such Eligible Subscriber wishes to purchase, in the event the
Subscription Offering is not fully subscribed pursuant to the Pro Rata
Subscription Rights, Capital Securities in excess of those allotted to him
pursuant to his Pro Rata Subscription Rights and the maximum amount of such
excess Capital Securities such Eligible Subscriber seeks to purchase (the
"Excess Subscription Rights"). In the event the exercise of the Excess
Subscription Rights results in the Subscription Offering being oversubscribed,
then the number of Capital Securities sought to be purchased by each Eligible
Subscriber exercising Excess Subscription Rights will be reduced and will equal
the product of (i) such number of excess Capital Securities sought to be
purchased by such Eligible Subscriber and (ii) a fraction, the numerator of
which is the number of outstanding shares of Common Stock owned of record by
such Eligible Subscriber as of the Subscription Offering Record Date and the
denominator of which is the aggregate number of outstanding shares of Common
Stock owned of record by all Eligible Subscribers who elect to exercise Excess
Subscription Rights as of the Subscription Offering Record Date. The Sales Agent
will have the authority to determine the amount of Capital Securities each
Eligible Subscriber is entitled to purchase pursuant to the foregoing procedures
using such methods (such as rounding) as it determines to be appropriate.
Certain directors and executive officers of the Company owning in the
aggregate approximately 24% of the Common Stock have informed the Company that
they presently intend to exercise their Pro Rata Subscription Rights and also
may exercise Excess Subscription Rights.
Refunds to Eligible Subscribers in the Subscription Offering will be
remitted (a) in lieu of the issuance of fractional Capital Securities, (b) in
the event of an oversubscription in the Subscription Offering and (c) in the
event the Subscription Offering is terminated. Under no circumstances will
interest be paid on funds delivered as payment for the Capital Securities. Any
refunds due to Eligible Subscribers on funds remitted will be mailed to each
Eligible Subscriber at the address designated on the Subscription Order Form
promptly after the expiration or termination of the Subscription Offering.
The Subscription Offering is not conditioned upon the sale of a minimum
Liquidation Amount of the Capital Securities and, further, is not conditioned
upon the completion of the Public Offering. The Subscription Offering may be
terminated at any time and for any reason in the sole discretion of the Company,
prior to the completion of the Subscription Offering. In the event the
Subscription Offering is terminated, refunds of the payments made for
subscribed-for Capital Securities will be remitted and mailed to each Eligible
Subscriber at the address designated on the Subscription Order Form promptly
after the termination of the Subscription Offering.
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The Company has retained the services of the Sales Agent in connection
with the Subscription Offering. The Sales Agent, among other things, will assist
in responding to inquiries from Eligible Subscribers concerning the procedures
of the Subscription Offering and will maintain records regarding subscriptions
for the Capital Securities.
For its services, the Company has agreed to pay the Sales Agent a fee in
the amount of __________. The Company also has agreed to indemnify the Sales
Agent under certain circumstances against certain liabilities and expenses,
including liabilities under the Securities Act. The Company also has agreed to
pay the Underwriter a financial advisory fee in an amount equal to ____% of the
aggregate Liquidation Amount of Capital Securities sold in the Subscription
Offering.
The Information Agent for the Subscription Offering is Beacon Hill
Partners, Inc. Eligible Subscribers should contact the Information Agent with
any questions or if they need additional copies of this Prospectus or any other
document at 1-800-854-9486.
THE PUBLIC OFFERING
All Capital Securities unsold in the Subscription Offering will be offered
to the public in the Public Offering by the Underwriter. The Public Offering
will be made by means of a separate prospectus (the "Public Offering
Prospectus") which will be filed as part of a post-effective amendment to the
Registration Statement of which this Prospectus is a part. The price for the
Capital Securities in the Public Offering will be the same as in the
Subscription Offering.
For its services, the Company has agreed to pay the Underwriter a fee in
an amount equal to ___% of the aggregate Liquidation Amount of Capital
Securities sold in the Public Offering. The Company also has agreed to indemnify
the Underwriter and certain other persons under certain circumstances against
certain liabilities and expenses, including liabilities under the Securities Act
and will contribute payments the Underwriter may be required to make in respect
thereof.
The Company has agreed, subject to certain exceptions, not to sell any
Common Stock or Capital Securities within 120 days from the date of the
commencement of the Public Offering without the written consent of the
Underwriter.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Capital
Securities will be passed upon on behalf of the Company and the Trust by
Richards, Layton & Finger P.A., special Delaware counsel to the Company and the
Trust. The validity under New York law of the Junior Subordinated Debentures and
the Guarantee will be passed upon for the Company and the Trust by Weil, Gotshal
& Manges LLP (a limited liability partnership including professional
corporations), New York, New York. Certain legal matters will be passed upon for
the Underwriter by Alston & Bird LLP, Washington, D.C. Weil, Gotshal & Manges
LLP will rely on Richards, Layton & Finger P.A. as to certain matters of
Delaware law.
EXPERTS
The consolidated financial statements of the Company as of September 30,
1996 and 1995 and for each of the years in the three-year period ended September
30, 1996, have been incorporated by reference herein and in this registration
statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
60
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<TABLE>
<CAPTION>
============================================== ======================================================
<S> <C>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL NEW YORK BANCORP
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION CAPITAL TRUST
OR TO MAKE ANY REPRESENTATIONS OTHER THAN
CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS IN CONNECTION WITH THE OFFER
MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN 2,000,000
AUTHORIZED BY NEW YORK BANCORP INC., NEW
YORK BANCORP CAPITAL TRUST, THE SALES AGENT
OR THE UNDERWRITER. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE
CREATE AN IMPLICATION THAT THERE HAS NOT 8.00% CONVERTIBLE TRUST PREFERRED
BEEN ANY CHANGE IN THE AFFAIRS OF NEW YORK SECURITIES
BANCORP INC. OR NEW YORK BANCORP CAPITAL
TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS FULLY AND UNCONDITIONALLY GUARANTEED,
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION THE EXTENT SET FORTH HEREIN, BY
BY ANYONE IN ANY STATE IN WHICH SUCH OFFER
OR SOLICITATIONIS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER IS NOT QUALIFIED NEW YORK BANCORP INC.
TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PAGE
----
Available Information................ PROSPECTUS
Incorporation of Certain Documents by
Reference..........................
Prospectus Summary...................
Risk Factors.........................
New York Bancorp Inc.................
Use of Proceeds......................
Ratios of Earnings to Fixed Charges..
Capitalization.......................
Selected Consolidated Financial and
Other Data ........................
The Trust............................
Description of Capital Securities.... ___________, 1997
Description of Junior Convertible
Subordinated Debentures............
Description of the Guarantee.........
Relationship Among the Capital Securities,
the Junior Subordinated Debentures
and the Guarantee..................
Description of New York Bancorp
Inc. Capital Stock.................
Certain Federal Income Tax Considerations
ERISA Considerations.................
The Offerings........................
Legal Matters........................
Experts..............................
============================================== ======================================================
</TABLE>
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated amounts of the expenses of and related to the Offerings are
as follows:
Registration Fee -- Securities and Exchange Commission...... $15,152
NASD Fee.................................................... *
Printing and engraving expenses............................. *
Accounting fees and expenses................................ *
Legal fees and expenses..................................... *
Trustees' fees and expenses................................. *
NYSE Fee.................................................... *
Miscellaneous............................................... $ *
-----------
Total....................................................... $ *
- -------------------------------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Certificate of Incorporation of the Company (the "Company
Certificate") provides, as permitted be Section 102(b)(7) of the Delaware
General Corporation Law (the "DGCL"), that a director of the Company shall not
be personally liable to the Company or its stockholders for monetary damages for
breach of a fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Company Certificate further provides that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative ("Proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such Proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Company to the fullest extent authorized by
the DGCL, against all expenses, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that the
Company shall indemnify any such person seeking indemnity in connection with a
Proceeding (or part thereof) initiated by such person only if such Proceeding
(or part thereof) was authorized by the Company's Board of Directors.
Section 145 of the DGCL empowers a Delaware corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
II-1
NYFS10...:\81\65281\0001\1819\REG8157R.28D
<PAGE>
right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of such corporation or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise. Such
indemnification may include expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding, provided that such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe such
person's conduct was unlawful. A Delaware corporation is permitted to indemnify
directors, officers, employees and other agents of such corporation in an action
by or in the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the person to be
indemnified has been adjudged to be liable to the corporation. Where a director,
officer, employee or agent of the corporation is successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to above or
in defense of any claim, issue or matter therein, the corporation must indemnify
such person against the expenses (including attorneys' fees) which he or she
actually and reasonably incurred in connection therewith.
ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1.1 Form of Underwriting Agreement.*
4.1 Restated Certificate of Incorporation of the Company. (1)
4.2 Bylaws of the Company, as amended. (2)
4.3 Certificate of Trust of New York Bancorp Capital Trust (the "Trust"),
dated August 28, 1997.
4.4 Amended and Restated Declaration of Trust of the Trust, among the Company,
as sponsor, the Administrators party thereto, The Bank of New York
(Delaware), as Delaware Trustee, The Bank of New York, as Property Trustee
and the holders from time to time of undivided interests in the assets of
the Trust.*
4.5 Indenture, between the Company and The Bank of New York, as Trustee.*
4.6 Form of Capital Security Certificate (included in the Declaration filed as
Exhibit 4.5 to this Registration Statement).*
4.7 Form of Junior Subordinated Debenture (included in the Indenture filed as
Exhibit 4.6 to this Registration Statement).*
4.8 Capital Securities Guarantee Agreement, between the Company and The Bank
of New York, as Guarantee Trustee.*
4.9 Subscription Order Form.*
5.1 Opinion of Richards, Layton & Finger P.A. as to validity of the Capital
Securities.*
5.2 Opinion of Weil, Gotshal & Manges LLP as to validity of the Junior
Subordinated Debentures and the Guarantee to be issued by the Company.*
8.1 Opinion of Weil, Gotshal & Manges LLP as to certain federal income tax
matters.*
12.1 Statement of Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of KPMG Peat Marwick LLP, independent public accountants for the
Company.
23.2 Consent of Richards, Layton & Finger P.A. (included in the opinion filed
as Exhibit 5.1 to this Registration Statement).*
23.3 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as
Exhibit 5.2 to this Registration Statement).*
23.4 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as
Exhibit 8 to this Registration Statement).*
24.1 Powers of Attorney (included on signature page of this Part II).
II-2
<PAGE>
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Declaration.*
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Indenture.*
25.3 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Guarantee.*
99.1 Form of Letter to Stockholders.
- -------------------------------
* To be filed by amendment.
(1) Previously filed as Exhibit 3.1 to the Company's Annual Report on Form
10-K for the year ended September 30, 1996 and incorporated herein by
reference.
(2) Previously filed as Exhibit 3 to the Company's Annual Report on Form 10-K
for the year ended September 30, 1992 and incorporated herein by
reference.
ITEM 17. UNDERTAKINGS.
(a) The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, as amended (the "Securities
Act"), each filing of the Company's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(c) The Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that if has reasonable grounds to believe that it meets all
the requirements for Filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Douglaston, State of New York, on this 28th day of
August 1997.
NEW YORK BANCORP INC.
By: /s/ Michael A. McManus, Jr.
----------------------------------
Michael A. McManus, Jr.
President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael A. McManus, Jr. and Stan I.
Cohen, and each of them, with full power to act without the other, such person's
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for such person and in such person's name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or either of them, or their or such person's
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Company and in the capacities indicated, on the date set forth above.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Patrick E. Malloy, III Chairman of the Board August 28, 1997
- --------------------------------
Patrick E. Malloy, III
/s/ Michael A. McManus, Jr. President and Chief Executive Officer August 28, 1997
- --------------------------------
Michael A. McManus, Jr.
/s/ Stan I. Cohen Senior Vice President, Controller, August 28, 1997
- -------------------------------- Secretary and Director (principal
Stan I. Cohen financial and accounting officer)
/s/ Josiah T. Austin Director August 28, 1997
- --------------------------------
Josiah T. Austin
II-4
<PAGE>
/s/ Geraldine A. Ferraro Director August 28, 1997
- --------------------------------
Geraldine A. Ferraro
/s/ Peter D. Goodson Director August 28, 1997
- --------------------------------
Peter D. Goodson
/s/ John E.D. Grunow Director August 28, 1997
- --------------------------------
John E.D. Grunow
/s/ Walter R. Ruddy Director August 28, 1997
- --------------------------------
Walter R. Ruddy
/s/ Gene A. Washington Director August 28, 1997
- --------------------------------
Gene A. Washington
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, New York
Bancorp Capital Trust certifies that if has reasonable grounds to believe that
it meets all the requirements for Filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Douglaston, State of New York on this 28th day
of August 1997.
NEW YORK BANCORP CAPITAL TRUST
By: NEW YORK BANCORP INC.,
as Sponsor
By: /s/ Michael A. McManus, Jr.
-----------------------------------------
Michael A. McManus, Jr.
President and Chief Executive Officer
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
1.1 Form of Underwriting Agreement.*
4.1 Restated Certificate of Incorporation of the Company. (1)
4.2 Bylaws of the Company, as amended. (2)
4.3 Certificate of Trust of New York Bancorp Capital Trust (the
"Trust"), dated August 28, 1997.
4.4 Amended and Restated Declaration of Trust of the Trust,
among the Company, as sponsor, the Administrators party
thereto, The Bank of New York (Delaware), as Delaware
Trustee, The Bank of New York, as Property Trustee and the
holders from time to time of undivided interests in the
assets of the Trust.*
4.5 Indenture, between the Company and The Bank of New York, as
Trustee.*
4.6 Form of Capital Security Certificate (included in the
Declaration filed as Exhibit 4.5 to this Registration
Statement).*
4.7 Form of Junior Subordinated Debenture (included in the
Indenture filed as Exhibit 4.6 to this Registration
Statement).*
4.8 Capital Securities Guarantee Agreement, between the Company
and The Bank of New York, as Guarantee Trustee.*
4.9 Subscription Order Form.*
5.1 Opinion of Richards, Layton & Finger P.A. as to validity of
the Capital Securities.*
5.2 Opinion of Weil, Gotshal & Manges LLP as to validity of the
Junior Subordinated Debentures and the Guarantee to be
issued by the Company.*
8.1 Opinion of Weil, Gotshal & Manges LLP as to certain federal
income tax matters.*
12.1 Statement of Computation of Ratios of Earnings to Fixed
Charges.
23.1 Consent of KPMG Peat Marwick LLP, independent public
accountants for the Company.
23.2 Consent of Richards, Layton & Finger P.A. (included in the
opinion filed as Exhibit 5.1 to this Registration
Statement).*
23.3 Consent of Weil, Gotshal & Manges LLP (included in the
opinion filed as Exhibit 5.2 to this Registration
Statement).*
23.4 Consent of Weil, Gotshal & Manges LLP (included in the
opinion filed as Exhibit 8 to this Registration Statement).*
24.1 Powers of Attorney (included on signature page of this Part
II).
25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Declaration.*
25.2 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture.*
25.3 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Guarantee.*
99.1 Form of Letter to Stockholders.
- -------------------------------
* To be filed by amendment.
(1)Previously filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K
for the year ended September 30, 1996 and incorporated herein by reference.
(2)Previously filed as Exhibit 3 to the Company's Annual Report on Form 10-K for
the year ended September 30, 1992 and incorporated herein by reference.
II-7
EXHIBIT 4.3
CERTIFICATE OF TRUST
OF
NEW YORK BANCORP CAPITAL TRUST
THIS Certificate of Trust of New York Bancorp Capital Trust (the
"Trust"), dated as of August 28, 1997, is being duly executed and filed by the
undersigned, as trustees, to create a business trust under the Delaware Business
Trust Act (12 Del. C. ss. 3801, et seq.).
1. Name: The name of the business trust created hereby is New York
Bancorp Capital Trust.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Newcastle
County, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK (DELAWARE), not in its
individual capacity but solely as trustee
of the Trust
By: /s/ Mary Jane Morrissey
--------------------------------------
Name: Mary Jane Morrissey
Title: Authorized Signatory
THE BANK OF NEW YORK, not in its
individual capacity but solely as trustee
of the Trust
By: /s/ Timothy J. Shea
--------------------------------------
Name: Timothy J. Shea
Title: Assistant Treasurer
/s/ Stan I. Cohen
--------------------------------------
STAN I. COHEN, not in his individual
capacity but solely as initial
trustee of the Trust
NYFS10...:\81\65281\0001\1819\CRT8157R.44A
EXHIBIT 12.1
NEW YORK BANCORP INC.
STATEMENT OF COMPUTATION OF RATIOS OF
EARNINGS TO FIXED CHARGES
NINE MONTHS ENDED YEAR ENDED
JUNE 30, SEPTEMBER 30,
1997 1996 1996 1995(1) 1994 1993 1992
---- ---- ---- ------- ---- ---- ----
Ratio of Earnings
to Fixed Charges:
Excluding interest
on deposits 2.36x 2.41x 2.21x 1.78x 3.09x 4.25x 2.33x
Including interest
on deposits 1.72x 1.60x 1.53x 1.31x 1.61x 1.64x 1.39x
- ----------------------
1. The decline in the ratio of earnings to fixed charges for the year ended
September 30, 1995 is primarily attributable to certain non-recurring
merger-related and restructuring expenses of approximately $19.0 million
incurred by the Company in connection with the acquisition of Hamilton Bancorp,
Inc.
NYFS10...:\81\65281\0001\1773\CHT8267S.450
EXHIBIT 23.1
CONSENT OF INDEPENDANT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
The Board of Directors of
New York Bancorp, Inc.
We consent to the incorporation by reference in the registration statement on
Form S-3 of New York Bancorp Inc. of our report dated October 29, 1996, related
to the consolidated statement of financial condition of New York Bancorp Inc. as
of September 30, 1996 and 1995, and the related consolidated statements of
income, changes in shareholders' equity and cash flows for each of the years in
the three-year period ended September 30, 1996, which report is included in the
1996 Annual Report to Shareholders of New York Bancorp Inc. and has been
incorporated by reference in the September 30, 1996 Annual Report on Form 10-K
of New York Bancorp Inc., and to the reference to our firm under the headings
"Selected Consolidated Financial and Other Data" and "Experts" in the
registration statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Jericho, New York
August 28, 1997
EXHIBIT 99
[LETTERHEAD OF NEW YORK BANCORP INC.]
, 1997
Dear Fellow Stockholder:
We are writing to inform you of an opportunity that is being made
available to the New York Bancorp Inc.
stockholders.
New York Bancorp has determined to raise capital through the sale of
a security of a trust recently established by the Company known as "New York
Bancorp Capital Trust." New York Bancorp will guarantee all of the trust's
obligations under these newly-issued securities. The trust structure is being
used because it allows your Company to raise funds on a low-cost basis. The
proceeds of the sale of the trust securities will be available to the Company
and Home Federal Savings Bank to support management's continuing programs for
enhancing the value of your New York Bancorp common stock.
The Company is seeking to sell $50 million of the new trust
securities. Your Board of Directors has determined to make the securities first
available to New York Bancorp stockholders through a subscription offering. By
participating in the subscription offering, you will be able to purchase trust
securities at their initial offering price and avoid paying any sales
commission. Any trust securities not purchased by the New York Bancorp
stockholders in the subscription offering will be offered to the public through
Keefe, Bruyette & Woods, Inc.
We and certain of the other directors and officers of the Company
who own in the aggregate approximately 24% of the Company's common stock intend
to exercise our subscription rights and purchase trust securities in the
subscription offering.
The trust securities will pay a dividend of 8% per annum. The trust
securities also will be convertible at the option of the holder into New York
Bancorp common stock at a price which will represent 110% of the market price of
the common stock at the conclusion of the subscription offering or at the time
Keefe, Bruyette & Woods, Inc. sells the trust
NYFS10...:\81\65281\0001\139\LTR8217J.440
<PAGE>
, 1997
Page 2
securities to the public. Thus, the trust securities will provide holders with
annual income and the potential for appreciation in value if the New York
Bancorp common stock performs well and trades above the conversion price in the
future.
YOU SHOULD BE AWARE THAT AN INVESTMENT IN THE TRUST SECURITIES DOES
INVOLVE SOME RISKS. THIS LETTER DOES NOT SET FORTH THE INFORMATION NECESSARY FOR
YOU TO MAKE AN INFORMED INVESTMENT DECISION AND YOU ARE URGED TO READ THE
ENCLOSED SUBSCRIPTION OFFERING PROSPECTUS FOR A COMPLETE DESCRIPTION OF THE
SUBSCRIPTION OFFERING, THE TRUST SECURITIES, RISK FACTORS AND RELATED MATTERS.
To participate and purchase trust securities, fully completed and
executed Subscription Order Forms, together with full payment for the
subscribed-for trust securities, must be received by ____________ by 5:00 p.m.
(New York City time) on __________, 1997, unless extended in the sole discretion
of the Company.
Should you have any questions concerning the subscription offering,
you should contact Beacon Hill Partners, our information agent, at 1 (800)
854-9486.
Thank you in advance for your continuing support and interest in New
York Bancorp.
Very truly yours,
Patrick E. Malloy, III Michael A. McManus, Jr.
This letter does not constitute an offer to sell, nor a solicitation
of an offer to buy, trust securities. Such offers may only be made by the
Prospectus of New York Bancorp and New York Bancorp Capital Trust, which is
enclosed.
The trust securities are not savings accounts or deposits and are
not insured by the Federal Deposit Insurance Corporation or any other government
agency.
