<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 8, 1994
REGISTRATION NO. 33-50708
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
SHAWMUT NATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 06-1212629
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
777 MAIN STREET ONE FEDERAL STREET
HARTFORD, CONNECTICUT 06115 BOSTON, MASSACHUSETTS 02211
TEL. (203) 728-2000 TEL. (617) 292-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
RAYMOND A. GUENTER, ESQ.
777 MAIN STREET
HARTFORD, CONNECTICUT 06115
TEL. (203) 728-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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COPY TO:
WILLIAM S. RUBENSTEIN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this 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 only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES BEING TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
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<S> <C> <C> <C> <C>
Debt Securities........ 100%
Preferred Stock........ --
Depositary Shares(4)... $700,000,000(2) -- $700,000,000(2)(3) $218,750(6)
Common Stock(5)........ --
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Such amount represents the principal amount of any Debt Securities issued
at their principal amount, the issue price rather than the principal
amount of any Debt Securities issued at an original issue discount, the
liquidation preference of any Preferred Stock and the amount computed
pursuant to Rule 457(c) for any Common Stock.
(3) Exclusive of accrued interest or accrued dividends, if any. No separate
consideration will be received for Debt Securities, Preferred Stock or
Common Stock issuable upon conversion of or in exchange for Debt
Securities or Preferred Stock.
(4) In the event the Registrant elects to offer to the public fractional
interests in shares of the Preferred Stock registered hereunder,
Depositary Receipts will be distributed to those persons purchasing such
fractional interests and the shares will be issued to the Depositary under
the Deposit Agreement. The number of Depositary Shares to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement is
indeterminate.
(5) Includes Share Purchase Rights. Prior to the occurrence of certain events,
the Rights will not be exercisable or evidenced separately from the Common
Stock.
(6) Previously paid.
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<PAGE>
PROSPECTUS
Shawmut National Corporation
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
-----------
The Company may from time to time offer, together or separately, its (i) Debt
Securities, (ii) shares of Preferred Stock, no par value, which may be issued
in the form of Depositary Shares evidenced by Depositary Receipts, and/or (iii)
shares of Common Stock, par value $.01 per share, for issuance and sale on
terms determined in light of market conditions at the time of sale. The Debt
Securities, Preferred Stock and Common Stock are collectively called the
"Offered Securities". The Offered Securities offered pursuant to this
Prospectus may be issued in one or more series or issuances and will be limited
to $700,000,000 aggregate public offering price.
The Debt Securities may be unsecured Senior Debt Securities or unsecured
Subordinated Debt Securities. The Senior Debt Securities, when issued, will
rank on a parity with all the unsecured and unsubordinated indebtedness of the
Company, and the Subordinated Debt Securities, when issued, will be
subordinated in right of payment to all obligations of the Company to its other
creditors, except obligations ranking on a parity with or junior to the
Subordinated Debt Securities. See "Description of Debt Securities--
Subordination of Subordinated Debt Securities." With respect to Debt Securities
as to which this Prospectus is being delivered, the specific designation,
aggregate principal amount, maturity, rate and time of payment of any interest,
purchase price and any terms for mandatory or optional redemption (including
any sinking fund) of any Debt Securities, and any other specific terms of the
Debt Securities are set forth in the accompanying Prospectus Supplement. See
"Description of Debt Securities."
The specific terms of the Preferred Stock in respect of which this Prospectus
is being delivered, such as the specific title and stated value, any dividend,
liquidation, redemption, voting and other rights, the initial offering price,
and whether interests in the Preferred Stock will be represented by Depositary
Shares and in such event the identity of the Depositary, and any other specific
terms of the Preferred Stock are set forth in the accompanying Prospectus
Supplement. See "Description of Preferred Stock."
With respect to the Common Stock as to which this Prospectus is being
delivered, the methods of distribution and the public offering or purchase
price are set forth in the accompanying Prospectus Supplement. The Company's
Common Stock is listed on the New York Stock Exchange under the trading symbol
"SNC." Any Common Stock sold pursuant to a Prospectus Supplement will be listed
on such exchange, subject to official notice of issuance. See "Description of
Common Stock."
-----------
THE OFFERED SECURITIES WILL BE ISSUED BY A BANK HOLDING COMPANY AND WILL NOT
BE OBLIGATIONS OF A BANK AND WILL NOT BE INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER FEDERAL OR STATE AGENCY.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-----------
The Offered Securities may be offered directly by the Company, through agents
designated from time to time, through dealers or through underwriters. See
"Plan of Distribution." Any such agents or dealers, and any underwriters, are
set forth in the Prospectus Supplement. If an agent of the Company or a dealer
or underwriter is involved in the offering of the Offered Securities in
connection with which this Prospectus is being delivered, the agent's
commission, dealer's purchase price or underwriter's discount is set forth in,
or may be calculated from, the Prospectus Supplement and the net proceeds to
the Company from such sale will be the purchase price of such Offered
Securities less such commission in the case of an agent, the purchase price of
such Offered Securities in the case of a dealer, and the offering price less
such discount in the case of an underwriter and less, in each case, the other
expenses of the Company associated with such issuance and distribution. See
"Plan of Distribution" for possible indemnification arrangements for agents,
dealers and underwriters.
February 8, 1994
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER,
AGENT OR DEALER. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY OFFERED
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION HEREIN OR
THEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
NORTH CAROLINA
The Commissioner of Insurance of the State of North Carolina has not approved
or disapproved this offering nor has the Commissioner passed upon the accuracy
or adequacy of this Prospectus.
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AVAILABLE INFORMATION
Shawmut National Corporation (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center, New
York, New York 10048; and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661; and copies of such materials can be
obtained from the Public Reference Section of the Commission at prescribed
rates. Reports, proxy and other information statements concerning the Company
can also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005. The Company's common stock, $.01 par value
per share (the "Common Stock"), and Depositary Shares representing its 9.30%
Cumulative Preferred Stock are listed on the New York Stock Exchange.
The Company has filed a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933 (the "Securities Act") with the
Commission with respect to the Senior Debt Securities, the Subordinated Debt
Securities, the Preferred Stock, in which interests may be represented by
Depositary Shares, and the Common Stock (collectively, the "Offered
Securities") being offered pursuant to this Prospectus. As permitted by the
rules and regulations of the Commission, this Prospectus omits certain of the
information contained in the Registration Statement. For further information
with respect to the Company and the Offered Securities being offered pursuant
to this Prospectus, reference is hereby made to such Registration Statement,
including the exhibits filed as part thereof. Statements contained in this
Prospectus concerning the provisions of certain documents filed with, or
incorporated by reference in, the Registration Statement are not necessarily
complete, each such statement being qualified in all respects by such
reference. Copies of all or any part of the Registration Statement, including
the documents incorporated by reference therein or exhibits thereto, may be
obtained upon payment of the prescribed rates at the offices of the Commission
set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference:
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992;
(ii) The Company's Annual Report on Form 11-K for the fiscal year ended
December 31, 1992;
(iii) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1993, June 30, 1993 and September 30, 1993;
(iv) The Company's Current Reports on Form 8-K dated March 23, 1993, April
19, 1993, April 21, 1993, July 14, 1993, November 16, 1993, December
1, 1993 and December 20, 1993; and
2
<PAGE>
(v) The descriptions of the Common Stock, Series A Junior Participating
Preferred Stock and Series A Junior Participating Preferred Stock
Purchase Rights, and Adjustable Rate Preferred Stock, set forth in the
Company's Registration Statements filed pursuant to Section 12 of the
1934 Act and any amendment or report filed for the purpose of updating
those descriptions.
In addition, all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Offered Securities shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which is also deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
Any person receiving a copy of this Prospectus, including any beneficial
owner, may obtain without charge, upon oral or written request, a copy of any
or all documents incorporated by reference into this Prospectus (other than
exhibits to such documents which are not specifically incorporated by reference
in such documents). Any such request should be directed to the Company at 777
Main Street, MSN 309, Hartford, Connecticut 06115, Attention: Shareholder
Relations, telephone number (203) 728-2028.
THE COMPANY
The Company is a multibank holding company registered under the Bank Holding
Company Act of 1956, as amended (the ""BHCA''). It was organized under the laws
of the State of Delaware in October 1987 and became a bank holding company on
February 29, 1988 through the consummation of a plan of reorganization between
Hartford National Corporation ("HNC") and Shawmut Corporation ("SC") pursuant
to which both HNC and SC became wholly owned subsidiaries of the Company. The
Company maintains dual headquarters in the States of Connecticut and
Massachusetts.
The principal business of the Company is to provide, through its bank
subsidiaries, comprehensive corporate, commercial, correspondent and individual
banking services, and personal and corporate trust services through its network
of approximately 275 branches located throughout Connecticut, Massachusetts and
Rhode Island. The Company's principal subsidiaries are Shawmut Bank
Connecticut, National Association ("SBC"), Hartford, Connecticut and Shawmut
Bank, National Association ("SBM"), Boston, Massachusetts.
SBC is among the oldest banks in the United States, having opened for
business on August 9, 1792 under a charter granted by the State of Connecticut
to its first predecessor on May 29, 1792. In 1865 SBC converted into a national
banking association, in 1969 it became a subsidiary of HNC, and in 1993 its
present name was adopted. At September 30, 1993, SBC had assets of $13.5
billion and deposits of $8.0 billion. SBC had trust assets under management
totaling $8.3 billion as of September 30, 1993.
SBM, also among the oldest banks in the United States, was established in
1836 under a charter granted by the Commonwealth of Massachusetts to its first
predecessor. In 1864 it converted to a national banking association, in 1964 it
became a subsidiary of SC, and in 1986 its present name was adopted. At
September 30, 1993, SBM had assets of $13.4 billion and deposits of $7.9
billion. SBM had trust assets under management totaling $3.9 billion as of
September 30, 1993.
The Company provides other financial services through its other subsidiaries,
including Shawmut Mortgage Company ("SMC"). With its principal office in West
Hartford, Connecticut, SMC originates substantially all of the residential
mortgages among the Company and its subsidiaries. It also funds, sells and
services residential mortgage loans through its network of 10 offices in
Connecticut, Massachusetts, Rhode Island and New Hampshire. At September 30,
1993 it had assets of $84.1 million.
At September 30, 1993, the Company had assets of $27.0 billion, deposits of
$15.4 billion, loans of $15.3 billion and shareholders' equity of $1.7 billion.
3
<PAGE>
The principal executive offices of the Company are located at 777 Main
Street, Hartford, Connecticut 06115 and One Federal Street, Boston,
Massachusetts 02211. Its telephone numbers in Connecticut and Massachusetts are
(203) 728-2000 and (617) 292-2000, respectively.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Offered
Securities for general corporate purposes, including investments in marketable
securities, investments in and advances to the Company's subsidiaries,
refinancing existing debt, and financing possible future acquisitions,
including acquisitions of banking assets, assumptions of deposit liabilities
and acquisitions involving financial institutions offered for sale by
regulatory agencies, or any other purpose described in the Prospectus
Supplement.
REGULATORY MATTERS
GENERAL
The Company is a bank holding company subject to supervision and regulation
by the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") under the BHCA. As a bank holding company, the Company's activities and
those of its banking and nonbanking subsidiaries are limited to the business of
banking and activities closely related or incidental to banking, and the
Company may not directly or indirectly acquire the ownership or control of more
than 5 percent of any class of voting shares or substantially all of the assets
of any company, including a bank, without the prior approval of the Federal
Reserve Board.
The Company's principal subsidiary banks, SBC and SBM, are subject to
supervision and examination by the Office of the Comptroller of the Currency
(the "OCC"). The Federal Deposit Insurance Corporation (the "FDIC") also has
back-up enforcement authority with respect to the principal bank subsidiaries.
All of the Company's subsidiary banks are insured by, and subject to certain
regulations of, the FDIC, and are also subject to requirements and restrictions
under federal and state law, including requirements to maintain reserves
against deposits, restrictions on the types and amounts of loans that may be
granted and the interest that may be charged thereon, and limitations on the
types of investments that may be made and the types of services that may be
offered. Various consumer laws and regulations also affect the operations of
the Company's subsidiary banks.
HOLDING COMPANY STRUCTURE
The Company's subsidiary banks are subject to restrictions under federal law
which limit certain transactions by each of them with the Company and its
nonbanking subsidiaries, including loans, other extensions of credit,
investments or asset purchases. Such transactions by any subsidiary bank with
any of the Company or its nonbanking subsidiaries are limited in amount to 10
percent of such subsidiary bank's capital and surplus and, with respect to the
Company and all of its nonbanking subsidiaries together, to an aggregate of 20
percent of such subsidiary bank's capital and surplus. Furthermore, such loans
and extensions of credit, as well as certain other transactions, are required
to be secured in specified amounts.
Because the Company is a holding company, its right to participate in the
assets of any subsidiary upon the latter's liquidation or reorganization will
be subject to the prior claims of the subsidiary's creditors (including
depositors in the case of bank subsidiaries) except to the extent that the
Company may itself be a creditor with recognized claims against the subsidiary.
4
<PAGE>
A depository institution insured by the FDIC can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC in connection
with (i) the default of a commonly controlled FDIC-insured depository
institution or (ii) any assistance provided by the FDIC to a commonly
controlled depository institution in danger of default. In some circumstances
(depending upon the amount of the loss or anticipated loss suffered by the
FDIC), cross-guarantee liability may result in the ultimate failure or
insolvency of one or more insured depository institutions in a holding company
structure. Any obligation or liability owed by a subsidiary bank to its parent
company is subordinate to the subsidiary bank's cross-guarantee liability with
respect to commonly controlled insured depository institutions.
Under Federal Reserve Board policy, a bank holding company is expected to act
as a source of financial strength to each of its banking subsidiaries and
commit resources to their support. This support may be required at times when,
absent such Federal Reserve Board policy, a holding company may not be inclined
to provide it. Pursuant to recent legislation, a bank holding company also
could be liable in certain instances for the capital deficiencies of an
undercapitalized bank subsidiary.
LEGISLATION
Under the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), the federal banking agencies must take prompt supervisory and
regulatory actions against undercapitalized depository institutions. Depository
institutions will be assigned to five capital categories: "well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized,"
and "critically undercapitalized," and subjected to differential regulation
corresponding to the capital category within which the institution falls.
Implementing regulations require that a well capitalized institution have a
minimum total capital to total risk-weighted assets ratio of 10 percent, a
minimum Tier 1 capital to total risk-weighted assets ratio of 6 percent, a
minimum leverage ratio of 5 percent and not be subject to any written order,
agreement, or directive. An adequately capitalized institution meets all of its
minimum capital requirements under existing capital adequacy guidelines
including a leverage ratio of at least 4 percent (3 percent if given the
highest regulatory rating and not experiencing significant growth), but is not
well capitalized. An undercapitalized institution would fail to meet any one of
these minimum capital requirements; a significantly undercapitalized
institution would have a total capital to total risk-weighted assets ratio of
less than 6 percent, a Tier 1 capital to total risk-weighted assets ratio of
less than 3 percent or a leverage ratio of less than 3 percent; and a
critically undercapitalized institution would have a tangible equity ratio of 2
percent or less of total assets. Under certain circumstances, a well
capitalized, adequately capitalized or undercapitalized institution may be
required to comply with supervisory actions as if the institution was in the
next lower capital category.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets, and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized depository institutions are subject to appointment
of a receiver or conservator.
Various other legislation, including proposals to overhaul the banking
regulatory system and to limit the investments that a depository institution
may make with insured funds are from time to time introduced in Congress. The
Company cannot determine the ultimate effect that any potential legislation, if
enacted, would have upon its financial condition or operations.
BROKERED DEPOSITS
FDIC regulations adopted under FDICIA prohibit a bank from accepting brokered
deposits (which term is defined to include any deposit obtained, directly or
indirectly, from any person engaged in the business of placing deposits with,
or selling interests in deposits of, an insured depositary institution) unless
(i) it is well capitalized or (ii) it is adequately capitalized and receives a
waiver from the FDIC. For purposes of this
5
<PAGE>
regulation, a bank is defined to be well capitalized under the standards
described above provided it is not otherwise in a "troubled condition" as
specified by its appropriate federal regulatory agency. A bank that is
adequately capitalized and that accepts brokered deposits under a waiver from
the FDIC may not pay an interest rate on any deposit in excess of 75 basis
points over certain prevailing market rates; there are no such restrictions on
a bank that is well capitalized. For the capital ratios of the Company's bank
subsidiaries, see "Capital Adequacy." The Company does not believe that the
brokered deposits regulation will have a material effect on the funding or
liquidity of any of the Company's subsidiary banks.
REGULATORY RESTRICTIONS ON DIVIDENDS
It is the policy of the Federal Reserve Board that bank holding companies
should pay cash dividends on common stock only out of income available over the
past year and only if prospective earnings retention is consistent with the
organization's expected future needs. The policy further provides that bank
holding companies should not maintain a level of cash dividends that undermines
the bank holding company's ability to serve as a source of strength to its
subsidiary banks. Principal sources of revenues for the Company are dividends
received from its banks and other subsidiaries and interest earned on short-
term investments and advances to subsidiaries. Federal law imposes limitations
on the payment of dividends by the subsidiaries of the Company that are
national banks. Two different calculations are performed to measure the amount
of dividends that may be paid: a recent earnings test and an undivided profits
test. Under the recent earnings test, a dividend may not be paid if the total
of all dividends declared by a national bank in any calendar year is in excess
of the current year's net profits combined with the retained net profits of the
two preceding years unless the bank obtains the approval of the OCC. Under the
undivided profits test, a dividend may not be paid in excess of a bank's
undivided profits then on hand, after deducting bad debts in excess of the
reserve for loan losses. Under the recent earnings test, which is the more
restrictive of the two tests, at September 30, 1993, SBM could pay dividends of
$124.4 million to the Company without prior approval of the OCC. At September
30, 1993, SBC could not pay any dividends to the Company without prior approval
of the OCC. SBC had a deficit with respect to its net profits of $69.1 million
at September 30, 1993. SBM and SBC had undivided profits of $415.7 million and
$195.0 million, respectively, at September 30, 1993.
In addition, the Federal regulatory agencies are authorized to prohibit a
banking organization from engaging in an unsafe or unsound banking practice.
Depending upon the circumstances, the agencies could take the position that
paying a dividend would constitute an unsafe or unsound banking practice.
FDIC INSURANCE ASSESSMENTS
The Company's subsidiary banks, the deposits of which are insured by the Bank
Insurance Fund (the "BIF") of the FDIC, are subject to FDIC deposit insurance
assessments.
The FDIC has adopted a risk-based assessment system under which the
assessment rate for an insured depository institution varies according to the
level of risk involved in its activities. An institution's risk category is
based partly upon whether the institution is well capitalized, adequately
capitalized or less than adequately capitalized. Each insured depository
institution is assigned to one of the following "supervisory subgroups": "A",
"B" or "C". Group "A" institutions are financially sound institutions with only
a few minor weaknesses. Group "B" institutions are institutions that
demonstrate weaknesses which, if not corrected, could result in significant
deterioration. Group "C" institutions are institutions for which there is a
substantial probability that the FDIC will suffer a loss in connection with the
institution unless effective action is taken to correct the areas of weakness.
Based on its capital and supervisory subgroups, each BIF member institution is
assigned an annual FDIC assessment rate varying between 0.23 percent and 0.31
percent of deposits. It remains possible that assessments will be raised to
higher levels in the future. The FDIC is also authorized to impose special
additional assessments.
6
<PAGE>
CAPITAL ADEQUACY
RISK-BASED CAPITAL AND LEVERAGE RATIOS
<TABLE>
<CAPTION>
MINIMUM
AS OF SEPTEMBER 30, 1993 REQUIRED
----------------------------- REGULATORY
SBC SBM COMPANY RATIO
-------- -------- --------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Total shareholders' equity..... $1,012.7 $ 930.5 $ 1,666.1
Tier 1 capital................. 956.3 903.2 1,557.9
Total capital.................. 1,079.7 1,056.2 2,412.7
Risk-weighted assets........... 9,635.9 9,889.7 20,054.5
Tier 1 capital ratio........... 9.92% 9.13% 7.77% 4.00%
Total capital ratio............ 11.20 10.68 12.03 8.00
Leverage ratio................. 7.55 7.03 6.05 3.00
</TABLE>
The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies such as the Company. The minimum ratio of Total capital to
risk-weighted assets, including certain off balance sheet items such as
standby letters of credit, is 8.00 percent. At least half of the total capital
must be comprised of common stockholders' equity (including retained
earnings), non-cumulative perpetual preferred stock, and a limited amount of
cumulative perpetual preferred stock, less certain intangibles (including
goodwill) ("Tier 1 capital"). The remainder may consist of a limited amount of
subordinated debt, other preferred stock, certain other instruments, and a
limited amount of reserves for loan losses ("Tier 2 capital"). Under the
Federal Reserve Board's requirements, the Company's Tier 1 and Total capital
ratios at September 30, 1993 were 7.77 percent and 12.03 percent,
respectively, compared to required minimum ratios of 4.00 percent and 8.00
percent, respectively.
The federal bank regulatory authorities have also established risk-based
capital guidelines for national banks and state member and non-member banks.
These regulations are generally similar to those established by the Federal
Reserve Board for bank holding companies. Under the OCC guidelines, the Tier 1
and Total capital ratios at September 30, 1993, respectively, for SBC were
9.92 percent and 11.20 percent, and for SBM were 9.13 percent and 10.68
percent, respectively.
The Federal Reserve Board and the OCC have also adopted minimum leverage
ratios for bank holding companies and national banks, respectively, requiring
such banking organizations to maintain Tier 1 capital of at least 3.00 percent
of total average quarterly assets less certain intangibles (including
goodwill). These leverage ratios are minimum requirements for the most highly
rated banking organizations, and other banking organizations are expected to
maintain an additional cushion of at least 100 to 200 basis points above 3.00
percent, taking into account the level and nature of risk, to be assigned to
the specific banking organization by the primary regulator. The Federal
Reserve Board has not advised the Company of any specific minimum leverage
ratio applicable to it. Consequently, the Company cannot know whether its
leverage ratio meets, exceeds or is deficient with respect to any specific
standard the Federal Reserve Board might apply to it.
Federal Reserve Board guidelines also provide that banking organizations
experiencing internal growth or making acquisitions will be expected to
maintain strong capital positions substantially above the minimum supervisory
levels, without significant reliance on intangible assets.
Management and the Boards of Directors of the Company and its principal
subsidiaries undertake at least annually a review of capital objectives and,
in connection therewith, currently deem it prudent to manage the principal
subsidiaries at a leverage ratio of at least 6.00 percent and the Company at a
leverage ratio of at least 4.50 percent. Management and the Boards of
Directors have adopted an objective of maintaining a Tier 1 capital ratio of
8.00 percent and a Total capital ratio of 10.00 percent at its principal
subsidiaries, and an objective of maintaining a Tier 1 capital ratio of 6.00
percent and a Total capital ratio of 10.00 percent at the
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Company. In connection with the 1990 merger of State Savings Bank and Shawmut
Bank of Rhode Island, N.A. into SBC, management committed to the OCC that it
will maintain a minimum leverage ratio of 5.00 percent for SBC. In connection
with the September 26, 1992 merger of The Provident Institution for Savings in
the Town of Boston into SBM, management committed to the OCC to maintain a
minimum leverage ratio of 6.50 percent for SBM, which ratio may, based upon
reductions in SBM's classified asset ratio (classified assets to Tier 1 capital
plus reserves for loan losses), decline to a minimum requirement of 6.00
percent. At September 30, 1993, the leverage ratios for SBC and SBM were 7.55
percent and 7.03 percent, respectively. The Company's leverage ratio at
September 30, 1993 was 6.05 percent.
The federal banking agencies have issued a notice of proposed rulemaking to
solicit public comment on a proposal for incorporating an interest rate risk
component into the existing risk-based capital standards. Under the proposal,
banks and bank holding companies with greater than "normal" levels of interest
rate risk would be required to have additional capital. The Federal Reserve
Board has requested comments on a proposal to amend its risk-based and leverage
capital guidelines to include in Tier 1 capital the net unrealized changes in
the value of securities available for sale. In addition, the Federal Reserve
Board and the OCC have requested comments on proposals to limit the amount of
certain deferred tax assets that may be included in a bank holding company's or
a national bank's, respectively, Tier 1 capital for risk-based and leverage
capital purposes. The Company cannot determine whether, or in what form, such
proposals may be enacted and, if enacted, what effect such regulations would
have upon its capital ratios.
RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The Company's ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred stock dividend requirements are set forth
below for the periods indicated:
<TABLE>
<CAPTION>
NINE-MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ----------------------------
1993 1992 1991 1990 1989 1988
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits.. 1.55x 1.29x 0.41x 0.70x 0.70x 1.58x
Including Interest on Deposits.. 1.28x 1.11 0.85 0.92 0.88 1.22
Earnings to Combined Fixed Charges
and Preferred Stock Dividend
Requirements:
Excluding Interest on Deposits.. 1.47 1.22 0.41 0.70 0.70 1.58
Including Interest on Deposits.. 1.24 1.08 0.84 0.92 0.87 1.22
</TABLE>
For the years ended December 31, 1991, 1990 and 1989, earnings were
insufficient to cover both fixed charges and combined fixed charges and
preferred stock dividend requirements, both excluding and including interest on
deposits. Additional earnings of $169.1 million, $127.3 million and $219.7
million are necessary for the years ended December 31, 1991, 1990 and 1989,
respectively, to bring the ratios of earnings to fixed charges to one-to-one on
both an excluding and including interest on deposits basis. Additional earnings
of $171.4 million, $129.6 million and $222.0 million are necessary for the
years ended December 31, 1991, 1990 and 1989, respectively, to bring the ratios
of earnings to combined fixed charges and preferred stock dividend requirements
to one-to-one on both an excluding and including interest on deposits basis.
For purposes of computing both the ratio of earnings to fixed charges and the
ratio of earnings to combined fixed charges and preferred stock dividend
requirements, earnings represent income (loss) before income taxes and
extraordinary credit and fixed charges. Fixed charges, excluding interest on
deposits, include interest expense other than on deposits, that portion of
rents representative of the interest factor (net of income from subleases) and
amortization of debt issuance cost. Fixed charges, including interest on
deposits, include all interest expense, that portion of rents representative of
the interest factor (net of income
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from subleases) and amortization of debt issuance cost. Combined fixed charges
and preferred stock dividend requirements, both excluding and including
interest on deposits, include fixed charges and the preferred stock dividend
requirements. Preferred stock dividend requirements, which are not deductible
for income tax purposes, represent preferred stock dividends adjusted to a
taxable equivalent basis. This adjustment has been calculated by using the
effective tax rate for the applicable year. No taxable equivalent adjustments
were made in loss years. Dividends on preferred stock are cumulative and
adjustable. See "Outstanding Preferred Stock".
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an Indenture (the "Senior
Indenture"), between the Company and Chemical Bank, as trustee. The
Subordinated Debt Securities are to be issued under a second Indenture (the
"Subordinated Indenture"), dated as of December 24, 1992, between the Company
and Chemical Bank, as trustee. Copies of the Senior Indenture and the
Subordinated Indenture have been filed with the Commission as exhibits to the
Registration Statement. The Senior Indenture and the Subordinated Indenture are
sometimes referred to collectively as the "Indentures." Chemical Bank is
hereinafter referred to as the "Senior Trustee" when referring to it in its
capacity as trustee under the Senior Indenture, as the "Subordinated Trustee"
when referring to it in its capacity as trustee under the Subordinated
Indenture, and as the "Trustee" when referring to it in its capacity as trustee
under both of the Indentures. The following summaries of certain provisions of
the Senior Debt Securities, the Subordinated Debt Securities and the Indentures
do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Indenture applicable to a
particular series of Debt Securities (the "Applicable Indenture"), including
the definitions therein of certain terms. Wherever particular Sections,
Articles or defined terms of the Applicable Indenture are referred to, it is
intended that such Sections, Articles or defined terms shall be incorporated
herein by reference. Article and Section references used herein are references
to the Applicable Indenture. Capitalized terms not otherwise defined herein
shall have the meaning given in the Applicable Indenture.
The following sets forth certain general terms and provisions of the Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Debt Securities") will be described
in the Prospectus Supplement relating to such Offered Debt Securities (the
"Applicable Prospectus Supplement").
The Company is a bank holding company, and the right of the Company to
participate as a shareholder in any distribution of assets of any subsidiary
upon its liquidation or reorganization or winding-up (and thus the ability of
Holders of the Debt Securities to benefit, as creditors of the Company, from
such distribution) is subject to the prior claims of creditors of any such
subsidiary. The Company's wholly-owned subsidiary holding companies, HNC and
SC, are subject to claims by creditors for debt obligations. The Company's
subsidiary banks are subject to claims by creditors for debt obligations,
including deposit liabilities, obligations for federal funds purchased and
securities sold under repurchase agreements. There are also various legal
limitations on the extent to which the Company's subsidiary banks may pay
dividends or otherwise supply funds to the Company or its affiliates. See
"Regulatory Matters."
GENERAL
The Indentures do not limit the amount of Debt Securities that may be issued
thereunder and provide that Debt Securities may be issued thereunder from time
to time in one or more series. The Debt Securities will be unsecured
obligations of the Company.
Unless otherwise indicated in the Applicable Prospectus Supplement, principal
of, premium, if any, and interest on the Debt Securities will be payable, and
the transfer of Debt Securities will be registrable, at the office or agency of
the Company in each Place of Payment maintained by the Company and at any other
office or agency maintained by the Company for such purpose, except that, at
the option of the Company, interest may be paid by mailing a check to the
address of the Person entitled thereto as it appears on the register for the
Debt Securities. (Sections 301, 305, 307 and 1002) The Debt Securities will be
issued only in fully registered form without coupons and, unless otherwise
indicated in the Applicable Prospectus Supplement, in denominations of $1,000
or integral multiples thereof. (Section 302) No service charge will be
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<PAGE>
made for any registration of transfer or exchange of the Debt Securities, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith. (Section 305)
The Applicable Prospectus Supplement will describe the following terms of the
Offered Debt Securities: (1) the title of the Offered Debt Securities; (2)
whether the Offered Debt Securities are Senior Debt Securities or Subordinated
Debt Securities; (3) any limit on the aggregate principal amount of the Offered
Debt Securities; (4) the Person to whom any interest on the Offered Debt
Securities is payable if other than the Person in whose name any such Offered
Debt Securities are registered; (5) the date or dates on which the principal of
the Offered Debt Securities will mature; (6) the rate or rates per annum (which
may be fixed or variable) at which the Offered Debt Securities will bear
interest, if any, and the date or dates from which any such interest, if any,
will accrue; (7) the dates on which such interest, if any, on the Offered Debt
Securities will be payable and the Regular Record Dates for such Interest
Payment Dates; (8) the place or places where the principal of and any premium
and interest on the Offered Debt Securities shall be payable; (9) any mandatory
or optional sinking funds or analogous provisions; (10) the date, if any, after
which and the price or prices at which the Offered Debt Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed and
the other detailed terms and provisions of any such optional or mandatory
redemption provision; (11) the obligation of the Company, if any, to redeem or
repurchase the Offered Debt Securities at the option of the Holder; (12) if
other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Offered Debt Securities shall be issuable; (13) if
other than the principal amount thereof, the portion of the principal amount of
the Offered Debt Securities that will be payable upon the declaration of
acceleration of the Maturity thereof; (14) the currency of payment of principal
of and any premium and interest on the Offered Debt Securities; (15) any index
used to determine the amount of payment of principal of, and any premium and
interest on, the Offered Debt Securities; (16) if the Offered Debt Securities
will be issuable only in the form of a Global Security, the Depositary or its
nominee with respect to the Offered Debt Securities and the circumstances under
which the Global Security may be registered for transfer or exchange in the
name of a Person other than the Depositary or its nominee; (17) the
applicability, if any, of the provisions described under "Defeasance and
Covenant Defeasance"; (18) any additional Event of Default, and in the case of
any Offered Subordinated Debt Securities, any additional Event of Default that
would result in the acceleration of the maturity thereof; and (19) any other
terms of the Offered Debt Securities. (Section 301)
Both Senior Debt Securities and Subordinated Debt Securities may be issued as
Original Issue Discount Debt Securities to be offered and sold at a substantial
discount below their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such Original Issue Discount
Debt Securities will be described in the Applicable Prospectus Supplement.
"Original Issue Discount Debt Security" means any Debt Security which provides
for an amount less than the principal amount thereof to be due and payable upon
the declaration of acceleration of the Maturity thereof upon the occurrence of
an Event of Default and the continuation thereof. (Section 101)
Unless otherwise indicated in the Applicable Prospectus Supplement, the
covenants contained in the Indentures and the Debt Securities will not afford
Holders protection in the event of a sudden decline in credit rating that might
result from a recapitalization, restructuring, or other highly leveraged
transaction.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Applicable Prospectus Supplement, the
following provisions will apply to the Subordinated Debt Securities.
The payment of the principal of, and interest on the Subordinated Debt
Securities will to the extent set forth in the Subordinated Indenture, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined below). (Section 1301) In certain events of
insolvency, bankruptcy, reorganization or similar events involving the Company,
the payment of the principal of and the interest on
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<PAGE>
the Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, also effectively be subordinated in right of payment to
the prior payment in full of all Other Financial Obligations (as defined
below). Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy, insolvency or
similar proceedings of the Company, the holders of all Senior Indebtedness will
first be entitled to receive payment in full of all amounts due or to become
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment in respect of the principal of, or interest on
the Subordinated Debt Securities. (Section 1302) If, upon any such payment or
distribution of assets to creditors, there remain, after giving effect to such
subordination provisions in favor of the holders of Senior Indebtedness, any
amounts of cash, property or securities available for payment or distribution
in respect of the Senior Debt Securities (as defined in the Subordinated
Indenture, "Excess Proceeds") and if, at such time, any person entitled to
payment pursuant to the terms of the Other Financial Obligations (as defined in
the Subordinated Indenture, "Entitled Person") has not received payment in full
of all amounts due or to become due on or in respect of such Other Financial
Obligations, then such Excess Proceeds shall first be applied to pay or provide
for the payment in full of such Other Financial Obligations before any payment
or distribution may be made in respect of the Subordinated Debt Securities. In
the event of the acceleration of the Maturity of any Subordinated Debt
Securities, the holders of all Senior Indebtedness will first be entitled to
receive payment in full of all amounts due or to become due thereon before the
Holders of the Subordinated Debt Securities will be entitled to receive any
payment of the principal of, or interest on the Subordinated Debt Securities.
(Section 1303) Accordingly, in case of such an acceleration, all Senior
Indebtedness would have to be repaid before any payment could be made in
respect of the Subordinated Debt Securities. No payments on account of
principal or interest in respect of the Subordinated Debt Securities may be
made if there shall have occurred and be continuing a default in any payment
with respect to any Senior Indebtedness, or an event of default with respect to
any Senior Indebtedness permitting the holders thereof to accelerate the
maturity thereof, or if any judicial proceeding shall be pending with respect
to any such default. (Section 1304)
By reason of such subordination, in the event of the insolvency of the
Company, creditors of the Company who are not holders of Senior Indebtedness or
the Subordinated Debt Securities may recover less, ratably, than holders of
Senior Indebtedness and may recover more, ratably, than Holders of the
Subordinated Debt Securities.
"Senior Indebtedness" is defined in the Subordinated Indenture to mean the
principal of, premium, if any, and interest on (i) all indebtedness of the
Company for money borrowed (including indebtedness of others guaranteed by the
Company) other than the Subordinated Debt Securities, whether outstanding on
the date of execution of the Subordinated Indenture or thereafter created,
assumed or incurred and (ii) any amendments, renewals, extensions,
modifications and refundings of any such indebtedness, unless in either case in
the instrument creating or evidencing any such indebtedness or pursuant to
which it is outstanding it is provided that such indebtedness is not superior
in right of payment to the Subordinated Debt Securities. (Section 101) For the
purposes of this definition, "indebtedness for money borrowed" is defined as
(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, (ii) any deferred payment obligation of, or
any such obligation guaranteed by, the Company for the payment of the purchase
price of property or assets evidenced by a note or similar instrument, and
(iii) any obligation of, or any such obligation guaranteed by, the Company for
the payment of rent or other amounts under a lease of property or assets which
obligation is required to be classified and accounted for as a capitalized
lease on the balance sheet of the Company under generally accepted accounting
principles.
"Other Financial Obligations" is defined in the Subordinated Indenture to
mean all obligations of the Company to make payment pursuant to the terms of
financial instruments, such as (i) securities contracts and foreign currency
exchange contracts, (ii) derivative instruments, such as swap agreements
(including interest rate and currency and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange agreements, options, commodity futures
11
<PAGE>
contracts, commodity options contracts and (iii) similar financial instruments;
provided that the term Other Financial Obligations shall not include (A)
obligations on account of Senior Indebtedness and (B) obligations on account of
indebtedness of the Company for money borrowed ranking pari passu with or
subordinate to the Subordinated Debt Securities.
The Subordinated Indenture will not limit the amount of other indebtedness,
including Senior Indebtedness and Other Financial Obligations, that may be
issued or incurred by the Company or any of its Subsidiaries.
The Company has outstanding $150 million aggregate principal amount of 8 5/8%
Subordinated Notes Due 1999 and $150 million aggregate principal amount of
7.20% Subordinated Notes due 2003. The total indebtedness of the Company and
its holding company subsidiaries at September 30, 1993 was $863.6 million.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
RESTRICTION ON SALE OR ISSUANCE OF VOTING STOCK OF PRINCIPAL SUBSIDIARIES
The Senior Indenture contains a covenant by the Company that, so long as any
Debt Securities under the Applicable Indenture are outstanding, (a) it will
not, and will not permit any Subsidiary to, issue, sell, transfer, assign,
pledge or otherwise dispose of any shares of Voting Stock of any class of any
Principal Subsidiary or any securities convertible or exchangeable into or
options, warrants or rights to subscribe for or purchase shares of Voting Stock
of any class of such Principal Subsidiary, unless, after giving effect to such
transaction and to shares issuable upon conversion or exchange of outstanding
securities convertible or exchangeable into such Voting Stock or upon the
exercise of options, warrants or rights (including such securities, if any,
which may be the subject of such transaction), at least 80 percent of the
outstanding shares of Voting Stock of each class of such Principal Subsidiary
shall be owned at that time directly or indirectly by the Company, free of any
lien; and (b) it will not permit any Principal Subsidiary to merge or
consolidate or convey or transfer all or substantially all of its assets,
unless at least 80 percent of the outstanding shares of Voting Stock of each
class (after giving effect to such transaction and to shares issuable upon
conversion or exchange of outstanding securities convertible or exchangeable
into Voting Stock or upon the exercise of options, warrants or rights,
including such securities, if any, which may be issued in such transaction) of
the surviving corporation in the case of merger or consolidation or of the
transferee corporation in the case of a conveyance or transfer, shall be owned
at the time directly or indirectly by the Company.
As defined in the Senior Indenture, the term "Principal Subsidiary" means SBM
or SBC, and any successors to such banks, and the term "Voting Stock" means
stock which ordinarily has voting power for election of a majority of the board
of directors whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.
Notwithstanding the foregoing, any such issuance, sale or disposition of
shares or securities, or any such merger or consolidation or conveyance or
transfer of assets shall not be prohibited if required (a) by any law,
regulation or order of any court or governmental authority of competent
jurisdiction or (b) as a condition imposed by any law, regulation or order of
any court or governmental authority of competent jurisdiction to the
acquisition by the Company, directly or indirectly, through purchase of stock
or assets, merger, consolidation or otherwise of any other corporation or
entity, if, after giving effect to such disposition and acquisition, (i) the
Company would own, directly or indirectly, more than 80 percent of the Voting
Stock of such other corporation or entity, and (ii) the Consolidated Banking
Assets of the Company would be at least equal to the Consolidated Banking
Assets of the Company prior to such transaction. For this purpose,
"Consolidated Banking Assets" means all assets owned directly or indirectly by
a Bank Subsidiary and reflected in the Company's consolidated statement of
condition prepared in accordance with generally accepted accounting principles.
(Section 1007)
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<PAGE>
There is no similar restriction on the sale or issuance of Voting Stock by a
Principal Subsidiary in the Subordinated Indenture.
EVENTS OF DEFAULT
The Senior Indenture (with respect to any series of Senior Debt Securities
then outstanding) and, unless otherwise provided in the Applicable Prospectus
Supplement, the Subordinated Indenture (with respect to any series of
Subordinated Debt Securities), define an Event of Default as any one of the
following events: (a) default in the payment of any interest on any Debt
Security of that series when it becomes due and payable, and continuance of
such default for a period of 30 days (in the case of the Subordinated
Indenture, whether or not payment is prohibited by the subordination
provisions); (b) default in the payment of the principal of (or premium, if
any, on) any Debt Security of that series at its Maturity (in the case of the
Subordinated Indenture, whether or not payment is prohibited by the
subordination provisions); (c) failure to deposit any sinking fund payment
when, and as, due by the terms of a Debt Security of that series (in the case
of the Subordinated Indenture, whether or not payment is prohibited by the
subordination provisions); (d) failure to perform any other covenants or
agreements of the Company in the Applicable Indenture (other than covenants or
agreements included in the Applicable Indenture solely for the benefit of a
series of Debt Securities thereunder other than that series), and continuance
of such default for a period of 60 days after the holders of at least 25
percent of the principal amount of the Outstanding Debt Securities of that
series have given written notice specifying such failure as provided in the
Applicable Indenture; (e) certain events in bankruptcy, insolvency or
reorganization of the Company (and in the case of the Senior Indenture only, of
certain of its Subsidiaries); and (f) any other Event of Default provided with
respect to Debt Securities of that series. (Section 501) If an Event of Default
occurs with respect to Debt Securities of any series, the Trustee shall give
the Holders of Debt Securities of such series notice of such default, provided,
however, that in the case of a default described in (d) above, no such notice
to Holders shall be given until at least 30 days after the occurrence thereof.
(Section 602)
If an Event of Default with respect to the Senior Debt Securities of any
series at the time Outstanding occurs and is continuing, either the Trustee or
the Holders of at least 25 percent of the aggregate principal amount of the
Outstanding Debt Securities of that series may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount Debt
Securities, such portion of the principal amount as may be specified in the
terms thereof) of all the Senior Debt Securities of that series to be due and
payable immediately. Payment of the principal of the Subordinated Debt
Securities may be accelerated only in the case of certain events of bankruptcy,
insolvency or reorganization of the Company. The Trustee and the Holders will
not be entitled to accelerate the maturity of the Subordinated Debt Securities
upon the occurrence of any of the Events of Default described above except for
those described in subparagraph (e) with respect to the Subordinated Debt
Securities (i.e., certain events in bankruptcy, insolvency or reorganization of
the Company). Accordingly, there is no right of acceleration in the case of a
default in the performance of any other covenant with respect to the
Subordinated Debt Securities, including the payment of interest or principal.
At any time after a declaration of acceleration with respect to Debt Securities
of any series has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority of the aggregate
principal amount of Outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration. (Section 502)
The Indentures provide that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity. (Section 603) Subject
to such provisions for the indemnification of the Trustee and to certain other
conditions, the Holders of a majority of the aggregate principal amount of the
Outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of that series. (Section 512)
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<PAGE>
No Holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Applicable Indenture or for any remedy
thereunder, unless: (a) such Holder has previously given to the Trustee under
the Applicable Indenture written notice of a continuing Event of Default; (b)
the Holders of at least 25 percent of the aggregate principal amount of the
Outstanding Debt Securities of that series have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee; (c) in the 60-day period following receipt of a written notice from a
Holder, the Trustee has not received from the Holders of a majority of the
aggregate principal amount of the Outstanding Debt Securities of that series a
direction inconsistent with such request; and (d) the Trustee shall have failed
to institute such proceeding within such 60-day period. (Section 507) However,
such limitations do not apply to a suit instituted by a Holder of a Debt
Security for enforcement of payment of the principal of and premium, if any, or
interest on such Debt Security on or after the respective due dates expressed
in such Debt Security. (Section 508)
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1005)
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide that, if such provision is made applicable to the Debt
Securities of any series pursuant to Section 301 of the Applicable Indenture
(which will be indicated in the Applicable Prospectus Supplement), the Company
may elect either (a) to defease and be discharged from any and all obligations
in respect of such Debt Securities then outstanding (including, in the case of
Subordinated Debt Securities, the provisions described under "Subordination of
Subordinated Debt Securities" and except for certain obligations to register
the transfer of or exchange of such Debt Securities, replace stolen, lost or
mutilated Debt Securities, maintain paying agencies and hold monies for payment
in trust) ("defeasance") or (b) to be released from its obligations with
respect to such Debt Securities concerning the restriction on sale or issuance
of Voting Stock of the Company's Principal Subsidiaries described under
"Restriction on Sale or Issuance of Voting Stock of Principal Subsidiaries" and
the subordination provisions described under "Subordination of Subordinated
Debt Securities" and any other covenants applicable to such Debt Securities
which are determined pursuant to Section 301 of the Applicable Indenture to be
subject to covenant defeasance ("covenant defeasance"), and the occurrence of
an event described in clause (b) (insofar as with respect to covenants subject
to covenant defeasance) under "Events of Default" above shall no longer be an
Event of Default, in each case (a) or (b), if the Company deposits, in trust,
with the Trustee money or U.S. Government Obligations, which through the
payment of interest thereon and principal thereof in accordance with their
terms will provide money, in an amount sufficient, without reinvestment, to pay
all the principal of (and premium, if any) and interest on such Debt Securities
on the dates such payments are due (which may include one or more redemption
dates designated by the Company) and any mandatory sinking fund or analogous
payments thereon in accordance with the terms of such Debt Securities. Such a
trust may only be established if, among other things, (i) no Event of Default
or event which with the giving of notice or lapse of time, or both, would
become an Event of Default under the Indenture shall have occurred and be
continuing on the date of such deposit, (ii) such deposit will not cause the
Trustee to have any conflicting interest with respect to other securities of
the Company and (iii) the Company shall have delivered an Opinion of Counsel to
the effect that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit or defeasance and will be
subject to Federal income tax in the same manner as if such defeasance had not
occurred.
The Company may exercise its defeasance option with respect to such Debt
Securities notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its defeasance option, payment of such Debt
Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of such Debt
Securities may not be accelerated by reference to the covenants noted under
clause (b) above. In the event the Company omits to comply with its remaining
obligations with respect to such Debt Securities under the Applicable Indenture
after exercising its covenant
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<PAGE>
defeasance option and such Debt Securities are declared due and payable because
of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations on deposit with the Trustee may be insufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company will
remain liable in respect of such payments. (Article Thirteen and Article
Fourteen of the Senior Indenture and the Subordinated Indenture, respectively.)
MODIFICATION AND WAIVER
Modifications and amendments of each Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority of the
aggregate principal amount of the Outstanding Debt Securities of all series
issued under the Indenture and affected by the modification or amendments
(voting as a single class); provided, however, that no such modification or
amendment may, without the consent of the Holders of all Debt Securities
affected thereby, (i) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debt Security; (ii) reduce the
principal amount of, or the premium, if any, or (except as otherwise provided
in the Applicable Prospectus Supplement) interest on, any Debt Security
(including in the case of an Original Issue Discount Debt Security the amount
payable upon acceleration of the maturity thereof); (iii) change the place or
currency of payment of principal of, premium, if any, or interest on any Debt
Security; (iv) impair the right to institute suit for the enforcement of any
payment on any Debt Security on or after the Stated Maturity thereof (or in the
case of redemption, on or after the Redemption Date); (v) in the case of the
Subordinated Indenture, modify the subordination provisions in a manner adverse
to the Holders of the Subordinated Debt Securities; or (vi) reduce the
percentage of the principal amount of Outstanding Debt Securities of any
series, the consent of whose Holders is required for modification or amendment
of the Indenture or for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults. (Section 902)
The Holders of at least a majority of the aggregate principal amount of the
Outstanding Debt Securities of any series of Senior Debt Securities may, on
behalf of all Holders of that series, waive compliance by the Company with
certain restrictive provisions of the Senior Indenture. (Section 1008) There is
no comparable provision in the Subordinated Indenture. The Holders of a
majority of the aggregate principal amount of the Senior Debt Securities or the
Subordinated Debt Securities may, on behalf of all Holders of the Senior Debt
Securities or the Subordinated Debt Securities, respectively, waive any past
default under the Applicable Indenture, except a default in the payment of
principal, premium or interest or in the performance of certain covenants.
(Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or
transfer or lease its assets substantially as an entirety to any Person and may
not permit any Person to merge into or consolidate with the Company or transfer
or lease its assets substantially as an entirety to the Company, unless (i) any
successor or purchaser is a corporation organized under the laws of the United
States of America, any State or the District of Columbia, and any such
successor or purchaser expressly assumes the Company's obligations on the Debt
Securities under a supplemental Indenture, and (ii) (a) in the case of Senior
Debt Securities, immediately after giving effect to the transaction no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing and (b), in
the case of any series of Subordinated Debt Securities, no Event of Default
that would permit the Trustee or the Holders to accelerate the Company's
obligation to pay the principal of such Subordinated Debt Securities shall have
occurred and be continuing. The Trustee may receive an Opinion of Counsel as
conclusive evidence of compliance with these provisions. (Article Eight)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depositary or its nominee
identified in the Applicable Prospectus Supplement. In such a
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case, one or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of Outstanding Debt Securities of the series to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part
for Debt Securities in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a whole by the Depositary for
such Global Security to a nominee or such Depositary and except in the
circumstances described in the Applicable Prospectus Supplement. (Sections 204
and 305)
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the Applicable Prospectus Supplement.
CONCERNING THE TRUSTEE
Chemical Bank is Trustee under the Indentures. The Trustee performs services
for the Company in the ordinary course of business.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate (the "Preferred Stock"). Certain terms of any
series of the Preferred Stock offered by any Prospectus Supplement will be
described in the Prospectus Supplement relating to such series of the Preferred
Stock. If so indicated in the Prospectus Supplement, the terms of any such
series may differ from the terms set forth below. The description of certain
provisions of the Preferred Stock set forth below and in any Prospectus
Supplement does not purport to be complete and is subject to and qualified in
its entirety by reference to the Certificate of Designation relating to each
series of the Preferred Stock which will be filed with the Commission at or
prior to the time of the offering of such series of Preferred Stock.
GENERAL
Under the Company's Certificate of Incorporation, the Board of Directors of
the Company is authorized without further shareholder action to provide for the
issuance of up to 10,000,000 shares of preferred stock, without par value, in
one or more series, with such voting powers and with such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions, as shall be set forth in
resolutions providing for the issue thereof adopted by the Board of Directors
or a duly authorized committee thereof. The Company may amend from time to time
its Certificate of Incorporation to increase the number of authorized shares of
preferred stock. Any such amendment would require the approval of the holders
of a majority of the outstanding shares of Common Stock, and the approval of
the holders of a majority of the outstanding shares of all series of preferred
stock voting together as a single class. As of the date of this Prospectus, the
Company has two series of preferred stock outstanding, which are described
below under "Outstanding Preferred Stock". In addition, 1,500,000 shares of a
series of preferred stock designated as Series A Junior Participating Preferred
Stock were reserved for issuance as provided in the Shareholders' Rights Plan.
See "Description of Common Stock--Rights Plan."
Under regulations adopted by the Federal Reserve Board, if the holders of any
series of Preferred Stock become entitled to vote for the election of directors
because dividends on such series are in arrears as described under "Voting
Rights" below, such series may then be deemed a "class of voting securities"
and a holder of 25 percent or more of such series (or a holder of 5 percent or
more if it otherwise exercises a "controlling influence" over the Company) may
then be subject to regulation as a bank holding company in accordance with the
BHCA. In addition, at such time as such series is deemed a class of voting
securities, (i) any other bank holding company may be required to obtain the
prior approval of the Federal Reserve Board under the BHCA to acquire or retain
5 percent or more of such series and (ii) any person other than a bank holding
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company may be required to obtain the prior approval of the Federal Reserve
Board under the Change in Bank Control Act to acquire or retain 10 percent or
more of such series.
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in the Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the title
and stated value per share of such Preferred Stock and the number of shares
offered; (ii) the price at which such Preferred Stock will be issued; (iii) the
dividend rate (or method of calculation), the dates on which dividends shall be
payable, whether such dividends shall be cumulative or noncumulative and, if
cumulative, the dates from which dividends shall commence to cumulate; (iv) any
redemption or sinking fund provisions of such Preferred Stock; and (v) any
additional dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions of such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of the Preferred Stock, each series of the Preferred Stock
will rank on a parity in all respects with the outstanding preferred stock of
the Company and each other series of the Preferred Stock. See "Outstanding
Preferred Stock" below.
DIVIDEND RIGHTS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of
assets of the Company legally available therefor, cash dividends at such rates
and on such dates as are set forth in the Prospectus Supplement relating to
such series of the Preferred Stock. Such rate may be fixed or variable or both.
Each such dividend will be payable to the holders of record as they appear on
the stock books of the Company on such record dates as will be fixed by the
Board of Directors of the Company or a duly authorized committee thereof.
Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the Prospectus Supplement relating thereto. If
the Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company shall
have no obligation to pay the dividend accrued for that period, whether or not
dividends are declared for any future period.
No full dividends will be declared or paid or set apart for payment on the
Preferred Stock of any series ranking, as to dividends, on a parity with or
junior to any series of preferred stock for any period unless full dividends
have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof set apart for such payment, on such series
of preferred stock for the then-current dividend payment period and, if such
preferred stock is cumulative, all other dividend payment periods terminating
on or before the date of payment of such full dividends. When dividends are not
paid in full upon any series of the Preferred Stock and any other preferred
stock ranking on a parity as to dividends with such series of the Preferred
Stock, all dividends declared upon such series of the Preferred Stock and any
other preferred stock ranking on a parity as to dividends will be declared pro
rata so that the amount of dividends declared per share on such series of the
Preferred Stock and such other preferred stock will in all cases bear to each
other the same ratio that accrued dividends per share on such series of the
Preferred Stock and such other preferred stock bear to each other. Except as
provided in the preceding sentence, unless full dividends, including, in the
case of cumulative Preferred Stock, accumulations, if any, in respect of prior
dividend payment periods, on all outstanding shares of any series of the
Preferred Stock have been paid, no dividends (other than in shares of Common
Stock or another stock ranking junior to such series of the Preferred Stock as
to dividends and upon liquidation) will be declared or paid or set aside for
payment or other distributions made upon the Common Stock or any other stock of
the Company ranking junior to or on a parity with the Preferred Stock as to
dividends or upon liquidation, nor will any Common Stock or any other stock of
the Company ranking junior to or on a parity with such series of the Preferred
Stock as to dividends or upon
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liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Company. No interest, or sum
of money in lieu of interest, shall be payable in respect of any dividend
payment or payments which may be in arrears.
The amount of dividends payable for each dividend period will be computed by
annualizing the applicable dividend rate and dividing by the number of dividend
periods in a year, except that the amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period shall be
computed on the basis of 30-day months, a 360-day year and the actual number of
days elapsed in the period.
Each series of Preferred Stock will be entitled to dividends as described in
the Prospectus Supplement relating to such series, which may be based upon one
or more methods of determination. Different series of the Preferred Stock may
be entitled to dividends at different rates or based upon different methods of
determination.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Stock will
be entitled to receive out of assets of the Company available for distribution
to shareholders, before any distribution of assets is made to holders of Common
Stock or any other class of stock ranking junior to such series of the
Preferred Stock upon liquidation, liquidating distributions in the amount set
forth in the Prospectus Supplement relating to such series of the Preferred
Stock plus an amount equal to accrued and unpaid dividends for the then-current
dividend period and, if such series of the Preferred Stock is cumulative, for
all dividend periods prior thereto. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable with
respect to the Preferred Stock of any series and any other shares of stock of
the Company ranking as to any such distribution on a parity with such series of
the Preferred Stock are not paid in full, the holders of the Preferred Stock of
such series and of such other shares will share ratably in any such
distribution of assets of the Company in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of such series of Preferred Stock will have no right or claim to any of the
remaining assets of the Company. Neither the sale of all or substantially all
of the property or business of the Company nor the merger or consolidation of
the Company into or with any other corporation shall be deemed to be a
dissolution, liquidation or winding up, voluntarily or involuntarily, of the
Company.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or in part, at
the option of the Company, and may be subject to mandatory redemption pursuant
to a sinking fund, in each case upon terms, at the times and at the redemption
prices set forth in the Prospectus Supplement relating to such series.
The Prospectus Supplement relating to a series of Preferred Stock which is
subject to mandatory redemption shall specify the number of shares of such
series of Preferred Stock which shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to any accrued and unpaid dividends
thereon to the date of redemption. The redemption price may be payable in cash,
capital stock or in cash received from the net proceeds of the issuance of
capital stock of the Company, as specified in the Prospectus Supplement
relating to such series of Preferred Stock.
If fewer than all the outstanding shares of the Preferred Stock are to be
redeemed, whether by mandatory or optional redemption, the selection of the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors of the Company (or a duly authorized
committee thereof) or by any other method which may be determined by the Board
of Directors (or such committee) to be equitable.
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From and after the redemption date (unless default shall be made by the Company
in providing for the payment of the redemption price), dividends shall cease to
accrue on the shares of Preferred Stock called for redemption and all rights of
the holders thereof (except the right to receive the redemption price) shall
cease.
In the event that full dividends, including accumulations in the case of
cumulative Preferred Stock, on any series of the Preferred Stock have not been
paid, such series of the Preferred Stock may not be redeemed in part and the
Company may not purchase or acquire any shares of such series of the Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of such series of the Preferred Stock.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of Preferred Stock, or except as expressly required by
applicable law, the holders of the Preferred Stock will not be entitled to
vote. Except as indicated in the Prospectus Supplement relating to a particular
series of Preferred Stock, each such share will be entitled to one vote on
matters on which holders of such series of the Preferred Stock are entitled to
vote.
If the equivalent of six quarterly dividends payable on any series of the
Preferred Stock or any other series of preferred stock are in default, the
number of directors of the Company will be increased by two and the holders of
all outstanding series of preferred stock, voting as a single class without
regard to series, will be entitled to elect such additional two directors until
all dividends in default have been paid or declared and set apart for payment.
Each director elected by the holders of shares of the Preferred Stock shall
continue to serve as such director for the full term for which he or she shall
have been elected, notwithstanding that prior to the end of such term such
default shall cease to exist.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of any series of Preferred Stock, voting as a class, will be
required for any amendment of the Company's Certificate of Incorporation (or
any certificate amendatory thereof or supplemental thereto relating to any
series of the Preferred Stock) which will adversely affect the powers,
preferences, privileges or rights of such series of the Preferred Stock. The
affirmative vote or consent of the holders of shares representing at least 66
2/3% of the outstanding shares of any series of Preferred Stock and any other
series of preferred stock of the Company ranking on a parity with such series
of the Preferred Stock as to dividends or upon liquidation, voting as a single-
class without regard to series, will be required to authorize the creation or
issuance of, or reclassify any authorized stock of the Company into, or issue
or authorize any obligation or security convertible into or evidencing a right
to purchase, any additional class or series of stock ranking prior to such
series of the Preferred Stock as to dividends or upon liquidation.
In addition to the foregoing voting rights, under the Delaware General
Corporation Law as now in effect, the holders of the Preferred Stock will have
the voting rights set forth under "General" above with respect to amendments to
the Company's Certificate of Incorporation which would increase the number of
authorized shares of preferred stock of the Company.
DEPOSITARY SHARES
General. The Company may, at its option, elect to offer fractional shares
("Depositary Shares") of Preferred Stock, rather than full shares of Preferred
Stock. In the event such option is exercised, the Company will issue to the
public receipts for Depositary Shares, each of which will represent a fraction
(to be set forth in the Prospectus Supplement relating to a particular series
of Preferred Stock) of a share of a particular series of Preferred Stock as
described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected
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by the Company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000 (the "Depositary").
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will be entitled, in proportion to the applicable fraction of a share of
Preferred Stock represented by such Depositary Share, to all the rights and
preferences of the Preferred Stock represented thereby (including dividend,
voting, redemption and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to such exhibits.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will
be exchangeable for definitive Depositary Receipts at the Company's expense.
Dividends and Other Distributions. The Depositary will distribute all cash
dividends or other cash distributions received in respect of the Preferred
Stock to the record holders of Depositary Shares relating to such Preferred
Stock in proportion to the numbers of such Depositary Shares owned by such
holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
Redemption of Depositary Shares. If a series of Preferred Stock represented
by Depositary Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of such series of Preferred Stock held by the
Depositary. The redemption price per Depositary Share will be equal to the
applicable fraction of the redemption price per share payable with respect to
such series of the Preferred Stock. Whenever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares representing shares of
Preferred Stock so redeemed. If fewer than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by lot or pro
rata as may be determined by the Depositary.
Voting the Preferred Stock. Upon receipt of notice of any meeting at which
the holders of the Preferred Stock are entitled to vote, the Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such Preferred Stock. Each record holder
of such Depositary Shares on the record date (which will be the same date as
the record date for the Preferred Stock) will be entitled to instruct the
Depositary as to the exercise of the voting rights pertaining to the amount of
the Preferred Stock represented by such holder's Depositary Shares. The
Depositary will endeavor, insofar as practicable, to vote the amount of the
Preferred Stock represented by such Depositary Shares in accordance with such
instructions, and the Company will agree to take all action which may be deemed
necessary by the Depositary in order to enable the Depositary to do so. The
Depositary will abstain from voting shares of the Preferred Stock to the extent
it does not receive specific instructions from the holder of Depositary Shares
representing such Preferred Stock.
Amendment and Termination of the Deposit Agreement. The form of Depositary
Receipt evidencing the Depositary Shares and any provision of the Deposit
Agreement may at any time be amended by agreement between the Company and the
Depositary. However, any amendment which materially and adversely alters the
rights of the holders of Depositary Shares will not be effective unless such
amendment has been approved
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by the holders of at least a majority of the Depositary Shares then
outstanding. The Deposit Agreement will only terminate if (i) all outstanding
Depositary Shares have been redeemed or (ii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Receipts.
Charges of Depositary. The Company will pay all transfer and other taxes and
governmental charges arising solely from the existence of the depositary
arrangements. The Company will pay charges of the Depositary in connection with
the initial deposit of the Preferred Stock and any redemption of the Preferred
Stock. Holders of Depositary Receipts will pay other transfer and other taxes
and governmental charges and such other charges as are expressly provided in
the Deposit Agreement to be for their accounts.
Miscellaneous. The Depositary will forward all reports and communications
from the Company which are delivered to the Depositary and which the Company is
required or otherwise determines to furnish to the holders of the Preferred
Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or upon information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Receipts or other
persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary. The Depositary may resign at any time
by delivering to the Company notice of its election to do so, and the Company
may at any time remove the Depositary, any such resignation or removal to take
effect upon the appointment of a successor Depositary and its acceptance of
such appointment. Such successor Depositary must be appointed within 60 days
after delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
OUTSTANDING PREFERRED STOCK
The following is a brief description of the preferred stock with Cumulative
and Adjustable Dividends (the "Adjustable Preferred") and the 9.30% Cumulative
Preferred Stock (the "9.30% Cumulative Preferred"), the only series of
preferred stock of the Company outstanding. The Adjustable Preferred and the
9.30% Cumulative Preferred have preference over the Common Stock with respect
to the payment of dividends and the distribution of assets in the event of
liquidation, dissolution or winding up of the Company. As of September 30,
1993, 700,000 shares of Adjustable Preferred and 575,000 shares of 9.30%
Cumulative Preferred were issued and outstanding, respectively.
Dividends on the outstanding Adjustable Preferred and 9.30% Cumulative
Preferred are cumulative. The dividend rate on the Adjustable Preferred is
established quarterly at the rate of 2.25 percent below the highest of (a) the
three-month U.S. Treasury Bill rate, (b) the U.S. Treasury ten-year constant
maturity rate and (c) the U.S. Treasury twenty-year constant maturity rate, in
each case as defined in the terms of the Adjustable Preferred, but may not be
less than 6 percent per annum or greater than 12 percent per annum.
If the equivalent of six quarterly dividends payable on one or more series of
Preferred Stock, including the Adjustable Preferred and 9.30% Cumulative
Preferred, are in default, the number of directors of the Company will be
increased by two and the holders of all outstanding series of Preferred Stock,
voting as a single class without regard to series, will be entitled to elect
two additional directors until all accrued dividends have been paid. In
addition, the vote of the holders of two-thirds of the Adjustable Preferred and
the 9.30% Cumulative Preferred, each voting as a separate class, is required in
order to amend or alter the
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Certificate of Incorporation in a manner which would adversely affect the
preferences, rights, powers or privileges of the Adjustable Preferred and the
9.30% Cumulative Preferred, respectively, and the vote of the holders of two-
thirds of the Adjustable Preferred, the 9.30% Cumulative Preferred and all of
the series of Preferred Stock ranking on a parity with the Adjustable Preferred
and the 9.30% Cumulative Preferred, voting together as a single class, is
required in order to reclassify stock of the Company into stock ranking prior
to the Adjustable Preferred and the 9.30% Cumulative Preferred, or authorize
the creation or issuance of stock, or of a security convertible into or
evidencing a right to purchase stock, ranking prior to the Adjustable Preferred
and the 9.30% Cumulative Preferred.
In the event of any liquidation, dissolution or winding up of the Company,
the holders of the Adjustable Preferred are entitled to receive $50.00 per
share plus accrued and unpaid dividends and the holders of the 9.30% Cumulative
Preferred are entitled to receive $250.00 per share plus accrued and unpaid
dividends. Shares of Adjustable Preferred may be redeemed at the option of the
Company at a redemption price per share of $50.00 per share, plus accrued and
unpaid dividends.
The shares of 9.30% Cumulative Preferred are represented by Depositary
Shares. The Depositary Shares represent a one-tenth interest in a share of
9.30% Cumulative Preferred and are not subject to any mandatory redemption or
sinking fund provisions. The 9.30% Cumulative Preferred will be redeemable on
at least 30 but not more than 60 days notice, at the option of the Company, as
a whole or in part, at any time on and after October 15, 1997 at a redemption
price equal to $250 per share plus accrued and unpaid dividends.
TRANSFER AGENT AND REGISTRAR
Chemical Bank will be the transfer agent, registrar and dividend disbursement
agent for the Preferred Stock. The registrar for shares of Preferred Stock will
send notices to shareholders of any meetings at which holders of the Preferred
Stock have the right to elect directors of the Company or to vote on any other
matter.
DESCRIPTION OF COMMON STOCK
General. The authorized capital stock of the Company consists of 150,000,000
shares of Common Stock. As of September 30, 1993, there were issued 94,351,913
shares of Common Stock (including 31,426 shares of Common Stock held in the
Company's treasury).
As of December 31, 1993, approximately 7,725,000 shares of Common Stock were
reserved for issuance upon the exercise of outstanding stock options under
various employee incentive and purchase plans, 13,500,966 shares of Common
Stock were reserved for issuance pursuant to the Company's dividend
reinvestment and stock purchase plans and an aggregate of 16,080,746 shares of
Common Stock were reserved for issuance upon consummation of certain
acquisitions. In connection with the settlement of certain litigation, the
Company entered into a Warrant Agreement between the Company and Chemical Bank
as Warrant agent, dated as of January 7, 1994, which provides for the issuance
of up to 1,329,115 shares of Common Stock pursuant to the terms and conditions
contained herein.
The following description contains a summary of all the material features of
the Common Stock but does not purport to be complete and is subject in all
respects to the applicable provisions of the Delaware General Corporation Law
and is qualified in its entirety by reference to the Restated Certificate of
Incorporation of the Company Certificate, including the terms of the Rights
Agreement (the "Rights Agreement"), dated as of February 28, 1989, described
below. A copy of each of the Certificate and the Rights Agreement is
incorporated in this Prospectus by reference.
Common Stock. The holders of Common Stock are entitled to dividends when and
as declared by the Company's Board of Directors out of funds legally available
therefor. Each series of the Company Preferred Stock has preference over the
Common Stock with respect to the payment of dividends. The Company is also
subject to certain regulatory restrictions on the payment of dividends. See
"Regulatory Matters--Regulatory Restrictions on Dividends."
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The holders of Common Stock are entitled to one vote for each share held on
all matters as to which shareholders are entitled to vote. The Common Stock is
the only security of the Company entitled to vote for directors, unless and
until the Company is in default on the equivalent of six quarterly dividends
payable on any series of Preferred Stock. See "Description of Preferred Stock."
Except as otherwise provided in the resolution providing for the issue of any
series of Preferred Stock, in the event of any liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, after payment
shall have been made to the holders of all series of Preferred Stock of the
full preferential amounts to which such holders are entitled, the holders of
shares of Common Stock shall be entitled, to the exclusion of the holders of
Preferred Stock, to share, ratably according to the number of shares of Common
Stock held by them, in all remaining assets of the Company available for
distribution to its shareholders.
Certain business combinations involving the Company and any beneficial owner
of 10 percent or more of the outstanding voting stock of the Company, any
affiliate of the Company or any affiliate of such owner must be approved by the
holders of 80 percent of the outstanding voting stock, unless approved by a
majority of continuing directors or certain minimum price and procedural
requirements are met. These provisions may have the effect of delaying,
deferring or preventing a change in control of the Company.
Holders of Common Stock are not entitled to cumulative voting rights, or any
preemptive, preferential or subscriptive rights with respect to any securities
of the Company, except as described below under "Rights Plan." Outstanding
shares of Common Stock are fully paid and nonassessable. Chemical Bank is the
transfer agent, registrar and dividend disbursement agent for Common Stock.
Rights Plan. On February 28, 1989, the Board of Directors of the Company
declared a dividend distribution of one right (a "Right") for each outstanding
share of Common Stock to shareholders of record at the close of business on
March 13, 1989. Subsequent to that date and prior to the occurrence of a
Distribution Date (described below), Rights shall be deemed to be delivered
with each share of Common Stock issued by the Company, including in connection
with the issuance of any shares of Common Stock hereunder. Each Right entitles
the registered holder to purchase from the Company a unit consisting of one
one-hundredth of a share (a "Unit") of Series A Preferred, at a Purchase Price
of $100 per Unit, subject to adjustment. The description and terms of the
Rights are summarized below and are set forth in the Rights Agreement between
the Company and Manufacturers Hanover Trust Company, as Rights Agent.
At the present time, the Rights are attached to all Common Stock certificates
representing outstanding shares, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earliest of (i) 10 business days following a public
announcement that a person or group of affiliated or associated persons (as
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20 percent or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), (ii) 10 business days (or such later date as may be
determined by the Board of Directors of the Company) following the commencement
of a tender offer or exchange offer that would result in a person or group
beneficially owning 20 percent or more of such outstanding shares of Common
Stock and (iii) 10 business days following the determination by the Board of
Directors of the Company upon a determination of at least a majority of the
unaffiliated "Continuing Directors" who are not officers of the Company, that,
with respect to any person who has, alone or together with his affiliates or
associates, become the beneficial owner of 10 percent or more of the shares of
Common Stock outstanding (a) such beneficial ownership by such person is
intended to cause the Company to repurchase the Common Stock beneficially owned
by such person or to cause pressure on the Company to take action or enter into
a transaction or series of transactions intended to provide such person with
short-term financial gain under circumstances where such Directors determine
that the best long-term interests of the Company and its shareholders would not
be served by taking such action or entering into such transactions or series of
transactions at that time or (b) such beneficial ownership is causing or
reasonably likely to cause a material adverse impact (including, but not
limited to, impairment of relationships with customers, impairment of the
Company's ability to maintain its competitive position or impairment of the
Company's business reputation
23
<PAGE>
or ability to deal with governmental agencies) on the business or prospects of
the Company (any such person being referred to herein and in the Rights
Agreement as an "Adverse Person").
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on March 13, 1999 unless earlier redeemed by the Company
as described below.
In the event that (i) a person becomes the beneficial owner of 20 percent or
more of the then outstanding shares of Common Stock (except pursuant to an
offer for all outstanding shares of Common Stock which a majority of the
unaffiliated Continuing Directors who are not officers of the Company
determines to be fair to and otherwise in the best interests of the Company and
its shareholders), or (ii) the Board of Directors determines, upon the
determination by at least a majority of the unaffiliated Continuing Directors
who are not officers of the Company, that a person is an Adverse Person, each
holder of a Right will thereafter have the right to receive upon exercise
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value (based on the lowest closing price of the Common
Stock during the twelve-month period preceding such event) equal to two times
the exercise price of the Right. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person or Adverse Person
will be null and void. However, Rights are not exercisable following the
occurrence of either of the events set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
In the event that, at any time following the Stock Acquisition Date or the
determination that someone is an Adverse Person (i) the Company is acquired in
a merger or other business combination transaction in which the Company is not
the surviving company or in which it is the surviving company but the Common
Stock is changed or exchanged (other than a merger which follows an offer
described in the preceding paragraph) or (ii) more than 50 percent of the
Company's assets, cash flow or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the exercise price
of the Right. The events set forth in this paragraph and in the preceding
paragraph are referred to as the "Triggering Events".
In general, at any time until 10 business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem the
Rights will require the concurrence of a majority of the Continuing Directors.
The Company may not redeem the Rights if the Board of Directors has previously
declared a person to be an Adverse Person. Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the $.01
redemption price.
The term "Continuing Directors" means any member of the Board of Directors of
the Company who was a member of the Board prior to the date of the Rights
Agreement, and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing Directors,
but will not include an Acquiring Person, an Adverse Person, or an affiliate or
associate of any such Person or any representative of any of the foregoing.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company including, without limitation, the right to
vote or to receive dividends.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors prior to the Distribution Date. After the Distribution Date,
the provisions of the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors) in order to
cure any ambiguity, to make
24
<PAGE>
changes which do not adversely affect the interest of holders of Rights, or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner defined as a Triggering Event unless the offer is conditioned on a
substantial number of Rights being acquired. The Rights, however, should not
affect any prospective offeror willing to make an offer for all outstanding
shares of Common Stock and other voting securities at a fair price and
otherwise in the best interests of the Company and its shareholders as
determined by the Board of Directors or affect any prospective offeror willing
to negotiate with the Board of Directors. The Rights should not interfere with
any merger or other business combination approved the Board of Directors since
the Board of Directors may, at its option, at any time until ten business days
following the Stock Acquisition Date, redeem all, but not less than all, of the
then outstanding Rights at the $.01 redemption price.
PLAN OF DISTRIBUTION
The Company may offer and sell Offered Securities to one or more
underwriters, acting as principals for their own accounts or as agents, for
public offering and sale by them or may sell Offered Securities to investors
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Offered Securities will be named in the related Prospectus
Supplement. The Company may also offer and sell Offered Securities to certain
third parties upon the exercise of options or on behalf of such third parties.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company also may, from time to time, authorize
underwriters acting as agents to offer and sell the Offered Securities upon the
terms and conditions set forth in any Prospectus Supplement. In connection with
the sale of Offered Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting discounts,
concessions or commissions and may also receive commissions from purchasers of
Offered Securities for whom they may act as agents. Underwriters may sell
Offered Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions (which may be
changed from time to time) from the underwriters and/or from the purchasers for
whom they may act as agents.
The Offered Securities will be new issues of securities with no established
trading market, other than the Common Stock which are listed on the New York
Stock Exchange. Any Common Stock sold pursuant to a Prospectus Supplement will
be listed on such exchange, subject to official notice of issuance. It has not
presently been established whether the underwriters, if any, of any Offered
Securities will make a market in such Offered Securities. If a market is made,
it may be discontinued at any time without notice. No assurance can be given as
to the liquidity of the trading market for the Offered Securities.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Securities and any discounts,
concessions or commissions allowed by underwriters to participating dealers
will be set forth in the Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Offered Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Offered Securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Under agreements that may be entered into with the Company, underwriters,
dealers and agents who participate in the distribution of the Offered
Securities may be entitled to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act or
contribution with respect to payments which the underwriters, dealers or agents
may be required to make in respect thereof.
25
<PAGE>
Certain of the underwriters and their affiliates may be customers of, engage
in transactions with, and perform services for, the Company and its
subsidiaries and the Trustee in the ordinary course of business.
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities will be passed upon for the Company by
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York
10022, counsel to the Company, and for any underwriters by counsel named in the
applicable Prospectus Supplement.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K of the Company for the year ended December 31, 1992
have been so incorporated in reliance upon the report of Price Waterhouse,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
26
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
All of the expenses listed below are estimated except for the SEC
registration fee. The itemized statement below includes all expenses in
connection with this offering other than underwriting discounts and
commissions.
<TABLE>
<S> <C>
SEC registration fee............................................... $218,750
Accountants' fees and expenses..................................... 25,000
Legal fees and expenses............................................ 150,000
Blue Sky fees and expenses......................................... 25,000
Trustees' fees .................................................... 16,000
Rating agency fees................................................. 180,000
Printing expenses.................................................. 110,000
Miscellaneous...................................................... 10,250
--------
Total............................................................ 735,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"),
if they acted in good faith and in a manner they 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 their
conduct was unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement
of such action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, shareholder vote, agreement or otherwise. Sections
14 through 24 of the Company's By-laws provide for the indemnification of its
directors and officers as authorized by Section 145 of the Delaware General
Corporation Law.
Article Fifth of the Company's Restated Certificate of Incorporation provides
that no director of the Company shall be personally liable to the Company or
its shareholders for monetary damages for any breach of his fiduciary duty as a
director except for liability (1) for any breach of the director's duty of
loyalty to the Company or its shareholders, (2) for acts or omissions that are
not in good faith or involve intentional misconduct or a knowing violation of
the law, (3) under Section 174 of the Delaware General Corporation Law or (4)
for any transaction from which the director derived an improper personal
benefit.
The directors and officers of the Company and its subsidiaries are insured
(subject to certain exceptions and deductions) against liabilities which they
may incur in their capacity as such, including liabilities under the Securities
Act, under liability insurance policies carried by the Company. In addition,
the Company has entered into indemnification agreements with the directors of
the Company which provide that the Company will honor its obligations pursuant
to its By-laws within 30 days of written demand and will, under certain
circumstances, provide security for its obligations to indemnify. Section 8(k)
of the Federal Deposit Insurance Act prohibits or limits certain types of
indemnification payments to directors and officers as well as other employees
and individuals who are "institution-affiliated parties".
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1(a) --Form of Underwriting Agreement for the Debt Securities.*
1(b) --Form of Underwriting Agreement for the Preferred Stock.*
1(c) --Form of Underwriting Agreement for the Common Stock.*
3(a) --Restated Certificate of Incorporation, previously filed and
incorporated by reference to the Company's Registration Statement on
Form S-4 (file no. 33-17765) filed October 7, 1987.
3(b) --By-laws, as amended, previously filed and incorporated by reference
to the Company's Registration Statement on Form S-4 (file no. 33-
17765) filed October 7, 1987.
3(c) --By-laws, as amended, previously filed and incorporated by reference
to the Company's Quarterly Report on Form 10-Q filed November 12,
1993.
4(a) --Form of Indenture between Shawmut National Corporation and Chemical
Bank, as trustee, including forms of securities, relating to the
Senior Debt Securities.*
4(b) --Form of Indenture between Shawmut National Corporation and Chemical
Bank, as trustee, including forms of securities, relating to the
Subordinated Debt Securities.*
4(c) --Shareholder Rights Plan, previously filed and incorporated by
reference to the Company's Registration Statement on Form 8-A (file
no. 1-10102) filed March 7, 1989.
4(d) --Designation of Adjustable Rate Preferred Stock, previously filed and
incorporated by reference to the Company's Registration Statement on
Form S-4 (file no. 33-17765) filed October 7, 1987.
4(e) --Designation of 9.30% Cumulative Preferred Stock, previously filed
and incorporated by reference to the Company's Current Report on
Form 8-K dated October 27, 1992.
4(f) --Certificate of Correction of Certificate of Designation of 9.30%
Cumulative Preferred Stock, previously filed and incorporated by
reference to Exhibit No. 4 to the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1992.
4(g) --Amended Certificate of Designation of the 9.30% Cumulative Preferred
Stock, previously filed and incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1992.
4(h) --Form of Depositary Receipt evidencing Depositary Shares.*
4(i) --Form of Deposit Agreement.*
5 --Opinion of Skadden, Arps, Slate, Meagher & Flom.*
5(a) --Opinion of Skadden, Arps, Slate, Meagher & Flom regarding Common
Stock.
12 --Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividend
Requirements.*
23(a) --Consent of Price Waterhouse, Hartford, Connecticut.
23(b) --Consent of Skadden, Arps, Slate, Meagher & Flom (included in
Exhibits 5 and 5(a)).
23(c) --Consent of Price Waterhouse, Boston, Massachusetts.
23(d) --Consent of Ernst & Young, Worcester, Massachusetts.
23(e) --Consent of Ernst & Young, Hartford, Connecticut.
24 --Powers of Attorney.*
25(a) --Form T-1 Statement of Eligibility of the Senior Trustee.*
25(b) --Form T-1 Statement of Eligibility of the Subordinated Trustee.*
</TABLE>
- --------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the 1934 Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
1934 Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the 1934 Act) that is incorporated
by reference in the registration statement 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant
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
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant 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 registrant 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.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS POST-EFFECTIVE
AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HARTFORD, STATE OF
CONNECTICUT, ON FEBRUARY , 1994.
Shawmut National Corporation
*
By:___________________________________
JOEL B. ALVORD
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS POST-
EFFECTIVE AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW
BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON FEBRUARY , 1994.
SIGNATURE TITLE
* Chairman, Chief Executive Officer and
____________________________________ Director (Principal Executive
(JOEL B. ALVORD) Officer)
* President, Chief Operating Officer
____________________________________ and Director
(GUNNAR S. OVERSTROM, JR.)
/s/ Bharat Bhatt Chief Financial Officer (Principal
____________________________________ Financial Officer and Principal
(BHARAT BHATT) Accounting Officer)
* Director
____________________________________
(STILLMAN B. BROWN)
* Director
____________________________________
(JOHN T. COLLINS)
* Director
____________________________________
(FERDINAND COLLOREDO-MANSFELD)
Director
____________________________________
(BERNARD M. FOX)
* Director
____________________________________
(HERBERT W. JARVIS)
* Director
____________________________________
(ROBERT J. MATURA)
* Director
____________________________________
(LOIS D. RICE)
* Director
____________________________________
(MAURICE SEGALL)
* Director
____________________________________
(PAUL R. TREGURTHA)
* Director
____________________________________
(WILSON WILDE)
/s/ Raymond A. Guenter
*By: _______________________________
(RAYMOND A. GUENTER, ATTORNEY-
IN-FACT)
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS Page
-------- ----
<C> <S> <C>
1(a) --Form of Underwriting Agreement for the Debt Securities.*.......
1(b) --Form of Underwriting Agreement for the Preferred Stock.*.......
1(c) --Form of Underwriting Agreement for the Common Stock.*..........
3(a) --Restated Certificate of Incorporation, previously filed and
incorporated by reference to the Company's Registration
Statement on Form S-4 (file no. 33-17765) filed October 7,
1987...........................................................
3(b) --By-laws, as amended, previously filed and incorporated by
reference to the Company's Registration Statement on Form S-4
(file no. 33-17765) filed October 7, 1987.
3(c) --By-laws, as amended, previously filed and incorporated by
reference to the Company's Quarterly Report on Form 10-Q filed
November 12, 1993..............................................
4(a) --Form of Indenture between Shawmut National Corporation and
Chemical Bank, as trustee, including forms of securities,
relating to the Senior Debt Securities.*.......................
4(b) --Form of Indenture between Shawmut National Corporation and
Chemical Bank, as trustee, including forms of securities,
relating to the Subordinated Debt Securities.*.................
4(c) --Shareholder Rights Plan, previously filed and incorporated by
reference to the Company's Registration Statement on Form 8-A
(file no. 1-10102) filed March 7, 1989.........................
4(d) --Designation of Adjustable Rate Preferred Stock, previously
filed and incorporated by reference to the Company's
Registration Statement on Form S-4 (file no. 33-17765) filed
October 7, 1987................................................
4(e) --Designation of 9.30% Cumulative Preferred Stock, previously
filed and incorporated by reference to the Company's Current
Report on Form 8-K dated October 27, 1992......................
4(f) --Certificate of Correction of Certificate of Designation of
9.30% Cumulative Preferred Stock, previously filed and
incorporated by reference to Exhibit No. 4 to the Company's
Quarterly Report on Form 10-Q for the period ended September 30,
1992...........................................................
4(g) --Amended Certificate of Designation of the 9.30% Cumulative
Preferred Stock, previously filed and incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992..............................................
4(h) --Form of Depositary Receipt evidencing Depositary Shares.*......
4(i) --Form of Deposit Agreement.*....................................
5 --Opinion of Skadden, Arps, Slate, Meagher & Flom.*..............
5(a) --Opinion of Skadden, Arps, Slate, Meagher & Flom regarding
Common Stock...................................................
12 --Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividend
Requirements.*.................................................
23(a) --Consent of Price Waterhouse, Hartford, Connecticut.............
23(b) --Consent of Skadden, Arps, Slate, Meagher & Flom (included in
Exhibits 5 and 5(a))...........................................
23(c) --Consent of Price Waterhouse, Boston, Massachusetts.............
23(d) --Consent of Ernst & Young, Worcester, Massachusetts.............
23(e) --Consent of Ernst & Young, Hartford, Connecticut................
24 --Powers of Attorney.*...........................................
25(a) --Form T-1 Statement of Eligibility of the Senior Trustee.*......
25(b) --Form T-1 Statement of Eligibility of the Subordinated
Trustee.*......................................................
</TABLE>
- --------
* Previously filed.
<PAGE>
(LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM APPEARS HERE)
February 8, 1994
Board of Directors
Shawmut National Corporation
777 Main Street
Hartford, Connecticut 06115
Re: Shawmut National Corporation
Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as special counsel to Shawmut National Corporation, a
Delaware corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-3 (together with any amendments thereto, the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission (the "Commission"). The Registration Statement relates to the
issuance and sale from time to time, pursuant to Rule 415 of the General Rules
and Regulations promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), of the following securities of the Company with an aggregate
initial public offering price of up to $700,000,000 as shall be designated by
the Company: (i) debt securities, which may be either unsecured senior debt
securities or unsecured subordinated debt securities, (ii) shares of its
preferred stock, no par value, which may be offered in fractional shares
evidenced by depositary receipts issued pursuant to a deposit agreement; and
(iii) shares of its common stock, $.01 par value (the "Common Stock"), together
with an equal number of rights to purchase units of Series A Junior
Participating Preferred Stock associated therewith (the "Rights").
<PAGE>
Shawmut National Corporation
February 8, 1994
Page 2
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act in connection with Post-
Effective Amendment No. 2 to the Registration Statement.
We have examined (i) the Registration Statement declared effective by
the Commission on October 29, 1992; (ii) Post-Effective Amendment No. 1 to the
Registration Statement filed with the Commission on December 6, 1993; (iii)
Post-Effective Amendment No. 2 to the Registration Statement filed with the
Commission on the date hereof; (iv) the form of certificates to be used to
represent the Common Stock (and the Rights); (v) the Certificate of
Incorporation and By-Laws of the Company, as amended to date; (vi) resolutions
adopted by the Board of Directors of the Company relating to the issuance of the
shares of Common Stock and the Rights; and (vii) the Rights Agreement, dated as
of February 28, 1989 (the "Rights Agreement"), between the Company and
Manufacturers Hanover Trust Company, as Rights Agent. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such records of the Company and such agreements, certificates of public
officials, certificates of officers or other representatives of the Company and
others, and such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity for all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect of such documents
of such parties. As to any facts material to the opinions ex-
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Shawmut National Corporation
February 8, 1994
Page 3
pressed herein which were not independently established or verified, we have
relied upon oral or written statements or representations of officers and other
representatives of the Company and others.
Members of our firm are admitted to the Bar in the State of Delaware
and we do not express any opinion as to the laws of any other jurisdiction other
than the laws of the United States of America to the extent referred to
specifically herein. The Common Stock, together with the Rights, may be issued
from time to time on a delayed or continuous basis, and this opinion is limited
to the laws, including the rules and regulations, as in effect on the date
hereof.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been organized, and is subsisting and in good
standing, as a corporation under the laws of the State of Delaware.
2. With respect to any offering of Common Stock, when (i) the
Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective; (ii) an appropriate Prospectus
Supplement with respect to the Common Stock has been prepared, delivered and
filed in compliance with the Securities Act and the applicable rules and
regulations thereunder; (iii) if the Common Stock is to be sold pursuant to a
firm commitment underwritten offering, the Underwriting Agreement with respect
to the Common Stock has been duly authorized, executed and delivered by the
Company and the other parties thereto; (iv) the Board, including any appropriate
committee appointed thereby, and appropriate officers of the Company have taken
all necessary corporate action to approve the issuance of the Common Stock and
the Rights and related matters; and (v) certificates representing the shares of
Common Stock are duly executed, countersigned, registered and delivered upon
payment of the agreed-upon consideration therefor, (a) the shares of Common
Stock, when issued and sold in accordance with the Underwriting Agreement with
respect
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Shawmut National Corporation
February 8, 1994
Page 4
to the Common Stock or any other duly authorized, executed and delivered
applicable valid and binding purchase agreement, will be duly authorized,
validly issued, fully paid and nonassessable, provided that the consideration
therefor is not less than the par value thereof and (b) the Rights will be duly
authorized, and when issued as described in the Registration Statement and in
accordance with the terms of the Rights Agreement, validly issued.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement. We also consent to the reference to
our firm under the heading "Validity of Offered Securities" in the Registration
Statement. In giving this consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
(SIGNATURE OF SKADDEN, ARPS, SLATE,
MEAGHER & FLOM APPEARS HERE)
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Post-Effective Amendment No. 2 to the Registration
Statement on Form S-3 (No. 33-50708) of our report dated February 19, 1993
appearing on page F-3 of Shawmut National Corporation's Annual Report on Form
10-K for the year ended December 31, 1992. We also consent to the reference to
us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse
Hartford, CT
February 7, 1994
<PAGE>
Exhibit 23(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Post-Effective Amendment No. 2 to the Registration
Statement on Form S-3 (No. 33-50708) of Shawmut National Corporation of our
report dated August 10, 1993 relating to the consolidated financial statements
of New Dartmouth Bank, which appears in the Current Report on Form 8-K of
Shawmut National Corporation dated December 20, 1993.
/s/ Price Waterhouse
Boston, Massachusetts
February 7, 1994
<PAGE>
Exhibit 23(d)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report dated January 21,
1993 with respect to the consolidated financial statements of Peoples Bancorp of
Worcester, Inc., included in the Current Report on Form 8-K of Shawmut National
Corporation dated December 20, 1993, in Amendment No. 2 to the Registration
Statement (Form S-3 No. 33-50708) and related Prospectus of Shawmut National
Corporation for the Registration of (i) Debt Securities, (ii) Preferred Stock,
no par value, and/or (iii) Common Stock, par value $.01 per share which may be
issued in one or more series or issuances and will be limited to $700,000,000
aggregate public offering price.
/s/ ERNST & YOUNG
Worcester, Massachusetts
February 7, 1994
<PAGE>
Exhibit 23(e)
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement (Post-Effective Amendment No. 2 to Form S-3) and related Prospectus of
Shawmut National Corporation pertaining to the registration of $700,000,000 in
debt securities, and preferred and common stock, of our report dated February
11, 1993, except for Note B, as to which the date is May 25, 1993, with respect
to the consolidated financial statements of Gateway Financial Corporation,
included in the Current Report on Form 8-K of Shawmut National Corporation dated
December 20, 1993.
/s/ ERNST & YOUNG
Hartford, Connecticut
February 7, 1994
