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Pursuant to Rule 424(b)(5)
Registration No. 33-49507
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 7, 1993)
Republic New York Corporation
[logo]
6,000,000 DEPOSITARY SHARES
EACH REPRESENTING A ONE-FOURTH INTEREST IN A SHARE OF
ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK, SERIES D
($100 STATED VALUE)
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Each of the depositary shares offered hereby (the "Depositary Shares")
represents a one-fourth interest in a share of Republic New York Corporation's
(the "Corporation") Adjustable Rate Cumulative Preferred Stock, Series D ($100
Stated Value) (the "Preferred Stock") deposited with Chemical Bank, as
depositary (the "Depositary"), and, through the Depositary, will entitle the
holder thereof to all proportional rights and preferences of the Preferred Stock
(including dividend, voting, redemption and liquidation rights). The
proportionate liquidation preference of each Depositary Share will be $25. See
"Certain Terms of Depositary Shares" in this Prospectus Supplement and
"Description of Depositary Shares" in the Prospectus accompanying this
Prospectus Supplement.
Dividends on the Preferred Stock will be cumulative from the date of
original issue and will be payable quarterly on January 1, April 1, July 1 and
October 1 of each year, commencing July 1, 1994. All dividends payable on shares
of the Preferred Stock to the Depositary, as record holder of the Preferred
Stock, will be distributed to the record holders of the Depositary Shares
representing such Preferred Stock in accordance with the Deposit Agreement
(as defined herein). See "Description of Depositary Shares -- Dividends and
Other Distributions" in the Prospectus accompanying this Prospectus Supplement.
The dividend rate on the Preferred Stock for the dividend period ending on
June 30, 1994 will be 6.05% per annum, which is equivalent to $0.16 per
Depositary Share. Thereafter, the dividend rate on the Preferred Stock will be
equal to 81% of the Effective Rate (as defined below) in effect from time to
time, but in no event less than 4 1/2% or more than 10 1/2% per annum. The
"Effective Rate" for each quarterly dividend period will be the highest of the
"Treasury Bill Rate," "Ten Year Constant Maturity Rate" and the "Thirty Year
Constant Maturity Rate" determined in advance of such dividend period. See
"Certain Terms of the Preferred Stock -- Applicable Rate."
The Preferred Stock will be redeemable, in whole or in part, at the option
of the Corporation on or after July 1, 1999 at $100 per share (which is
equivalent to $25 per Depositary Share) plus accrued but unpaid dividends to the
redemption date. See "Certain Terms of the Preferred Stock -- Redemption."
Application has been made to list the Depositary Shares on the New York
Stock Exchange. See "Underwriting."
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NEITHER THE DEPOSITARY SHARES NOR THE PREFERRED STOCK ARE SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE
CORPORATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
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Price to Underwriting Proceeds to the
Public(1) Discount(2)(3) Corporation(1)(3)(4)
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Per Depositary Share............................... $25.00 $.7875 $24.2125
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Total.............................................. $150,000,000 $4,725,000 $145,275,000
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</TABLE>
(1) Plus accrued dividends, if any, from May 23, 1994.
(2) The Corporation has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting."
(3) The underwriting discount will be $0.50 per Depositary Share with respect to
any Depositary Shares sold to certain institutions. Therefore, to the extent
of any such sales to such institutions, the actual total underwriting
discount will be less than, and the actual total proceeds to the Corporation
will be greater than, the amounts shown in the table above.
(4) Before deducting expenses of the Corporation estimated to be $75,000.
---------------------------
The Depositary Shares offered by this Prospectus Supplement are offered by
the Underwriters subject to prior sale, withdrawal, cancellation or modification
of the offer, to delivery to and acceptance by the Underwriters and to certain
further conditions. It is expected that delivery of the Depositary Shares will
be made in New York, New York, on or about May 23, 1994.
---------------------------
LEHMAN BROTHERS
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
May 16, 1994
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEPOSITARY
SHARES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE,
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
------------------------
REPUBLIC NEW YORK CORPORATION
The Corporation is a bank holding company incorporated in Maryland. At
March 31, 1994, the Corporation had consolidated total assets of $41.9 billion
and stockholders' equity of $2.5 billion. Its principal asset is the capital
stock of Republic National Bank of New York (the "Bank"). Management expects
that the Bank will remain the Corporation's principal asset and source of
revenue and net income in the foreseeable future. As of March 31, 1994, the Bank
accounted for approximately 75% of the consolidated assets of the Corporation,
approximately 70% of the consolidated revenues and 70% of consolidated net
income of the Corporation. Based on total assets at March 31, 1994, the
Corporation was the twentieth largest bank holding company in the United States.
The Bank is a commercial bank which provides a variety of banking and
financial services on a worldwide basis to corporations, financial institutions,
governments and individuals. At March 31, 1994, the Bank had total assets of
$32.1 billion, total deposits of $18.5 billion and total stockholder's equity of
$2.0 billion. Based on total deposits at December 31, 1993, the date rankings
were last available, the Bank was the fifteenth largest commercial bank in the
United States. The Bank owns approximately 49% of Safra Republic Holdings S.A.
("Safra Republic"), a European-based bank holding company with five banking
subsidiaries located in France, Gibraltar, Guernsey, Luxembourg and Switzerland.
The Corporation's other significant bank subsidiary is Republic Bank for
Savings ("RBS") (formerly known as The Manhattan Savings Bank). At March 31,
1994, RBS had total assets of $6.4 billion, total deposits of $4.7 billion and
total stockholder's equity of $445 million.
APPLICATION OF PROCEEDS
Of the net proceeds to be received by the Corporation from the sale of the
Depositary Shares offered hereby, approximately $34 million will be used to
redeem all of the outstanding shares of the Corporation's Cumulative Preferred
Stock, Floating Rate Series B and the balance will be used for general corporate
purposes, including, from time to time, the redemption or the purchase, in the
open market or in privately negotiated transactions, of other outstanding
indebtedness or preferred stock of the Corporation and the making of advances to
its subsidiaries, principally, the Bank. Such advances may require the approval
of bank regulatory authorities, and, pending ultimate application, the net
proceeds may be used to make short-term investments or to reduce short-term
borrowings. Management anticipates that the Corporation may, from time to time,
engage in additional equity or debt financings.
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SUMMARY FINANCIAL INFORMATION
The following table sets forth, in summary form, certain financial data of
the Corporation for each of the years in the five-year period ended December 31,
1993, and for the three months ended March 31, 1993 and 1994, and is qualified
in its entirety by the detailed information and consolidated financial
statements included in the documents incorporated by reference in the
accompanying Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31, (1)
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1989 1990 1991 1992 1993 1993 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Summary of Income:
Net interest income......... $ 356,866 $ 457,324 $ 581,246 $ 720,364 $ 775,851 $ 191,485 $ 198,186
Provision for loan losses... 209,000 40,000 62,000 120,000 85,000 25,000 10,000
Net interest income after
provision for loan
losses.................... 147,866 417,324 519,246 600,364 690,851 166,485 188,186
Other operating income...... 278,183 270,584 271,433 302,247 395,472 80,976 104,545
Other operating expenses.... 369,999 464,583 502,933 555,342 634,965 146,865 175,928
Income before income
taxes..................... 56,050 223,325 287,746 347,269 451,358 100,596 116,803
Net income.................. 23,997 201,220 227,360 258,883 301,205 68,745 79,779
Net income applicable to
common stock.............. 1,223 180,177 204,627 230,497 272,790 61,580 72,695
Per Share of Common Stock:
Net income per share (after
dividends on preferred
stock):
Primary................. $ .03 $ 3.62 $ 3.95 $ 4.42 $ 5.20 $ 1.18 $ 1.38
Fully diluted........... .03 3.62 3.90 4.32 5.05 1.15 1.34
Book value.................. 23.44 26.61 29.60 32.71 41.57 33.67 37.32
Dividends declared.......... .85 .88 .95 1.00 1.08 .27 .33
Dividend Payout Ratio(2)........ * 24.56% 24.10% 22.67% 20.80% 22.88% 23.82%
Average Number of Common Shares
Outstanding
(in thousands):
Primary..................... 45,223 49,726 51,852 52,204 52,466 52,196 52,557
Fully diluted............... 45,223 49,726 54,292 56,020 56,321 56,052 56,396
Consolidated Average Balances:
Interest-bearing deposits
with
banks..................... $9,141,358 $8,030,285 $8,558,149 $7,792,737 $7,452,339 $9,646,318 $4,878,003
Investment securities....... 4,467,388 6,394,720 7,892,363 11,927,912 14,177,927 13,942,581 15,360,940
Loans, net of unearned
income.................... 8,366,561 10,603,379 9,623,397 8,732,432 8,890,559 8,204,384 10,395,212
Interest-earning assets..... 23,695,247 26,370,288 27,025,728 29,962,625 32,560,058 33,480,107 33,081,625
Total assets................ 27,914,609 30,858,023 31,114,281 33,667,270 37,371,326 37,375,547 40,894,341
Total deposits.............. 18,265,587 19,409,957 19,413,886 18,634,036 20,951,074 20,743,253 21,201,816
Total long-term debt........ 2,641,185 2,389,401 2,562,166 4,148,477 4,637,595 4,472,588 4,916,743
Preferred stock............. 309,425 309,425 403,260 540,984 556,425 556,425 556,425
Common stockholders'
equity.................... 1,105,036 1,242,375 1,440,897 1,625,157 1,808,857 1,727,068 2,194,660
Return on:
Average interest-earning
assets(3)................. .10% .76% .84% .86% .93% .83% .98%
Average total assets(3)..... .09 .65 .73 .77 .81 .75 .79
Average common stockholders'
equity(4)................. .11 14.50 14.20 14.18 15.08 14.46 13.43
Average Stockholders' Equity(5)
to:
Average total assets........ 5.07% 5.03% 5.93% 6.43% 6.33% 6.11% 6.73%
Average loans, net of
unearned
income.................... 16.91 14.63 19.16 24.81 26.60 27.83 26.46
Consolidated Ratio of Earnings
to Fixed Charges and Preferred
Stock Dividends(6):
Excluding interest on
deposits.................. 1.01x 1.32x 1.51x 1.55x 1.78x 1.66x 1.81x
Including interest on
deposits.................. 1.00 1.10 1.15 1.23 1.34 1.29 1.35
</TABLE>
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* Not meaningful.
(1) The results of operations for the three months ended March 31, 1993 and 1994
are not audited, but, in the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair
presentation of the results of operations for such periods have been
included. The results for the three months ended March 31, 1994, which
include rate of return ratios on an annualized basis, are not necessarily
indicative of the results that may be expected for the full year or any
other interim period.
(2) Calculated as dividends declared on common stock divided by net income
applicable to common stock.
(3) Based on net income.
(4) Based on net income applicable to common stock.
(5) Stockholders' equity includes preferred stock and common stockholders'
equity.
(6) For the purpose of computing the consolidated ratio of earnings to fixed
charges and preferred stock dividends, earnings represent consolidated
income before income taxes plus fixed charges. Fixed charges and preferred
stock dividends excluding interest on deposits consist of interest on
long-term debt and short-term borrowings and one-third of rental expense
(which is deemed representative of the interest factor) and the pre-tax
equivalent of preferred stock dividends. Fixed charges and preferred stock
dividends including interest on deposits consist of the foregoing items plus
interest on deposits.
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CERTAIN TERMS OF THE DEPOSITARY SHARES
The following description of certain terms of the Depositary Shares
supplements, and to the extent inconsistent therewith, supersedes, the
description of the general terms and provisions of the depositary shares set
forth under the heading "Description of Depositary Shares" in the Prospectus
accompanying this Prospectus Supplement, to which reference is hereby made. This
description does not purport to be complete and is qualified in its entirety by
the provisions of the Deposit Agreement (as defined below), a form of which has
been filed as an exhibit to the Registration Statement.
The shares of Preferred Stock represented by the Depositary Shares will be
deposited under the Deposit Agreement, dated as of May 23, 1994 (the "Deposit
Agreement"), between the Corporation, Chemical Bank, as Depositary and the
holders from time to time of depositary receipts issued by the Depositary
thereunder ("Depositary Receipts"). Depositary Receipts will be issuable only in
definitive registered form. Each Depositary Share will represent a one-fourth
interest in a share of the Preferred Stock. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, through the
Depositary and in proportion to the one-fourth interest in a share of the
Preferred Stock represented by such Depositary Share, to all rights and
preferences of a share of the Preferred Stock (including dividend, voting,
redemption and liquidation rights). See "Certain Terms of the Preferred Stock"
below and "Description of Preferred Stock" and "Description of Depositary
Shares" in the Prospectus accompanying this Prospectus Supplement.
Chemical Bank will act as Depositary and as transfer agent, dividend
disbursing agent and registrar for the Depositary Shares and the Preferred Stock
and acts as the transfer agent, dividend disbursing agent and registrar for the
Corporation's common stock and certain series of the Corporation's preferred
stock. In addition, the Corporation and the Bank have other relationships
arising in the ordinary course of business with Chemical Bank and its
affiliates.
CERTAIN TERMS OF THE PREFERRED STOCK
The following description of certain terms of the Preferred Stock
supplements, and to the extent inconsistent therewith supersedes, the
description of the general terms and provisions of the preferred stock set forth
under the heading "Description of Preferred Stock" in the Prospectus
accompanying this Prospectus Supplement, to which reference is hereby made. This
description does not purport to be complete and is qualified in its entirety by
the Corporation's Charter, which has been filed as an exhibit to the
Registration Statement, and the Articles Supplementary creating the Preferred
Stock, which will be filed as an exhibit to the Registration Statement.
GENERAL
The Corporation's Charter currently authorizes the issuance of 20,000,000
shares of preferred stock (which may be issued from time to time by, and with
such designations, preferences, voting rights and other rights, qualifications,
limitations and restrictions determined in resolutions of, the Corporation's
Board of Directors).
At March 31, 1994, there were outstanding 52,475,051 shares of Common
Stock, 678,500 shares of Cumulative Preferred Stock, Floating Rate Series B (the
"Floating Rate Preferred Stock"), 625 shares of Series A and 625 shares of
Series B Dutch Auction Rate Transferable Securities Preferred Stock ("DARTS"),
750 shares of Remarketed Preferred Stock ("RP"), 500 shares of Money Market
Cumulative Preferred Stock ("MMP"), 3,450,000 shares of $3.375 Cumulative
Convertible Preferred Stock (the "Convertible Preferred Stock") and 4,000,000
shares of $1.9375 Cumulative Preferred Stock. The Floating Rate Preferred Stock,
the DARTS, the RP, the MMP, the Convertible Preferred Stock and the $1.9375
Cumulative Preferred Stock are collectively referred to as the "Other Preferred
Stock". All outstanding shares of the Other Preferred Stock are fully paid and
nonassessable.
Under the Articles Supplementary creating the issue of Preferred Stock, the
Corporation is authorized to issue 1,500,000 shares of Preferred Stock. The
shares of Preferred Stock, upon issuance against full payment of the purchase
price therefor, will be fully paid and nonassessable. The Preferred Stock will
be without par value, will have a $100 stated value per share and will rank,
with respect to
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dividends, voting, preferences, qualifications, limitations, restrictions and
the distribution of assets upon liquidation, equally with the Other Preferred
Stock. The Preferred Stock will have no preemptive rights.
The capital stock of the Corporation does not represent or constitute a
deposit account and is not insured by the Federal Deposit Insurance Corporation
or any other governmental agency or instrumentality.
DIVIDENDS
Holders of Depositary Shares representing shares of Preferred Stock will be
entitled to receive cumulative cash dividends when, as and if declared by the
Board of Directors of the Corporation, out of funds legally available therefor,
for the period from the date of original issue of such shares to and including
June 30, 1994 (the "Initial Dividend Period"), and, for each dividend period
thereafter commencing on each January 1, April 1, July 1 and October 1, and
ending on and including the day next preceding the first day of the next
dividend period (such Initial Dividend Period and each of such other periods
being hereinafter referred to as a "Dividend Period") at a rate per annum equal
to the Applicable Rate (as discussed below) in respect of such Dividend Period.
The amount of dividends per share payable for the Initial Dividend Period and
for any portion of any other Dividend Period less than a full Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months and the actual number of days elapsed in the Dividend Period for which
the dividends are payable, and by multiplying the Applicable Rate by $100.
Dividends will accrue from the date of original issuance and will be
payable when, as and if declared by the Board of Directors of the Corporation,
out of funds legally available therefor, quarterly on each January 1, April 1,
July 1 and October 1 in each year, commencing July 1, 1994 (each, a "Dividend
Payment Date"), to the holders of record as they appear on the stock transfer
records of the Corporation on the preceding December 15, March 15, June 15 and
September 15 in each year or if such day is not a business day, the next
preceding business day. To the extent not declared and paid for any past
Dividend Periods, dividends may be declared and paid at any time, without
reference to any regular Dividend Payment Date, to holders of record on such
date, not exceeding 30 days preceding the payment date therefor, as may be fixed
by the Board of Directors of the Corporation, or a duly authorized committee of
the Board of Directors. No interest, or sum of money in lieu of interest, shall
be payable in respect of any dividend that is not paid when it accrues.
The Preferred Stock and, accordingly, the Depositary Shares, will be
entitled to all of the other dividend rights and subject to certain limitations
on the payment of dividends as set forth in the accompanying Prospectus. See
"Description of Preferred Stock - Dividends" in the accompanying Prospectus.
APPLICABLE RATE
General. The dividend rate per annum referred to above for any Dividend
Period (the "Applicable Rate") will be equal to (i) in the case of the Initial
Dividend Period, 6.05% per annum (which is equivalent to $0.16 per Depositary
Share) and (ii) in the case of any subsequent Dividend Period, 81% of the
Effective Rate (as defined below), but not less than 4 1/2% per annum, or more
than 10 1/2% per annum. The "Effective Rate" for any Dividend Period will be
equal to the highest of the Treasury Bill Rate, the Ten Year Constant Maturity
Rate and the Thirty Year Constant Maturity Rate (each as defined below under
"Three-way Pricing Index") for the Dividend Period. In the event that the
Corporation determines in good faith that for any reason:
(i) any one of the Treasury Bill Rate, the Ten Year Constant Maturity
Rate and the Thirty Year Constant Maturity Rate cannot be determined for
any Dividend Period, then the Effective Rate for such Dividend Period will
be equal to the higher of whichever two such rates can be so determined;
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(ii) only one of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate can be determined
for any Dividend Period, then the Effective Rate for such Dividend Period
will be equal to whichever such rate can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten Year Constant Maturity
Rate and the Thirty Year Constant Maturity Rate can be determined for any
Dividend Period, then the Effective Rate for the preceding Dividend Period
will be continued for such Dividend Period.
Three-way Pricing Index. Except as described below in this paragraph, the
"Treasury Bill Rate" for each Dividend Period will be the arithmetic average of
the two most recent weekly per annum market discount rates (or the one weekly
per annum market discount rate, if only one such rate is published during the
relevant Calendar Period (as defined below)) for three-month U.S. Treasury
bills, as published weekly by the Federal Reserve Board (as defined below)
during the Calendar Period immediately preceding the last ten calendar days
preceding the Dividend Period for which the dividend rate on the Preferred Stock
is being determined. In the event that the Federal Reserve Board does not
publish such a weekly per annum market discount rate during any such Calendar
Period, then the Treasury Bill Rate for such Dividend Period will be the
arithmetic average of the two most recent weekly per annum market discount rates
(or the one weekly per annum market discount rate, if only one such rate is
published during the relevant Calendar Period) for three-month U.S. Treasury
bills, as published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the Corporation.
In the event that a per annum market discount rate for three-month U.S. Treasury
bills is not published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar Period,
then the Treasury Bill Rate for such Dividend Period will be the arithmetic
average of the two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such rate is published
during the relevant Calendar Period) for all of the U.S. Treasury bills then
having remaining maturities of not less than 80 nor more than 100 days, as
published during such Calendar Period by the Federal Reserve Board or, if the
Federal Reserve Board does not publish such rates, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Corporation. In
the event that the Corporation determines in good faith that for any reason no
such U.S. Treasury bill rates are published as provided above during such
Calendar Period, then the Treasury Bill Rate for such Dividend Period will be
the arithmetic average of the per annum market discount rates based upon the
closing bids during such Calendar Period for each of the issues of marketable
non-interest-bearing U.S. Treasury securities with a remaining maturity of not
less than 80 nor more than 100 days from the date of each such quotation, as
chosen and quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to the Corporation
by at least three recognized dealers in U.S. Government securities selected by
the Corporation. In the event that the Corporation determines in good faith that
for any reason the Corporation cannot determine the Treasury Bill Rate for any
Dividend Period as provided above in this paragraph, the Treasury Bill Rate for
such Dividend Period will be the arithmetic average of the per annum market
discount rates based upon the closing bids during such Calendar Period for each
of the issues of marketable interest-bearing U.S. Treasury securities with a
remaining maturity of not less than 80 nor more than 100 days, as chosen and
quoted daily for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the Corporation.
Except as described below in this paragraph, the "Ten Year Constant
Maturity Rate" for each Dividend Period will be the arithmetic average of the
two most recent weekly per annum Ten Year Average Yields (as defined below) (or
the one weekly per annum Ten Year Average Yield, if only one such yield is
published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately preceding the last
ten calendar days preceding the Dividend Period for which the dividend rate on
the Preferred Stock is being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum Ten Year Average Yield during
such Calendar Period, then the Ten Year Constant Maturity Rate for such Dividend
Period will be the arithmetic average of the two most recent weekly per annum
Ten Year Average Yields (or the one weekly per annum Ten Year Average Yield, if
only one such yield is published during the
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<PAGE> 7
relevant Calendar Period), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that a per annum Ten Year Average Yield is not
published by the Federal Reserve Board or by any Federal Reserve Bank or by any
U.S. Government department or agency during such Calendar Period, then the Ten
Year Constant Maturity Rate for such Dividend Period will be the arithmetic
average of the two most recent weekly per annum average yields to maturity (or
the one weekly per annum average yield to maturity, if only one such yield is
published during the relevant Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than Special
Securities (as defined below)) then having remaining maturities of not less than
eight nor more than twelve years, as published during such Calendar Period by
the Federal Reserve Board or, if the Federal Reserve Board does not publish such
yields, by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that the Corporation determines
in good faith that for any reason the Corporation cannot determine the Ten Year
Constant Maturity Rate for such Dividend Period as provided above in this
paragraph, then the Ten Year Constant Maturity Rate for such Dividend Period
will be the arithmetic average of the per annum average yields to maturity based
upon the closing bids during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) with a final maturity date not less than eight nor more
than twelve years from the date of each such quotation, as chosen and quoted
daily for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the Corporation.
Except as described below in this paragraph, the "Thirty Year Constant
Maturity Rate" for each Dividend Period will be the arithmetic average of the
two most recent weekly per annum Thirty Year Average Yields (as defined below)
(or the one weekly per annum Thirty Year Average Yield, if only one such yield
is published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately preceding the last
ten calendar days preceding the Dividend Period for which the dividend rate on
the Preferred Stock is being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum Thirty Year Average Yield during
such Calendar Period, then the Thirty Year Constant Maturity Rate for such
Dividend Period will be the arithmetic average of the two most recent weekly per
annum Thirty Year Average Yields (or the one weekly per annum Thirty Year
Average Yield, if only one such yield is published during the relevant Calendar
Period), as published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the Corporation.
In the event that a per annum Thirty Year Average Yield is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Thirty Year Constant
Maturity Rate for such Dividend Period will be the arithmetic average of the two
most recent weekly per annum average yields to maturity (or the one weekly per
annum average yield to maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) then
having remaining maturities of not less than twenty-eight nor more than thirty
years, as published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board does not publish such yields, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good faith that for
any reason the Corporation cannot determine the Thirty Year Constant Maturity
Rate for any Dividend Period as provided above in this paragraph, then the
Thirty Year Constant Maturity Rate for such Dividend Period will be the
arithmetic average of the per annum average yields to maturity based upon the
closing bids during such Calendar Period for each of the issues of actively
traded marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than twenty-eight nor
more than thirty years from the date of each such quotation, as chosen and
quoted daily for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty
Year Constant Maturity Rate will each be rounded to the nearest five
one-hundredths of one percent.
S-7
<PAGE> 8
The Applicable Rate with respect to each Dividend Period (other than the
Initial Dividend Period) will be calculated as promptly as practicable by the
Corporation according to the appropriate method described above. The Corporation
will cause notice of each Applicable Rate to be enclosed with the dividend
payment checks next mailed to the holders of the Preferred Stock and indirectly
through the Depositary, to holders of the Depositary Shares. For as long as the
Depositary is a holder of the Preferred Stock, the Corporation will advise the
Depositary of each Applicable Rate promptly after its determination. It is
expected that the holders of Depositary Shares will be able to determine such
Applicable Rate thereafter by telephoning the Depositary.
As used above, the term "Calendar Period" means a period of fourteen
calendar days; the term "Federal Reserve Board" means the Board of Governors of
the Federal Reserve System; the term "Special Securities" means securities which
can, at the option of the holder, be surrendered at face value in payment of any
Federal estate tax or which provide tax benefits to the holder and are priced to
reflect such tax benefits or which were originally issued at a deep or
substantial discount; the term "Ten Year Average Yield" means the average yield
to maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and the term "Thirty
Year Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to constant
maturities of thirty years).
LIQUIDATION RIGHTS
The liquidation preference for shares of Preferred Stock is $100 per share
(which is equivalent to $25 per Depositary Share) plus an amount equal to all
dividends thereon (whether or not earned or declared) accrued to and unpaid
through the date of final distribution. Neither the consolidation nor the merger
of the Corporation with or into any other corporation or corporations nor a
reorganization of the Corporation alone nor the sale or transfer by the
Corporation of all or substantially all of its assets shall be deemed to be a
dissolution or liquidation of the Corporation.
The holders of the shares of Preferred Stock will not be entitled to
receive the liquidation preference of such shares until the liquidation
preference of any shares of the Corporation's capital stock ranking senior to
the Preferred Stock as to rights upon liquidation, dissolution or winding up
shall have been paid (or a sum set aside therefor sufficient to provide for
payment) in full. No such senior capital stock of the Corporation is currently
outstanding, and the holders of Preferred Stock, and indirectly the holders of
Depositary Shares, will have certain voting rights with respect to the creation
of any such senior capital stock. See "Voting Rights" below and in the
accompanying Prospectus.
The Corporation is a legal entity separate and distinct from the Bank, RBS,
Republic Factors Corp. ("Factors") and its other subsidiaries. Accordingly, the
right of the Corporation, its stockholders and its creditors to participate in
any distribution of the assets or earnings of the Bank, RBS, Factors and its
other subsidiaries is necessarily subject to the prior claims of the respective
creditors of the Bank, RBS, Factors or its other subsidiaries, except to the
extent that claims of the Corporation in its capacity as a creditor of the Bank,
RBS, Factors or its other subsidiaries may be recognized.
For further information regarding the liquidation rights of the Preferred
Stock, and indirectly those of the holders of the Depositary Shares, see
"Description of Preferred Stock -- Rights Upon Liquidation" in the accompanying
Prospectus.
REDEMPTION
The Preferred Stock may be redeemed on or after July 1, 1999, at the option
of the Corporation, for cash, on at least 30 but not more than 60 days' notice
at any time or from time to time, as a whole or in part, at $100 per share
(which is equivalent to $25 per Depositary Share), plus, in each case, dividends
accrued and accumulated but unpaid to but excluding the redemption date. The
Preferred Stock will not be subject to any sinking fund or other obligation of
the Corporation to purchase or redeem the Preferred Stock or Depositary Shares.
Any such redemption may be effected only with prior approval of the Federal
Reserve Board (unless at such time it is determined that such approval is not
required).
S-8
<PAGE> 9
For further information regarding the redemption rights of the Preferred
Stock, and indirectly those of the holders of the Depositary Shares, see
"Description of Preferred Stock -- Redemption" in the accompanying Prospectus.
CONVERSION OR EXCHANGE RIGHTS
The Preferred Stock is not convertible into or exchangeable for shares of
any other class or series of capital stock of the Corporation.
VOTING RIGHTS
Except as set forth below or as otherwise, from time to time, required by
law or the Corporation's Charter, holders of the Preferred Stock, and indirectly
the holders of Depositary Shares, will not have any voting rights.
Whenever dividends payable on any shares of the Preferred Stock shall be in
arrears for six consecutive calendar quarters, the holders of such shares of
Preferred Stock (voting separately as a class with any holders of Cumulative
Preferred Stock upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
directors (on the terms set forth below) of the Corporation at the next annual
meeting of stockholders and at each subsequent meeting called for the election
of directors until all dividends accumulated on such shares of the Preferred
Stock and Cumulative Preferred Stock shall have been fully paid or set aside for
payment. In such case, the entire Board of Directors of the Corporation will be
increased by two directors.
The holders of the Preferred Stock are entitled to two votes per share
(equivalent to one-half vote per Depositary Share), the holders of the
Cumulative Preferred Stock are entitled to one-half vote per share and the
holders of the Convertible Preferred Stock and the holders of the Floating Rate
Preferred Stock are entitled to one vote per share, in each case on all matters
on which they are entitled to vote (representing one vote per $50 of liquidation
preference). The holders of the DARTS, the holders of the MMP and the holders of
the RP are entitled to 2,000 votes per share on all matters on which they are
entitled to vote (representing one vote per $50 of liquidation preference).
Under interpretations adopted by the Federal Reserve Board, if the holders
of Preferred Stock become entitled to vote for the election of directors because
dividends are in arrears as described herein, such Preferred Stock may then be
deemed a "class of voting securities" and a holder of 25% or more of such
Preferred Stock (or a holder of 5% or more if it otherwise exercises a
"controlling influence" over the Corporation) may then be subject to regulation
as a bank holding company in accordance with the Bank Holding Company Act of
1936, as amended (the "BHCA"). In addition, at such time as such Preferred Stock
is deemed a class of voting securities, any other bank holding company may be
required to obtain the prior approval of the Federal Reserve Board to acquire 5%
or more of such Preferred Stock under the BHCA, and any person other than a bank
holding company may be required to obtain the prior approval of the Federal
Reserve Board under the Change in Bank Control Act to acquire 10% or more of
such Preferred Stock.
For further information regarding the voting rights of the Preferred Stock,
and indirectly those of the holders of the Depositary Shares, see "Description
of Preferred Stock -- Voting Rights" in the accompanying Prospectus.
TAXATION
Owners of the Depositary Shares will be treated for Federal income tax
purposes as if they were owners of the Preferred Stock represented by such
Depositary Shares and, accordingly, must take into account for Federal income
tax purposes the income and deductions to which they would be entitled if they
were holders of such Preferred Stock.
S-9
<PAGE> 10
UNDERWRITING
The underwriters of the offering of Depositary Shares (the "Underwriters"),
for whom Lehman Brothers Inc., Bear, Stearns & Co. Inc., PaineWebber
Incorporated and Prudential Securities Incorporated are acting as
representatives (collectively, the "Representatives"), have severally agreed,
subject to the terms and conditions of the Underwriting Agreement, to purchase
from the Corporation the aggregate number of Depositary Shares set forth
opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER DEPOSITARY SHARES
------------------------------------------------------ ---------------------------
<S> <C>
Lehman Brothers Inc. ................................. 3,000,000
Bear, Stearns & Co. Inc. ............................. 925,000
PaineWebber Incorporated.............................. 925,000
Prudential Securities Incorporated.................... 925,000
Goldman, Sachs & Co................................... 75,000
Kidder, Peabody & Co. Incorporated.................... 75,000
Smith Barney Shearson Inc. ........................... 75,000
------------
Total....................................... 6,000,000
------------
------------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that, if any of the
foregoing shares are purchased by the Underwriters pursuant to the Underwriting
Agreement, all such shares must be so purchased. The Corporation has agreed to
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribute to payments that the
Underwriters may be required to make in respect thereof.
The Underwriters have advised the Corporation that they propose to offer
all or part of the Depositary Shares directly to the public at the price to the
public set forth on the cover page of this Prospectus Supplement, and in part to
certain dealers, at such price less a concession not in excess of $.50 per
Depositary Share. The Underwriters may allow and such dealers may reallow
discounts not in excess of $.25 per Depositary Share to certain other dealers.
After the initial public offering, the price and concessions may be changed. The
Depositary Shares are offered subject to receipt and acceptance by the
Underwriters and to certain other conditions, including the right to reject
orders in whole or in part.
The Depositary Shares are a new issue of securities with no established
trading market. Application has been made to list the Depositary Shares on the
New York Stock Exchange. There can be no assurance that the Depositary Shares
will be so listed or will continue to be listed. Although the Corporation has
been advised by the Underwriters that they may from time to time purchase
Depositary Shares in the secondary market, they are not obligated to do so and
may discontinue market-making at any time without notice. Consequently, there
can be no assurance as to the liquidity of the trading market for the Depositary
Shares.
Underwriters and certain of their associates and affiliates may be
customers of (including borrowers from), engage in transactions with, and/or
perform services for the Corporation and its subsidiaries in the ordinary course
of business.
LEGAL OPINIONS
The validity of the Depositary Shares offered hereby and the issuance of
the shares of the Preferred Stock in connection therewith will be passed upon
for the Corporation by Shearman & Sterling, 599 Lexington Avenue, New York, New
York 10022, counsel to the Corporation, and for the Underwriters by Cravath,
Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019,
counsel to the Underwriters. Such counsel will rely as to matters of Maryland
law on the opinion of Piper & Marbury, Charles Center South, 36 South Charles
Street, Baltimore, Maryland 21201. Cravath, Swaine & Moore has provided legal
services to the Corporation and its subsidiaries from time to time.
S-10
<PAGE> 11
PROSPECTUS
Republic New York Corporation [LOGO]
Debt Securities and Debt Warrants
Currency Warrants, Stock-Index Warrants and Other Warrants
Preferred Stock, Depositary Shares and Preferred Stock Warrants
Common Stock Warrants
Republic New York Corporation (the "Corporation") may from time to time
offer, together or separately, (i) one or more series of its unsecured debt
securities which may be either senior debentures, notes, bonds and/or other
evidences of indebtedness ("Senior Securities") or subordinated debentures,
notes, bonds and/or other evidences of indebtedness ("Subordinated Securities"),
both of which may be convertible into common stock, par value $5 per share, of
the Corporation ("Common Stock") or preferred stock, without par value, of the
Corporation ("Preferred Stock"), (ii) warrants to purchase Senior Securities or
Subordinated Securities ("Debt Warrants"), (iii) options, warrants or other
rights entitling the holder to receive the cash value of the right to purchase
("Currency Call Warrants") or the right to sell ("Currency Put Warrants" and
collectively with the Currency Call Warrants being referred to herein as the
"Currency Warrants") foreign currencies or composite currencies, (iv) options,
warrants or other rights entitling the holder to receive an amount in cash
determined by reference to increases ("Stock-Index Call Warrants") and decreases
("Stock-Index Put Warrants" and collectively with Stock-Index Call Warrants
being referred to herein as the "Stock-Index Warrants") in the level of a
specified stock-index which may be based on one or more U.S. or foreign stocks
or a combination thereof, (v) options, warrants or other rights relating to
other items or indexes ("Other Warrants"), (vi) shares of Preferred Stock which
may be convertible into shares of Common Stock or exchangeable for Debt
Securities, (vii) shares of Preferred Stock represented by depositary shares
("Depositary Shares"), (viii) warrants to purchase shares of Preferred Stock
("Preferred Stock Warrants") and (ix) warrants to purchase shares of Common
Stock ("Common Stock Warrants"), in amounts, at prices and on terms to be
determined at the time of the offering. The Senior Securities and the
Subordinated Securities are collectively referred to herein as the "Debt
Securities"; the Debt Warrants, Currency Warrants, Stock-Index Warrants, Other
Warrants, Preferred Stock Warrants and Common Stock Warrants are collectively
referred to herein as the "Warrants"; and the Debt Securities, Warrants, shares
of Preferred Stock and Depositary Shares are collectively referred to herein as
the "Securities."
The Securities offered pursuant to this Prospectus may be offered separately
or together in one or more series up to an aggregate initial public offering
price of $1,000,000,000 or the equivalent thereof denominated in foreign
currencies or units of two or more foreign currencies such as European Currency
Units, at individual prices and on terms to be set forth in one or more
supplements to this Prospectus (each, a "Prospectus Supplement").
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Corporation. The Subordinated Securities will be
subordinated to all existing and future Senior Indebtedness of the Corporation
(as defined). See "Description of Debt Securities".
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and,
among other things, will include, where applicable, (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, currency,
denominations, maturity, premium, rate and time of payment of interest, terms
for redemption at the option of the Corporation or repayment at the option of
the holder, terms for sinking fund payments, terms for conversion or exchange
into other Securities and any initial public offering price; (ii) in the case of
shares of Preferred Stock, the specific title and stated value, any dividend,
liquidation, redemption, conversion, voting and other rights, the initial public
offering price and whether interests in the Preferred Stock will be represented
by Depositary Shares; (iii) in the case of Warrants, where applicable, the
duration, aggregate amount, offering price, exercise price and detachability;
(iv) Debt Warrants, Preferred Stock Warrants and Common Stock Warrants, the
applicable type and amount of Securities covered thereby; (v) in the case of
Stock-Index Warrants or Other Warrants, the applicable securities index or other
items or indices with respect to which such warrants shall apply and the method
of determining the cash value payable in connection with the exercise of such
warrants; (vi) in the case of Currency Warrants, the currency to which U.S.
dollars will be compared, the method of determining the cash value payable in
connection with the exercise of such Currency Warrants, the manner in which such
Currency Warrants may be exercised and any restrictions on exercise of such
Currency Warrants; and (vii) in the case of Depositary Shares, the fraction of a
share of Preferred Stock which each such Depositary Share will represent.
The Prospectus Supplement will also contain information, where applicable,
about certain U.S. federal income tax, accounting and other considerations
relating to, and any listing on a securities exchange of, the Securities covered
by the Prospectus Supplement.
The Securities are not savings accounts, deposits or other obligations of
any bank or nonbank subsidiary of the Corporation and are not insured by the
Federal Deposit Insurance Corporation, the Bank Insurance Fund or any other
governmental agency.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COM-MISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The Securities may be sold directly by the Corporation, or through agents
designated from time to time, or through underwriters or dealers. If any agents
of the Corporation, or any underwriters are involved in the sale of the
Securities, the names of such agents or underwriters and any applicable fees,
commissions or discounts and the net proceeds to the Corporation from such sale
will be set forth in the applicable Prospectus Supplement. The Corporation may
also issue contracts under which the counterparty may be required to purchase
Debt Securities, Preferred Stock or Depositary Shares. Such contracts would be
issued with the Debt Securities, Preferred Stock, Depositary Shares and/or
Warrants in amounts, at prices and on terms to be set forth in the applicable
Prospectus Supplement. See "Plan of Distribution."
THE DATE OF THIS PROSPECTUS IS MAY 7, 1993.
<PAGE> 12
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document heretofore filed by the Corporation with the
Securities and Exchange Commission (the "Commission") is incorporated herein by
reference:
1. Annual Report on Form 10-K for the year ended December 31, 1992,
filed with the Commission pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
All reports subsequently filed pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act prior to the termination of the offering of the
Securities shall be deemed to be incorporated by reference into this Prospectus.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL
DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS). WRITTEN REQUESTS SHOULD BE DIRECTED TO:
Republic New York Corporation
452 Fifth Avenue
New York, New York 10018
Telephone requests may be directed to (212) 525-6100.
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
Prospectus or the Prospectus Supplement, in connection with the offering
contemplated hereby, and, if given or made, such information or representations
must not be relied upon as having been authorized by the Corporation or any
underwriter, dealer or agent. This Prospectus and the Prospectus Supplement do
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which they relate and do not
constitute an offer to sell or a solicitation of an offer to buy any securities
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
the Prospectus Supplement, nor any sale made hereunder or thereunder, shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Corporation since the date hereof or thereof or that the
information contained or incorporated by reference herein or therein is correct
as of any time subsequent to such date.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's New York Regional Office, 7 World Trade
Center, New York, New York 10048, and Chicago Regional Office, Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661,
and copies of such materials can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Reports, proxy statements and other information concerning the
Corporation can also be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
This Prospectus constitutes part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by the Corporation with the Commission under the Securities Act of 1933, as
amended. This Prospectus does not contain all of the information included in the
Registration Statement, certain parts of which are omitted in accordance with
applicable regulations. For further information pertaining to the Corporation
and the Securities
2
<PAGE> 13
offered hereby, reference is made to the Registration Statement and the Exhibits
thereto which may be inspected without charge at the office of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, and copies thereof may be
obtained from the Commission upon payment of the prescribed fees.
REPUBLIC NEW YORK CORPORATION
The Corporation is a bank holding company incorporated in Maryland. At
December 31, 1992, the Corporation had consolidated total assets of $37.1
billion and stockholders' equity of $2.3 billion. Its principal asset is the
capital stock of Republic National Bank of New York (the "Bank"). Management
expects that the Bank will remain the Corporation's principal asset and source
of revenue and net income in the foreseeable future. As of December 31, 1992,
the Bank accounted for approximately 80% of the consolidated assets of the
Corporation, and for the year ended December 31, 1992, the Bank accounted for
approximately 70% of the consolidated revenues and net income of the
Corporation. Based on total assets at September 30, 1992, the date rankings were
last available, the Corporation was the nineteenth largest bank holding company
in the United States.
The Corporation is a legal entity separate and distinct from the Bank, The
Manhattan Savings Bank ("Manhattan"), Republic Factors Corp. ("Factors") and its
other subsidiaries. Accordingly, the right of the Corporation, its stockholders
and its creditors to participate in any distribution of the assets or earnings
of the Bank, Manhattan, Factors and its other subsidiaries is necessarily
subject to the prior claims of the respective creditors of the Bank, Manhattan,
Factors or its other subsidiaries, except to the extent that claims of the
Corporation in its capacity as a creditor of the Bank, Manhattan, Factors or its
other subsidiaries may be recognized.
The Corporation's principal executive offices are located at 452 Fifth
Avenue, New York, New York 10018, and its telephone number is (212) 525-6100.
REPUBLIC NATIONAL BANK OF NEW YORK
The Bank is a commercial bank which provides a variety of banking and
financial services on a worldwide basis to corporations, financial institutions,
governments and individuals. At December 31, 1992, the Bank had total assets of
$29.9 billion, total deposits of $17.8 billion and total stockholder's equity of
$1.9 billion. Based on total deposits at December 31, 1992, the Bank was the
fourteenth largest commercial bank in the United States.
The Bank is headquartered in New York City with 33 domestic branch banking
offices in New York City and Westchester and Rockland Counties. The Bank
maintains wholly-owned foreign banking subsidiaries in The Bahamas, Canada,
Uruguay, Singapore and the Cayman Islands, eight foreign branch offices in the
Caribbean, Europe, the Far East and Latin America and representative offices in
the Far East and Latin America. The Bank's facilities are supplemented by a
network of correspondent banks throughout the world. The Bank also has Edge Act
banking subsidiaries in Beverly Hills, California and Miami, Florida. The Bank
owns approximately 49% of Safra Republic Holdings S.A., a European-based bank
holding company with five banking subsidiaries located in France, Gibraltar,
Guernsey, Luxembourg and Switzerland.
THE MANHATTAN SAVINGS BANK
The Corporation's other significant bank subsidiary is Manhattan. At
December 31, 1992, Manhattan had total assets of $6.2 billion, total deposits of
$5.2 billion and total stockholder's equity of $427 million. Manhattan's
principal banking office is located at 415 Madison Avenue, New York, New York.
Manhattan has 26 full service branch banking offices in New York City and
Nassau, Suffolk and Westchester counties as well as 10 branches in Broward, Dade
and Marion counties, Florida.
Manhattan is engaged in the granting of mortgages on residential real
property located primarily in New York State, including one-to four-family
dwellings, units within condominium projects or units within cooperative housing
projects. Manhattan's deposit activities include accepting savings, demand,
money market, fixed-rate, individual retirement, Keogh and NOW accounts.
Manhattan also provides consumer credit and is active in the bond market. In
providing such banking services, Manhattan
3
<PAGE> 14
competes with other savings banks, thrift institutions, insurance companies,
domestic commercial banks and other providers of financial services.
REPUBLIC FACTORS CORP.
Factors, which is the Corporation's only other significant subsidiary,
engages in factoring activities, purchasing, without recourse, from
approximately 450 clients, accounts receivable from over 55,000 customers
primarily in the retail apparel industry throughout the United States, which are
due on average in 60 days, although certain clients receive payment for these
receivables prior to their maturity date. From time to time, Factors makes
advances to clients in excess of the receivables purchased. These advances are
seasonal in nature and may be either secured or unsecured. Letter of credit
accommodations are also provided. For these services, Factors earns commissions,
interest and service fees. Factors' headquarters and principal office is located
in New York, New York. In addition, Factors has offices located in Los Angeles,
California and Charlotte, North Carolina.
OTHER FINANCIAL SERVICE SUBSIDIARIES
With the approval of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board") on October 9, 1992, Republic New York Securities
Corporation ("RNYSC"), a wholly-owned subsidiary of the Corporation, commenced
operations on November 2, 1992 as a full-service securities brokerage whose
principal activities are prime brokerage, securities borrowing and lending,
margin lending, third party research and vendor services, correspondent
clearing, and asset management and fiduciary services offered primarily to
institutional investors and high net worth individuals. RNYSC is a registered
broker-dealer with the Commission and is a member of the National Association of
Securities Dealers, Inc. and the New York Stock Exchange, Inc. In addition, it
is an associate member of the American Stock Exchange and the Philadelphia Stock
Exchange. The Federal Reserve Board is considering the Corporation's application
for prior approval to engage in certain additional activities through RNYSC,
including underwriting and dealing in securities.
Republic Clearing Corporation ("RCC") is a wholly-owned subsidiary of the
Corporation. RCC has been active in the futures markets since 1977 and is
registered with the Commodity Futures Trading Commission and the National
Futures Association as a futures commission merchant. It is anticipated that the
Corporation will merge the operations of RCC with and into those of RNYSC during
the second quarter of 1993 in order to consolidate associated securities,
back-office, record keeping and related functions into one business unit.
The Corporation has received approval from the Federal Reserve Board to
engage in certain investment and financial advisory activities through its
wholly-owned subsidiary, Republic Asset Management Corporation ("RAM"). It is
anticipated that RAM will commence operations in the second quarter of 1993 and
will provide a broad range of investment, economic and financial advice to
individuals, corporations and governments, among others. RAM is a registered
investment advisor under the Investment Company Act of 1940 and is registered as
a commodity trading advisor and commodity pool operator with the Commodity
Futures Trading Commission.
SUPERVISION AND REGULATION
General. As a bank holding company registered under the Bank Holding Act of
1956, as amended (the "Act"), the Corporation is subject to substantial
regulation and supervision by the Federal Reserve Board. The Corporation's
subsidiary banks are subject to regulation and supervision by federal and state
bank regulatory agencies, including the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation ("FDIC") and the New York
State Banking Department. Federal banking and other laws impose a number of
requirements and restrictions on the operations and activities of depository
institutions. In addition, the federal banking agencies are currently
implementing recently enacted legislation that might result in additional
substantial restrictions on operations and activities, and increase operating
costs.
Holding Company Activities. Under the Act, bank holding companies may
engage directly, or indirectly through subsidiaries, in activities which the
Federal Reserve Board determines to be so
4
<PAGE> 15
closely related to banking or managing or controlling banks as to be a proper
incident thereto. Acquisitions of existing companies and engaging in activities
which the Federal Reserve Board has not theretofore determined to be permissible
for bank holding companies normally require specific Federal Reserve Board
approval. The Corporation, as well as its subsidiaries, is prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit, lease or provision of any property or services.
Capital Requirements. The Federal Reserve Board has established guidelines
implementing risk-based capital requirements for bank holding companies. The
guidelines, which became final at the end of 1992, provide that the minimum
ratio of total capital to risk-weighted assets (including certain off-balance
sheet activities, such as standby letters of credit and derivative instruments)
be equal to 8.0% of risk-weighted assets. Of this amount, at least half must be
composed of common equity, minority interests, noncumulative perpetual preferred
stock and a limited amount of cumulative perpetual preferred stock, less
goodwill ("Tier 1 capital"). The remainder may consist of certain amounts of
subordinated debt and cumulative preferred stock and a limited amount of the
allowance for loan losses ("Tier 2 capital").
In 1992, the Federal Reserve Board issued interpretations of its capital
regulations indicating, among other things, that subordinated debt of bank
holding companies issued on or after September 4, 1992 is not includable as Tier
2 capital for calculation of regulatory capital ratios if the subordinated debt
is subject, among other things, to certain covenants or rights of acceleration.
Unlike prior subordinated debt securities issued by the Corporation, the
Subordinated Securities issued under the 1992 Subordinated Indenture (as defined
herein) are intended to qualify as Tier 2 capital under these interpretations.
See "Description of Debt Securities -- The Indentures".
In addition to the risk-based capital requirements described above, the
Federal Reserve Board has also adopted a minimum leverage ratio (defined as Tier
1 capital divided by consolidated quarterly average total assets) for bank
holding companies. Bank holding companies that are experiencing significant
growth or are actively seeking acquisitions are expected to maintain a leverage
ratio of 4% to 5%.
In December 1992, the Federal Reserve Board approved a final rule altering
the method of computation of Tier 1 capital of bank holding companies. Subject
to certain exceptions, in calculating Tier 1 capital under the revised rule,
bank holding companies will be required to deduct all intangible assets other
than purchased mortgage servicing rights and purchased credit card
relationships, each valued at least quarterly at the lesser of 90% of their fair
market value or 100% of their book value, in an aggregate amount not exceeding
50% of Tier 1 capital. For purchased credit card relationships, the total may
not exceed 25% of Tier 1 capital. The new rule became effective on March 15,
1993.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), which became law in December 1991, further requires the federal bank
regulatory agencies bi-annually to review risk-based capital standards to ensure
that they adequately address interest rate risk, concentration of credit risk
and risks from non-traditional activities. Proposed regulations incorporating
concentrations of credit risk and risk from non-traditional activities into bank
capital requirements were proposed on March 29, 1993 and are currently being
reviewed by the Corporation.
Holding Company Liability. Under the Federal Reserve Board's policy, the
Corporation is expected to act as a source of financial strength to each of its
subsidiary banks and to commit resources to support such subsidiary banks in
circumstances in which it might not do so absent such policy. In addition, any
capital loans by the Corporation to any subsidiary bank are required to be
subordinated in right of payment to deposits and certain other indebtedness of
such subsidiary bank.
A bank holding company also could be liable under certain provisions of
FDICIA for the capital deficiencies of a subsidiary bank that does not satisfy
applicable minimum regulatory capital requirements. In such cases, the
subsidiary bank will be required to adopt a capital plan approved by the
appropriate bank regulators and the liability of the parent holding company is
limited to the lesser of 5% of the bank's assets at the time it became
"undercapitalized" or the amount needed to comply with
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<PAGE> 16
the capital plan and such liability is accorded a priority, in the event of the
bankruptcy of the parent holding company, over the parent's general unsecured
creditors.
It should be noted that the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") provides for cross-guarantees of the
liabilities of insured depository institutions pursuant to which any bank or
savings association subsidiary of a holding company may be required to reimburse
the FDIC for any loss or anticipated loss to the FDIC that arises from a default
of any of such holding company's other subsidiary banks or savings associations
or for assistance provided by the FDIC to such an institution in danger of
default. This right of recovery by the FDIC is generally superior to any claim
of the shareholders of the depository institution that is liable or any
affiliate of such institution. All of the domestic banking subsidiaries of the
Corporation are subject to such cross-guarantees.
New Banking Regulations. FDICIA revised sections of the Federal Deposit
Insurance Act affecting bank regulation, deposit insurance and funding of the
Bank Insurance Fund administered by the FDIC. FDICIA also revised bank
regulatory structures embodied in several other federal banking statutes,
required the federal banking regulators to set five capital levels ranging from
"well capitalized" to "critically undercapitalized", authorized federal banking
regulators to intervene in connection with the deterioration of a bank's capital
level, placed limits on real estate lending and tightened audit requirements.
Among other things, such new regulations adopt truth-in-savings disclosure
requirements and prohibit or limit the acceptance of brokered deposits by
insured financial institutions that do not meet the banking agencies' definition
of "well-capitalized". The bank regulatory agencies are also actively
considering proposals that affect a wide range of operational and managerial
matters, including asset quality, earnings, stock valuation and employee
compensation, limitations on activities of state-chartered banks, and new
reporting and audit requirements.
PRINCIPAL STOCKHOLDER
At December 31, 1992, there were 52,190,243 shares of Common Stock of the
Corporation outstanding. As of such date, Edmond J. Safra, through Saban S.A.
and one other entity, beneficially owned 14,989,212 shares of Common Stock,
representing approximately 28.7% of the Corporation's outstanding Common Stock.
The Corporation knows of no other stockholder who owned, as of December 31,
1992, beneficially or of record, more than 10% of its outstanding voting
securities.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1988 1989 1990 1991 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding interest on deposits........................ 1.68x 1.12x 1.38x 1.60x 1.66x
Including interest on deposits........................ 1.14 1.03 1.11 1.17 1.26
</TABLE>
For the purpose of computing the consolidated ratios of earnings to fixed
charges, earnings represent consolidated income before income taxes plus fixed
charges. Fixed charges excluding interest on deposits consist of interest on
long-term debt and short-term borrowings and one-third of rental expense (which
is deemed representative of the interest factor). Fixed charges including
interest on deposits consist of the foregoing items plus interest on deposits.
CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1988 1989 1990 1991 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding interest on deposits........................ 1.56x 1.01x 1.32x 1.51x 1.55x
Including interest on deposits........................ 1.12 1.00 1.10 1.15 1.23
</TABLE>
For the purpose of computing the consolidated ratios of earnings to
combined fixed charges and preferred stock dividends, earnings represent
consolidated income before income taxes plus fixed charges. Fixed charges and
preferred stock dividends excluding interest on deposits consist of interest on
long-term debt and short-term borrowings and one-third of rental expense (which
is deemed representative of the interest factor) and the pre-tax equivalent of
preferred stock dividends. Fixed
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<PAGE> 17
charges and preferred stock dividends including interest on deposits consist of
the foregoing items plus interest on deposits.
APPLICATION OF PROCEEDS
Except as may otherwise be provided in the Prospectus Supplement, the net
proceeds from the sale of the Securities will be used for general corporate
purposes. Pending ultimate application, the net proceeds may be used to make
short-term investments or reduce short-term borrowings.
Management anticipates that the Corporation may, from time to time, engage
in additional financings, which may include the issuance of debt and/or equity
securities otherwise than pursuant to this Prospectus.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Indentures under which the Debt Securities are to be
issued. The particular terms of each issue of Debt Securities, as well as any
modifications or additions to such general terms that may apply in the case of
such Debt Securities, will be described in the Prospectus Supplement relating to
such Debt Securities. Accordingly, for a description of the terms of a
particular issue of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and to the following description.
THE INDENTURES
Senior Securities have been and, if issued in the future, will be issued
under an Indenture dated as of May 15, 1986, as supplemented by a First
Supplemental Indenture dated as of May 15, 1991 and a Second Supplemental
Indenture dated as of April 15, 1993, between the Corporation and Citibank, N.A.
("Citibank"), as successor Trustee (said Indenture as so supplemented, the
"Senior Indenture"). Subordinated Securities have been and, if issued in the
future, may be issued under either an Indenture dated as of May 15, 1986, as
supplemented by a First Supplemental Indenture dated as of May 15, 1991 and a
Second Supplemental Indenture dated as of April 15, 1993, between the
Corporation and Citibank, as successor Trustee (said Indenture as so
supplemented, the "1986 Subordinated Indenture") or a separate Indenture dated
as of October 15, 1992 and a First Supplemental Indenture dated as of April 15,
1993 between the Corporation and Citibank, as Trustee (the "1992 Subordinated
Indenture"). The Senior Indenture, the 1986 Subordinated Indenture and the 1992
Subordinated Indenture are sometimes referred to herein collectively as the
"Indentures" and individually as an "Indenture".
The existence of both the 1986 Subordinated Indenture and the 1992
Subordinated Indenture reflects recent changes in the treatment of subordinated
debt securities for purposes of regulatory capital. In 1992, the Federal Reserve
Board issued interpretations of its capital regulations indicating, among other
things, that subordinated debt of bank holding companies issued on or after
September 4, 1992 is includable in capital for calculation of regulatory capital
ratios only if the subordination of the debt meets certain specified criteria
and if the debt may be accelerated only for bankruptcy, insolvency and similar
matters and is not subject to certain covenants, including a covenant
prohibiting the sale of any major subsidiary. Following this interpretation, the
Corporation entered into the 1992 Subordinated Indenture since it appeared that
the terms of the 1986 Subordinated Indenture might not satisfy these
requirements. Accordingly, to obtain the most favorable treatment for regulatory
capital purposes the 1992 Subordinated Indenture contains subordination and
acceleration provisions intended to be consistent with the 1992 Federal Reserve
Board interpretations and does not contain any covenant restricting the ability
of the Corporation to dispose of or issue stock of the Bank or addressing any
other matter prohibited by the Federal Reserve Board's interpretations. See
"Disposition or Issuance of Capital Stock of the Bank" and "Events of Default,
Notice and Waiver."
The Indentures have, and the supplemental indentures referred to herein
will be, filed as exhibits to the Registration Statement of which this
Prospectus is a part. Each Indenture is available for inspection at the
corporate trust office of Citibank at 120 Wall Street, 13th Floor, New York, New
York 10043. The following description of the Indentures and summaries of certain
provisions thereof do not
7
<PAGE> 18
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the respective Indentures. All section
references appearing herein are to sections of the applicable Indenture or
Indentures, and capitalized terms defined in the Indentures are used herein as
therein defined (unless otherwise defined herein).
There is no requirement that future issues of debt securities of the
Corporation be issued under any of the Indentures, and the Corporation is free
to employ other indentures or documentation, containing provisions different
from those included in the Indentures or applicable to one or more issues of
Debt Securities, in connection with future issues of such other debt securities.
GENERAL TERMS OF DEBT SECURITIES
Each Indenture provides that the Debt Securities issued thereunder may be
issued without limit as to aggregate principal amount, in one or more series, in
each case as established from time to time in or pursuant to authority granted
by a resolution of the Board of Directors of the Corporation or as established
in one or more indentures supplemental to such Indenture (Section 301 of the
Indentures). Each Indenture also provides that there may be more than one
Trustee under such Indenture, each with respect to one or more series of Debt
Securities. Any Trustee under any Indenture may resign or be removed with
respect to one or more series of Debt Securities issued under such Indenture,
and a successor Trustee may be appointed to act with respect to such series
(Section 610 of the Senior Indenture and the 1986 Subordinated Indenture, and
Section 608 of the 1992 Subordinated Indenture).
In the event that two or more persons are acting as Trustee with respect to
different series of Debt Securities issued under the same Indenture, each such
Trustee shall be a Trustee of a trust under such Indenture separate and apart
from the trust administered by any other such Trustee (Section 611 of the Senior
Indenture and the 1986 Subordinated Indenture, and Section 609 of the 1992
Subordinated Indenture), and, except as otherwise indicated herein, any action
described herein to be taken by the Trustee may be taken by each such Trustee
with respect to, and only with respect to, the one or more series of Debt
Securities for which it is Trustee under such Indenture.
Reference is made to the Prospectus Supplement relating to the Debt
Securities to be offered for the following terms thereof: (1) the title of the
Debt Securities; (2) any limit on the aggregate principal amount of the Debt
Securities; (3) the purchase price of the Debt Securities (expressed as a
percentage of the principal amount); (4) the date or dates on which the
principal (and premium, if any) of the Debt Securities will be payable; (5) the
rate or rates (which may be fixed or variable), or the method by which such rate
or rates shall be determined, at which the Debt Securities will bear interest,
if any; (6) the date or dates from which any such interest will accrue, the date
or dates on which any such interest will be payable and the Regular Record Dates
for such Interest Payment Dates; (7) the place or places where the principal of
(and premium, if any) and interest, if any, on the Debt Securities will be
payable; (8) the period or periods within which, the price or prices at which
and the terms and conditions upon which the Debt Securities may be redeemed, as
a whole or in part, at the option of the Corporation, if the Corporation is to
have such an option; (9) the obligation, if any, of the Corporation to redeem or
purchase the Debt Securities pursuant to any sinking fund or analogous provision
or at the option of a Holder thereof, and the period or periods within which,
the price or prices at which and the terms and conditions upon which the Debt
Securities will be redeemed or purchased, as a whole or in part, pursuant to
such obligation; (10) the currency or currencies in which the Debt Securities
are denominated, which may be in U.S. dollars, a foreign currency or units of
two or more foreign currencies or a composite currency or currencies; (11)
whether the amount of payments of principal of (and premium, if any) or
interest, if any, on the Debt Securities may be determined with reference to an
index, formula or other method (which index, formula or method may, but need not
be, based on a currency, currencies, currency unit or units or composite
currency or currencies) and the manner in which such amounts shall be
determined; (12) any additions or deletions in the terms of the Debt Securities
with respect to the Events of Default set forth in the respective Indentures;
(13) the terms, if any, upon which the Debt Securities may be convertible into
Common Stock or Preferred Stock of the Corporation and the terms and conditions
upon which such conversion will be effected, including the initial conversion
price or rate, the conversion period and any other provision in addition to or
in lieu of
8
<PAGE> 19
those described herein; (14) whether the Debt Securities will be issued in
certificated or book-entry form; and (15) any other terms of the Debt Securities
not inconsistent with the provisions of the respective Indentures. Principal,
premium, if any, and interest, if any, will be payable, and the Debt Securities
will be transferable, in the manner described in the applicable Prospectus
Supplement relating to such Debt Securities.
Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be offered and sold at a substantial discount from the
principal amount thereof. Special federal income tax, accounting and other
considerations applicable thereto will be described in the applicable Prospectus
Supplement.
Unless otherwise provided with respect to a series of Debt Securities, the
Debt Securities will be issued only in registered form without coupons in
denominations of $1,000 and integral multiples thereof (Section 302 of the
Indentures).
CERTIFICATED SECURITIES
Except as may be set forth in the applicable Prospectus Supplement, Debt
Securities will not be issued in definitive form. If, however, Debt Securities
are to be issued in definitive form, no service charge will be made for any
transfer or exchange of Debt Securities issued as Certificated Securities, but
the Corporation may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith (Section 305 of the
Indentures).
BOOK-ENTRY SECURITIES
General. It is expected that Debt Securities will be issued as global
securities registered in the name of The Depository Trust Company, New York, New
York, or a successor thereof (which successor shall be a clearing agency
registered under the Exchange Act if so required by applicable law) (The
Depository Trust Company or such successor being herein referred to as the
"Depository"), and registered in the name of the Depository or a nominee
thereof. Such global securities (each a "Global Security") will be issued only
for Debt Securities having the same tenor and terms.
Upon the issuance of any Global Security, the Depository will credit, on
its book-entry registration and transfer system, the respective principal amount
of the Book-Entry Securities represented by such Global Security to the accounts
of institutions that have accounts with the Depository ("participants"). The
accounts to be credited shall be designated by the underwriter or agent, or by
the Corporation if such Book-Entry Securities are to be offered and sold
directly by the Corporation. Ownership of beneficial interests in a Global
Security will be limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests in a Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the Depository or its nominee for such Global
Security (with respect to interests of participants) or by participants or
persons that hold through participants (with respect to interests of persons
other than participants). The laws of certain states require that certain
purchasers of securities take physical delivery of such securities as
certificates issued in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
Principal, premium, if any, and interest payments on Book-Entry Securities
will be made to the Depository or its nominee, as the case may be, as the
registered holder of the Global Security representing such Book-Entry
Securities. The Corporation has been advised that the Depository or its nominee,
upon receipt of any payment of principal, premium, if any, or interest in
respect of a Global Security, will immediately credit participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Global Security as shown on the records of the
Depository or its nominee. The Corporation also expects that payments by
participants (or by persons that hold interests for customers through
participants) to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in
9
<PAGE> 20
"street name", and will be the responsibility of such participants (or of such
persons that hold interests for customers through participants).
Each owner of a beneficial interest in a Global Security must ensure that
the person through whom its interest is held (i.e., either a participant or
other person that holds interests through a participant) maintains accurate
records of such owner's beneficial interest in the Global Security. The
interests of participants (which may be in the form of a custodial relationship)
will be shown on records maintained by the Depository for such Global Security.
The designation of the Depository or its nominee as custodian for participants
and persons that hold interests through participants (either as principal,
nominee or custodian) will be shown on the Register maintained by the Trustee.
Neither the Corporation nor any underwriter or agent (unless beneficial
interests in Global Securities are held through such underwriter or agent for
its customer) will have any responsibility or liability for any aspect of the
records relating to, or for payments made on account of beneficial ownership
interests in, a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
If the Depository notifies the Corporation that it is unwilling or unable
to continue as Depository for the Global Securities representing the Book-Entry
Securities or if at any time the Depository ceases to be a clearing agency
registered under the Exchange Act if so required by applicable law or
regulation, and, in either case, a successor depository is not appointed by the
Corporation within 90 days, the Corporation will issue Certificated Securities
in exchange for such Global Securities. In addition, the Corporation may at any
time and in its sole discretion determine not to have any Securities represented
by Global Securities and, in such event, will issue Certificated Securities in
exchange for all of the Global Securities. Furthermore, after the occurrence of
an Event of Default, holders representing a majority in principal amount of each
series of Book-Entry Securities then outstanding may advise the Depository
through its participants to cease acting as depositary for the Global Securities
of such series, and, in such event, the Corporation will issue Certificated
Securities in exchange for such Global Securities. The Certificated Securities
so issued in exchange for such Global Securities shall be in the same minimum
denominations and be of like aggregate principal amount and tenor as the portion
of each such Global Security to be exchanged. Except as provided above, owners
of beneficial interests in a Global Security will not be entitled to receive
physical delivery of Certificated Securities and will not be considered the
registered holders of such Securities for any purpose (including receiving
payments of principal, premium, if any, and interest).
Unless and until it is exchanged for Certificated Securities, a Global
Security may not be transferred except as a whole by the Depository for such
Global Securities to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by the
Depository or any such nominee to a successor of such Depository or a nominee of
such successor.
Information Concerning the Depository. The Depository is a limited-purpose
trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. The Depository was created to
hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depository's participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depository. Access to the Depository's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
The information in this section concerning the Depository and its
book-entry system has been obtained from sources that the Corporation believes
to be reliable, but the Corporation takes no responsibility for the accuracy
thereof.
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<PAGE> 21
MERGER
The Indentures provide that the Corporation may not consolidate with or
merge into another Person or participate in a transaction in which all of the
issued and outstanding shares of its Capital Stock are acquired by another
Person by a vote of the Corporation's stockholders or sell, convey, exchange,
transfer or lease its properties and assets substantially as an entirety to any
Person unless (a) such Person shall be a corporation organized under the laws of
any domestic or foreign jurisdiction and shall expressly assume the due and
punctual payment of the principal of and interest (and premium, if any) on the
Debt Securities and the performance of all of the covenants and conditions of
the Indentures and (b) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time, or both,
would become an Event of Default, shall have happened and be continuing (Section
801 of the Indentures).
DISPOSITION OR ISSUANCE OF CAPITAL STOCK OF THE BANK
Senior Indenture and 1986 Subordinated Indenture. The Senior Indenture and
the 1986 Subordinated Indenture prohibit the issuance, sale or other disposition
of Capital Stock, or securities convertible into, or options, warrants or rights
to acquire, Capital Stock of the Bank or of any Subsidiary which owns shares of
Capital Stock, or securities convertible into, or options, warrants or rights to
acquire, Capital Stock of the Bank, with the following exceptions: (a)
dispositions of directors' qualifying shares; (b) sales or other dispositions
for fair market value, if, after giving effect to such disposition and to
conversion of any shares or securities convertible into Capital Stock, the
Corporation would own directly or indirectly not less than 80% of each class of
the Capital Stock of the Bank; (c) sales or other dispositions made in
compliance with an order of a court or regulatory authority of competent
jurisdiction; (d) sales by the Bank of its Capital Stock, or securities
convertible into, or options, warrants or rights to acquire, its Capital Stock,
to its stockholders so long as prior to such sale the Corporation owned
securities of the same class and the sale does not reduce the percentage of
securities of such class owned by the Corporation; and (e) any issuance of
Capital Stock, or securities convertible into, or options, warrants or rights to
acquire, Capital Stock, of the Bank or any Subsidiary of the Corporation or
another Subsidiary (Section 1007 of the Senior Indenture and the 1986
Subordinated Indenture).
1992 Subordinated Indenture. Unlike the Senior Indenture and the 1986
Subordinated Indenture, the 1992 Subordinated Indenture does not prohibit or
limit the issuance, sale or other disposition of Capital Stock of the Bank, or
securities convertible into, or options, warrants or rights to acquire, Capital
Stock of the Bank or of any Subsidiary which owns shares of Capital Stock, or
securities convertible into, or options, warrants or other rights to acquire,
Capital Stock of the Bank. Under the Federal Reserve Board's interpretations
referred to above, a limitation on the disposition or issuance of Capital Stock
of the Bank would prevent the Subordinated Securities issued under the 1992
Subordinated Indenture from being included in capital for calculation of
regulatory capital ratios. See "The Indentures" above.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Senior Indenture and 1986 Subordinated Indenture. The Senior Indenture and
the 1986 Subordinated Indenture provide that the following events are Events of
Default thereunder with respect to any series of Debt Securities issued
thereunder: (a) default for 30 days in the payment of any installment of
interest on any Debt Security of such series; (b) default in the payment of the
principal of (or premium, if any, on) any Debt Security of such series at its
Maturity; (c) default in making a sinking fund payment or analogous obligation,
if any, or payment of the purchase price of any Debt Security of such series,
when and as the same shall be due and payable by the terms of the Debt
Securities of such series; (d) default in the performance of any other covenant
of the Corporation in such Indentures (other than a covenant included in such
Indentures solely for the benefit of a series of Debt Securities other than such
series), continued for 90 days after written notice as provided in such
Indenture; (e) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of the Corporation or its
property or the Bank; and (f) any other Event of Default
11
<PAGE> 22
provided with respect to a particular series of Debt Securities (Section 501 of
the Senior Indenture and the 1986 Subordinated Indenture). No Event of Default
with respect to a particular series of Debt Securities (except the events
described in clause (e) above) necessarily constitutes an Event of Default with
respect to any other series of Debt Securities issued under the same or another
Indenture.
The Trustee may withhold notice to the Holders of any series of Debt
Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium, if any) or interest, if any, on any
Debt Security of such series or in the payment of any sinking fund installment
or analogous payment obligation or any payment of the purchase price of any Debt
Security of such series) if the board of directors or Responsible Officers of
the Trustee consider such withholding to be in the interest of such Holders
(Section 602 of the Senior Indenture and the 1986 Subordinated Indenture).
If an Event of Default described in clause (a), (b), (c) or (f) above with
respect to Debt Securities of any series at the time Outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in 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 Securities, such portion of the principal amount as may
be specified in the terms of that series) of all of the Debt Securities of that
series to be due and payable immediately. If an Event of Default described in
clause (d) or (e) above occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of all the Debt
Securities then Outstanding under the Senior Indenture or the 1986 Subordinated
Indenture, as the case may be ("Senior/Old Subordinated Indenture Securities"),
may declare the principal amount (or, if any such Senior/Old Subordinated
Indenture Securities are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all of the
Senior/Old Subordinated Indenture Debt Securities to be due and payable
immediately. However, at any time after such a declaration of acceleration with
respect to Debt Securities of such series (or of all Outstanding Senior/Old
Subordinated Indenture Securities, as the case may be) has been made, but before
a judgment or decree for payment of the money due has been obtained by the
Trustee prior to the Stated Maturity thereof, the Holders of a majority in
principal amount of Outstanding Debt Securities of such series (or of all
Outstanding Senior/Old Subordinated Indenture Securities, as the case may be)
may, subject to certain conditions, rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal (or
specified portion thereof), with respect to Debt Securities of such series (or
of all Outstanding Senior/Old Subordinated Indenture Securities, as the case may
be) have been cured or waived as provided in the Senior Indenture and the 1986
Subordinated Indenture (Section 502 of the Senior Indenture and the 1986
Subordinated Indenture). The Senior Indenture and the 1986 Subordinated
Indenture also provide that the Holders of not less than a majority in principal
amount of the Debt Securities of a series (or of all Outstanding Senior/Old
Subordinated Indenture Securities, as the case may be) may, subject to certain
limitations, waive any past default and its consequences (Section 513 of the
Senior Indenture and the 1986 Subordinated Indenture). Reference is made to the
Prospectus Supplement relating to any series of Debt Securities which are
Original Issue Discount Securities for the particular provisions relating to
acceleration of a portion of the principal amount of such Original Issue
Discount Securities upon the occurrence of an Event of Default and the
continuation thereof. Within 120 days after the close of each fiscal year, the
Corporation must file with the Trustee a statement, signed by specified
officers, stating whether or not such officers have knowledge of any default,
and, if so, specifying each such default and the nature and status thereof
(Section 1005 of the Senior Indenture and the 1986 Subordinated Indenture).
Subject to provisions in the Senior Indenture and the 1986 Subordinated
Indenture relating to its duties in case of default, the Trustee thereunder is
under no obligation to exercise any of its rights or powers under such
Indentures at the request, order or direction of any Holders of any series of
Outstanding Senior/Old Subordinated Indenture Securities, unless such Holders
shall have offered to the Trustee thereunder reasonable security or indemnity
(Section 603 of the Senior Indenture and the 1986 Subordinated Indenture).
Subject to such provisions for indemnification and certain limitations contained
in the Senior Indenture and the 1986 Subordinated Indenture, the Holders of not
less than a
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majority in principal amount of the Outstanding Debt Securities of a series (or
of all the Outstanding Senior/Old Subordinated Indenture Securities, as the case
may be) shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee thereunder, or of
exercising any trust or power conferred upon such Trustee (Section 512 of the
Senior Indenture and the 1986 Subordinated Indenture).
1992 Subordinated Indenture. The 1992 Subordinated Indenture provides that
the following events are the only Events of Default thereunder with respect to
any series of Subordinated Securities issued thereunder: (a) default for 30 days
in the payment of any installment of interest on any Subordinated Security of
such series; (b) default in the payment of the principal of (or premium, if any,
on) any Subordinated Security of such series at its Maturity; (c) default in
making a sinking fund payment or analogous obligation, if any, or payment of the
purchase price of any Subordinated Security of such series, when and as the same
shall be due and payable by the terms of the Subordinated Securities of such
series; (d) certain events relating to the bankruptcy, insolvency or
reorganization of the Corporation or the appointment of a receiver for the Bank;
and (e) any other Event of Default provided with respect to a particular series
of Subordinated Securities (Section 501 of the 1992 Subordinated Indenture). No
Event of Default with respect to a particular series of Subordinated Securities
other than the event described in clause (d) above necessarily constitutes an
Event of Default with respect to any other series of Subordinated Securities
issued under the same or another Indenture.
Unless provided with respect to a particular series of Subordinated
Securities issued under the 1992 Subordinated Indenture, there will be no right
of acceleration of the payment of principal of the Subordinated Securities
issued under the 1992 Subordinated Indenture upon a default in the payment of
principal or interest on such Subordinated Securities or in the performance of
any covenant or agreement contained in such Subordinated Securities or in the
1992 Subordinated Indenture. Under the 1992 Subordinated Indenture, payment of
principal of the Subordinated Securities may only be accelerated upon the
occurrence of certain events relating to the bankruptcy, insolvency or
reorganization of the Corporation or the appointment of a receiver for the Bank.
Inclusion of any rights of acceleration other than those set forth above would
prevent the Subordinated Securities issued under the 1992 Subordinated Indenture
from being included as regulatory capital. See "The Indentures" above. As a
result, the Events of Default under the 1992 Subordinated Indenture are narrower
than those under the Senior Indenture and the 1986 Subordinated Indenture.
As with the Senior Indenture and the 1986 Subordinated Indenture, the
Trustee may withhold notice to the Holders of any series of Subordinated
Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium, if any) or interest, if any, on any
Subordinated Security of such series or in the payment of any sinking fund
installment or analogous payment obligation or any payment of the purchase price
of any security of such series) if the board of directors or Responsible
Officers of the Trustee consider such withholding to be in the interest of such
Holders (Section 601 of the 1992 Subordinated Indenture).
If an Event of Default described in clause (e) above with respect to
Subordinated Securities of any series at the time Outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in principal amount of the Outstanding Subordinated Securities of that
series may declare the principal amount (or, if the Subordinated Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all of the
Subordinated Securities of that series to be due and payable immediately. If an
Event of Default described in clause (d) above occurs and is continuing, then in
each such case the Trustee or the Holders of not less than 25% in principal
amount of all the Subordinated Securities then Outstanding under the 1992
Subordinated Indenture ("New Subordinated Indenture Securities") may declare the
principal amount (or, if any such New Subordinated Indenture Securities are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of that series) of all of the New Subordinated
Indenture Securities to be due and payable immediately. However, at any time
after such a declaration of acceleration with respect to Subordinated Securities
of such series (or of all Outstanding New Subordinated Indenture Securities, as
the case may be) has
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<PAGE> 24
been made, but before a judgment or decree for payment of the money due has been
obtained by the Trustee prior to the Stated Maturity thereof, the Holders of a
majority in principal amount of Outstanding Subordinated Securities of such
series (or of all Outstanding New Subordinated Indenture Securities, as the case
may be) may, subject to certain conditions, rescind and annul such acceleration
if all Events of Default with respect to Subordinated Securities of such series
(or of all Outstanding New Subordinated Indenture Securities, as the case may
be) have been cured or waived as provided in such Indenture (Section 502 of the
1992 Subordinated Indenture). The 1992 Subordinated Indenture also provides that
the Holders of not less than a majority in principal amount of the Outstanding
New Subordinated Indenture Securities of a series (or of all Outstanding New
Subordinated Indenture Securities, as the case may be) may, subject to certain
limitations, waive any past Events of Default and their consequences (Section
513 of the 1992 Subordinated Indenture). Reference is made to the Prospectus
Supplement relating to any series of Subordinated Securities which are Original
Issue Discount Securities for the particular provisions relating to acceleration
of a portion of the principal amount of such Original Issue Discount Securities
upon the occurrence of an Event of Default and the continuation thereof. Within
120 days after the close of each fiscal year, the Corporation must file with the
Trustee a statement, signed by a specified officer, stating whether or not such
officer has knowledge of any default, and, if so, specifying each such default
and the nature and status thereof (Section 1005 of the 1992 Subordinated
Indenture).
Subject to provisions in the 1992 Subordinated Indenture relating to its
duties in case of default, the Trustee thereunder is under no obligation to
exercise any of its rights or powers under such Indenture at the request, order
or direction of any Holders of any series of Outstanding New Subordinated
Indenture Securities, unless such Holders shall have offered to the Trustee
thereunder reasonable security or indemnity (Section 602 of the 1992
Subordinated Indenture). Subject to such provisions for indemnification and
certain limitations contained in the 1992 Subordinated Indenture, the Holders of
not less than a majority in principal amount of the Outstanding Subordinated
Securities of a series (or of all the Outstanding Indenture Securities, as the
case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee thereunder, or
of exercising any trust or power conferred upon such Trustee (Section 512 of the
1992 Subordinated Indenture).
MODIFICATION OF THE INDENTURES
Senior Indenture and 1986 Subordinated Indenture. Except as to
modifications not adverse to the Holders of any series of Debt Securities issued
thereunder, modifications and amendments of the Senior Indenture and the 1986
Subordinated Indenture may be made only with the consent of the Holders of not
less than a majority in aggregate principal amount of all Outstanding Senior/Old
Subordinated Indenture Securities which are affected by the modification or
amendment; provided that no such modification or amendment may, without the
consent of the Holder of each such Debt Security affected thereby, (a) change
the Stated Maturity of the principal of, or any installment of interest (or
premium, if any) on, any Debt Security; (b) reduce the principal amount of, or
the rate of interest on, or any premium payable on redemption of, such Debt
Security, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon declaration of acceleration of the
Maturity thereof or would be provable in bankruptcy; (c) change the Place of
Payment, or the coin or currency, for payment of principal of, premium, if any,
or interest on any such Debt Security; (d) impair the right to institute suit
for the enforcement of any payment on or with respect to any such Debt Security;
(e) reduce the above-stated percentage of Outstanding Debt Securities of any
series necessary to modify or amend such Indentures; (f) subordinate the
indebtedness evidenced by the Senior Securities to any indebtedness of the
Corporation, or subordinate the indebtedness evidenced by the Subordinated
Securities issued thereunder to any indebtedness of the Corporation other than
Senior Indebtedness (as defined therein); or (g) modify the foregoing
requirements other than to increase such percentage or add to the amendments
which may not be made without the consent of the Holder of each Debt Security
affected thereby (Section 902 of the Senior Indenture and the 1986 Subordinated
Indenture). However, the Holders of a majority in aggregate principal amount of
all of
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<PAGE> 25
the Outstanding Senior/Old Subordinated Indenture Securities may waive
compliance by the Corporation with the restrictions described under the
subheading "Disposition or Issuance of Capital Stock of the Bank" (Section 1009
of the Senior Indenture and the 1986 Subordinated Indenture).
1992 Subordinated Indenture. Except as to modifications not adverse to the
Holders of any series of Subordinated Securities issued thereunder,
modifications and amendments of the 1992 Subordinated Indenture may be made only
with the consent of the Holders of not less than a majority in aggregate
principal amount of all Outstanding New Subordinated Indenture Securities which
are affected by the modification or amendment; provided that no such
modification or amendment may, without the consent of the Holder of each such
Subordinated Security affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of interest (or premium, if any) on, any
Subordinated Security; (b) reduce the principal amount of, or the rate of
interest on, or any premium payable on redemption of, such Subordinated
Security, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon declaration of acceleration of the
Maturity thereof or would be provable in bankruptcy; (c) change the Place of
Payment, or the coin or currency, for payment of principal of, premium, if any,
or interest on any such Subordinated Security; (d) impair the right to institute
suit for the enforcement of any payment on or with respect to any such
Subordinated Security; (e) reduce the above-stated percentage of Outstanding
Securities of any series necessary to modify or amend such Indenture; (f)
subordinate the indebtedness evidenced by the Subordinated Securities issued
thereunder to any indebtedness of the Corporation other than Senior Indebtedness
(as defined therein); or (g) modify the foregoing requirements other than to
increase such percentage or add to the amendments which may not be made without
the consent of the Holder of each Subordinated Security affected thereby
(Section 902 of the 1992 Subordinated Indenture).
SENIOR SECURITIES
Senior Securities are to be issued under the Senior Indenture. Each series
of Senior Securities will constitute Senior Indebtedness and will rank equally
with each other series of Senior Securities and other Senior Indebtedness. All
subordinated debt (including, but not limited to, all Subordinated Securities
issued under the 1986 Subordinated Indenture and the 1992 Subordinated
Indenture) will be subordinated to the Senior Securities and other Senior
Indebtedness (as defined in the relevant Indenture).
SUBORDINATION OF SUBORDINATED SECURITIES
1986 Subordinated Indenture. The payment of the principal of and interest
on the Subordinated Securities issued under the 1986 Subordinated Indenture will
be subordinated in right of payment, as set forth in the 1986 Subordinated
Indenture, to the prior payment in full of all Senior Indebtedness (as defined
therein) of the Corporation, whether outstanding on the date of the 1986
Subordinated Indenture or thereafter incurred. Senior Indebtedness is defined in
the 1986 Subordinated Indenture as (a) the principal of and premium, if any, and
unpaid interest on indebtedness for money borrowed, (b) purchase money and
similar obligations, (c) obligations under capital leases, (d) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Corporation is responsible for the payment of, such
indebtedness of others, (e) renewals, extensions and refunding of any such
indebtedness and (f) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings;
unless, in each case, the instrument by which the Corporation incurred, assumed
or guaranteed such indebtedness expressly provides that such indebtedness is
subordinate or junior in right of payment to any other indebtedness of the
Corporation (Section 101 of the 1986 Subordinated Indenture). At December 31,
1992, the aggregate Senior Indebtedness of the Corporation, as defined in the
1986 Subordinated Indenture, was approximately $975 million.
1992 Subordinated Indenture. The payment of the principal of and interest
on the Subordinated Securities issued under the 1992 Subordinated Indenture will
be subordinated as set forth in the 1992 Subordinated Indenture to the Senior
Indebtedness of the Corporation, whether outstanding on the date of the 1992
Subordinated Indenture or thereafter incurred. Senior Indebtedness is defined in
the
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<PAGE> 26
1992 Subordinated Indenture to include both obligations defined as Senior
Indebtedness in the 1986 Subordinated Indenture and Other Obligations which are
defined as including obligations associated with derivative products, such as
interest rate and currency exchange contracts, foreign exchange contracts,
commodity contracts and similar arrangements. Thus, Senior Indebtedness is
defined in the 1992 Subordinated Indenture in a broader manner than in the 1986
Subordinated Indenture (Section 101 of the 1992 Subordinated Indenture). At
December 31, 1992, the aggregate Senior Indebtedness of the Corporation, as
defined in the 1992 Subordinated Indenture, was approximately $988 million.
Ranking. No class of Subordinated Securities is subordinated to any other
class of subordinated debt securities; Subordinated Securities issued under the
1992 Subordinated Indenture are, however, expressly subordinated to a broader
group of Senior Indebtedness than is the case with respect to the Holders of
Subordinated Securities issued under the 1986 Subordinated Indenture. See "1992
Subordinated Indenture" above. Thus, in a bankruptcy or insolvency of the
Corporation, the holders of such Subordinated Securities may receive less,
ratably, than holders of Subordinated Securities issued under the 1986
Subordinated Indenture. See "1992 Subordinated Indenture" above and
"Subordination Provisions" below.
Subordination Provisions. In the event (a) of any distribution of assets
of the Corporation upon any dissolution, winding up, liquidation or
reorganization of the Corporation, whether in bankruptcy, insolvency,
reorganization or receivership proceedings or upon an assignment for the benefit
of creditors or any other marshalling of the assets and liabilities of the
Corporation or otherwise, except a distribution in connection with a merger or
consolidation or a conveyance or transfer of all or substantially all of the
properties of the Corporation which complies with the requirements of Article
Eight of the 1986 Subordinated Indenture or the 1992 Subordinated Indenture, as
the case may be, or (b) that a default shall have occurred and be continuing
with respect to the payment of principal of (or premium, if any) or interest on
any Senior Indebtedness, as defined in the relevant Indenture (excluding, in the
case of the 1992 Subordinated Indenture, the Other Obligations), or (c) that the
principal of the Subordinated Securities of any series issued under such
Indenture (or in the case of Original Issue Discount Securities, the portion of
the principal amount thereof referred to in Section 502 of the 1986 Subordinated
Indenture or the 1992 Subordinated Indenture, as the case may be) shall have
been declared due and payable pursuant to Section 502 of the 1986 Subordinated
Indenture or the 1992 Subordinated Indenture, as the case may be, and such
declaration shall not have been rescinded and annulled as provided in said
Section 502, then:
(1) in a circumstance described in the foregoing clause (a) or (b),
the holders of all Senior Indebtedness, as defined in the relevant
Indenture (excluding, in the case of the 1992 Subordinated Indenture, the
Other Obligations), and in the circumstance described in the foregoing
clause (c), the holders of all Senior Indebtedness, as defined in the
relevant Indenture (excluding, in the case of the 1992 Subordinated
Indenture, the Other Obligations), outstanding at the time the principal of
such Subordinated Securities issued under such Indenture (or in the case of
Original Issue Discount Securities, such portion of the principal amount)
shall have been so declared due and payable, shall first be entitled to
receive payment of the full amount due thereon in respect of principal,
premium (if any) and interest, or provision shall be made for such payment
in money or money's worth, before the Holders of any of the Subordinated
Securities issued under any Indenture are entitled to receive any payment
on account of the principal of (or premium, if any) or interest on the
indebtedness evidenced by the Subordinated Securities;
(2) if upon any payment or distribution contemplated in clause (1)
after giving effect to the subordination provisions contemplated therein
there shall remain any amounts of cash, property or securities of the
Corporation available for payment or distribution in respect of
Subordinated Securities, then the amount of such cash, property or
securities shall be shared ratably among the Holders of all Subordinated
Securities issued under the 1986 Subordinated Indenture and the 1992
Subordinated Indenture and any subordinated indebtedness ranking on a
parity therewith; provided, however, that in the case of a circumstance
described in the foregoing clause (a), if at such time any creditors in
respect of Other Obligations (as defined in the 1992 Subordinated
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Indenture) have not then received payment in full of all amounts due or to
become due on or in respect of such Other Obligations, then the ratable
portion of cash, property or securities distributable to the Holders of
Subordinated Securities issued under the 1992 Subordinated Indenture shall
first be applied to pay or provide for the payment in full of all of the
Other Obligations before any payment or distribution may be made in respect
of Subordinated Securities issued under the 1992 Subordinated Indenture;
(3) any payment by, or distribution of assets of, the Corporation of
any kind or character, whether in cash, property or securities (other than
certain subordinated securities of the Corporation issued in a
reorganization or readjustment), to which the Holders of any of the
Securities or the Trustee would be entitled except for the provisions of
Article Fourteen of the 1986 Subordinated Indenture or the 1992
Subordinated Indenture, as the case may be, shall be paid or delivered by
the Person making such payment or distribution directly to the holders of
Senior Indebtedness (other than Other Obligations) or to the holders of
Other Obligations, as the case may be (as provided in clauses (1) and (2)
above), or on their behalf, ratably according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness (other than Other
Obligations) or Other Obligations, as the case may be, held or represented
by each, to the extent necessary to make payment in full of all Senior
Indebtedness (other than Other Obligations) or Other Obligations, as the
case may be (as provided in clauses (1) and (2) above), remaining unpaid
after giving effect to any concurrent payment or distribution (or provision
therefor) to the holders of such Senior Indebtedness, before any payment or
distribution is made to or in respect of the holders of the Subordinated
Securities, as contemplated in clause (1) above, or the holders of
Subordinated Securities issued under the 1992 Subordinated Indenture as
contemplated by clause (2) above;
(4) in the event that, notwithstanding the foregoing, any payment by,
or distribution of assets of, the Corporation of any kind or character
described in the foregoing clause (a) is received by the Trustee under the
1986 Subordinated Indenture or the 1992 Subordinated Indenture, as the case
may be, or the Holders of any of the Subordinated Securities issued under
either of such Indentures, before all Senior Indebtedness, as defined in
the relevant Indenture, is paid in full, such payment or distribution shall
be paid over to the holders of such Senior Indebtedness or on their behalf,
ratably as aforesaid, for application to the payment of all such Senior
Indebtedness remaining unpaid until all such Senior Indebtedness, as
defined in the relevant Indenture, shall have been paid in full, after
giving effect to any concurrent payment or distribution (or provision
therefor) to the holders of such Senior Indebtedness.
By reason of such subordination in favor of the Holders of Senior
Indebtedness in the event of insolvency, creditors of the Corporation who are
not Holders of Senior Indebtedness or of the Subordinated Securities may recover
less, ratably, than Holders of Senior Indebtedness and may recover more,
ratably, than the Holders of the Subordinated Securities. By reason of the
obligation of the Holders of Subordinated Securities issued under the 1992
Subordinated Indenture to pay over any cash, property and securities to
creditors in respect of Other Obligations, in the event of insolvency, holders
of Existing Subordinated Indebtedness may recover less, ratably, than creditors
in respect of Other Obligations and may recover more, ratably, than the Holders
of Subordinated Securities issued under the 1992 Subordinated Indenture.
OUTSTANDING AMOUNT OF SUBORDINATED SECURITIES
Subordinated Securities issued under the relevant Indenture are not
subordinated to the Corporation's issues of Putable Capital Notes, Floating Rate
Subordinated Notes due 2009 and 2010, 9.70% Subordinated Notes due 2009, 9 1/2%
Subordinated Notes due 2014, 9 1/2% Subordinated Notes due 2000, 9 3/4%
Subordinated Notes due 2000, 8 7/8% Subordinated Notes due 2001, 9 1/8%
Subordinated Notes due 2021, 9.30% Subordinated Notes due 2021, 8.25%
Subordinated Notes due 2001, 7 7/8% Subordinated Notes due 2001, 7 3/4%
Subordinated Notes due 2002, 7 1/4% Subordinated Notes due 2002, Floating Rate
Subordinated Notes due 2002, Floating Rate Subordinated Notes due October 28,
2002 and Subordi-
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nated Floating Rate Yield Curve Notes due 2002, outstanding in the aggregate
principal amount of $2.125 billion as of the date hereof. See "Subordination of
Subordinated Securities -- Ranking" above.
CONCERNING CITIBANK
The Corporation and the Bank maintain deposit accounts and conduct banking
transactions with Citibank and Citicorp, the parent of Citibank, in the ordinary
course of their businesses. Citibank has made available a $20 million line of
credit to support obligations on commercial paper of the Corporation.
CONVERTIBLE DEBT SECURITIES
The following provisions will apply to Debt Securities that will be
convertible into Common Stock or Preferred Stock (the "Convertible Debt
Securities") unless otherwise provided in the Prospectus Supplement for such
Debt Securities.
Conversion. The holder of any Convertible Debt Securities will have the
right, exercisable at any time during the time period specified in the
applicable Prospectus Supplement, unless previously redeemed by the Corporation,
to convert such Convertible Debt Securities into shares of Common Stock or
Preferred Stock at the conversion rate for each $1,000 principal amount of
Convertible Debt Securities set forth in the Prospectus Supplement. The holder
of a Convertible Debt Security may convert a portion thereof which is $1,000 or
any integral multiple of $1,000 (Section 1402 of the Senior Indenture and
Section 1502 of the 1986 and 1992 Subordinated Indentures). In the case of
Convertible Debt Securities called for redemption, conversion rights will expire
at the close of business on the date fixed for the redemption specified in the
Prospectus Supplement, except that, in the case of redemption at the option of
such holder, if applicable, such right will terminate upon receipt of written
notice of the exercise of such option (Section 1402 of the Senior Indenture and
Section 1502 of the 1986 and 1992 Subordinated Indentures).
In certain events, the conversion price or rate will be subject to
adjustment as contemplated in the applicable Indenture. For Debt Securities
convertible into Common Stock, such events include the issuance of shares of
Common Stock of the Corporation as a dividend; subdivisions and combinations of
Common Stock; the issuance to all holders of Common Stock of rights or warrants
entitling such holders (for a period not exceeding 45 days) to subscribe for or
purchase shares of Common Stock at a price per share less than the current
market price per share of Common Stock; and the distribution to all holders of
Common Stock of shares of capital stock of the Corporation (other than Common
Stock), evidences of indebtedness of the Corporation or of assets (excluding
cash dividends paid from retained earnings and dividends payable in Common Stock
for which adjustment is made as referred to above) or subscription rights or
warrants (other than those referred to above). In any of such cases, no
adjustment of the conversion price or rate will be required unless an adjustment
would require a cumulative increase or decrease of at least 1% in such price or
rate (Section 1405 of the Senior Indenture and Section 1505 of the 1986 and 1992
Subordinated Indentures). Fractional shares of Common Stock will not be issued
upon conversion, but, in lieu thereof, the Corporation will pay a cash
adjustment (Section 1406 of the Senior Indenture and Section 1506 of the 1986
and 1992 Subordinated Indentures). Convertible Debt Securities convertible into
Common Stock surrendered for conversion between the record date for an interest
payment, if any, and the interest payment date (except such Convertible Debt
Securities called for redemption on a redemption date during such period) must
be accompanied by payment of an amount equal to the interest thereon which the
registered holder is entitled to receive (Section 1404 of the Senior Indenture
and Section 1504 of the 1986 and 1992 Subordinated Indentures).
The adjustment provisions for Debt Securities convertible into shares of
Preferred Stock will be determined at the time of an issuance of such Debt
Securities and will be set forth in the applicable Prospectus Supplement related
thereto.
Except as set forth in the applicable Prospectus Supplement, any
Convertible Debt Securities called for redemption, unless surrendered for
conversion on or before the close of business on the redemption date, are
subject to being purchased from the holder of such Convertible Debt Securities
by one or
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more investment bankers or other purchasers who may agree with the Corporation
to purchase such Convertible Debt Securities and convert them into Common Stock
or Preferred Stock, as the case may be (Section 1108 of the Indentures).
DESCRIPTION OF DEBT WARRANTS
The following description of the terms of the Debt Warrants sets forth
certain general terms and provisions of the Debt Warrants to which any
Prospectus Supplement may relate. The particular terms of the Debt Warrants
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions do not apply to the Debt Warrants so offered will be
described in the Prospectus Supplement relating to such Debt Warrants.
The Debt Warrants are to be issued under one or more Debt Warrant
Agreements to be entered into between the Corporation and a bank or trust
company, as Debt Warrant Agent, all as set forth in the Prospectus Supplement
relating to the particular issue of Debt Warrants. Debt Warrants may be issued
independently or together with other securities offered by any Prospectus
Supplement and may be attached to or separate from such other securities. Copies
of the form of Debt Warrant Agreement, including the form of Debt Warrant
Certificate representing the Debt Warrant, are filed as exhibits to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the form of Debt Warrant Agreement and Debt
Warrant Certificate do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the Debt
Warrant Agreement and the Debt Warrant Certificates, respectively, including the
definitions therein of certain terms.
GENERAL
If Debt Warrants are offered, the applicable Prospectus Supplement will
describe the terms of the Debt Warrants to be offered, including, where
applicable, the following: (1) the offering price; (2) the currency in which
Debt Warrants may be purchased; (3) the designation, aggregate principal amount,
currency and terms of the Debt Securities purchasable upon exercise of such Debt
Warrants; (4) the designation and terms of the Debt Securities with which such
Debt Warrants are issued and the number of Debt Warrants issued with each such
Debt Security; (5) the date on and after which such Debt Warrants and the
related Debt Securities will be separately transferable; (6) the principal
amount of Debt Securities purchasable upon exercise of such Debt Warrants and
the price at and currency in which such principal amount of Debt Securities may
be purchased upon such exercise; (7) the date on which the right to exercise
Debt Warrants shall commence and the date on which such right shall expire (the
"Expiration Date"); (8) whether the Debt Warrants represented by the Debt
Warrant Certificates will be issued in registered or bearer form; (9)
information with respect to book-entry procedures, if any; and (10) any other
terms of the Debt Warrants (which shall not be inconsistent with the provisions
of the Debt Warrant Agreements).
Debt Warrant Certificates may be exchanged for new Debt Warrant
Certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Debt Warrant Agent or any other office indicated in the
applicable Prospectus Supplement. Prior to the exercise of their Debt Warrants,
holders of Debt Warrants will not have any of the rights of Holders of the Debt
Securities purchasable upon such exercise, including the right to receive
payments of principal of, premium, if any, or interest, if any, on the Debt
Securities purchasable upon such exercise or to enforce covenants in the
Indenture.
Prospective purchasers of Debt Warrants should be aware that special U.S.
federal income tax, accounting and other considerations may be applicable to
instruments such as Debt Warrants. The Prospectus Supplement relating to any
issue of Debt Warrants will describe such considerations.
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities at such exercise price as shall in each case
be set forth in, or calculable from, the Prospectus
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Supplement relating to such Debt Warrants. Debt Warrants may be exercised at any
time prior to 5:00 p.m. New York time on the Expiration Date set forth in the
Prospectus Supplement relating thereto. After the close of business on the
Expiration Date (or such later date to which such Expiration Date may be
extended by the Corporation), unexercised Debt Warrants will become void.
Debt Warrants may be exercised by delivery to the Debt Warrant Agent of
payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities purchasable upon such exercise together
with certain information set forth on the reverse side of the Debt Warrant
Certificate. Debt Warrants will be deemed to have been exercised upon receipt of
the exercise price, subject to the receipt, within five business days, of the
Debt Warrant Certificate evidencing such Debt Warrants. Upon receipt of such
payment and the Debt Warrant Certificate properly completed and duly executed at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the applicable Prospectus Supplement, the Corporation will, as soon
as practicable, issue and deliver pursuant to the Indenture the Debt Securities
purchasable upon such exercise. If fewer than all of the Debt Warrants
represented by such Debt Warrant Certificate are exercised, a new Debt Warrant
Certificate will be issued for the remaining amount of Debt Warrants.
MODIFICATIONS
The Debt Warrant Agreement and the terms of the Debt Warrants may be
amended by the Corporation and the Debt Warrant Agent, without the consent of
the holder thereof, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained therein, or in any
other manner which the Corporation and the Debt Warrant Agent may deem necessary
or desirable and which will not adversely affect the interests of the owners.
ENFORCEABILITY OF RIGHTS BY HOLDERS
The Debt Warrant Agent will act solely as an agent of the Corporation in
connection with the issuance and exercise of Debt Warrants. The Debt Warrant
Agent shall have no duty or responsibility in case of any default by the
Corporation in the performance of its obligations under the Debt Warrant
Agreement or Debt Warrant Certificate. Each holder may, without the consent of
the Debt Warrant Agent, enforce by appropriate legal action, on his own behalf,
his right to exercise his Debt Warrants.
DESCRIPTION OF CURRENCY WARRANTS
The following description of the terms of the Currency Warrants sets forth
certain general terms and provisions of the Currency Warrants to which any
Prospectus Supplement may relate. The particular terms of the Currency Warrants
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions do not apply to the Currency Warrants so offered will be
described in the Prospectus Supplement relating to such Currency Warrants.
The Currency Warrants are to be issued under one or more Currency Warrant
Agreements to be entered into between the Corporation and a bank or trust
company, as Currency Warrant Agent, all as set forth in the Prospectus
Supplement relating to the particular issue of Currency Warrants. Currency
Warrants may be issued independently or together with other Securities offered
by any Prospectus Supplement and may be attached to or separate from such other
Securities. Copies of the form of Currency Warrant Agreement, including the form
of Currency Warrant Certificates representing the Currency Warrants, are filed
as exhibits to the Registration Statement of which this Prospectus is a part.
The following summaries of certain provisions of the form of Currency Warrant
Agreement and Currency Warrant Certificate do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the Currency Warrant Agreement and the Currency Warrant
Certificates, respectively, including the definitions therein of certain terms.
GENERAL
The Corporation may issue Currency Warrants either in the form of Currency
Put Warrants entitling the holders thereof to receive from the Corporation the
Currency Warrant Cash Settlement Value (as defined below) in U.S. dollars of the
right to sell a specified amount of a specified foreign
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currency or composite currency (the "Designated Currency") for a specified
amount of U.S. dollars, or Currency Call Warrants entitling the Owners thereof
to receive from the Corporation the Currency Warrant Cash Settlement Value in
U.S. dollars of the right to purchase a specified amount of Designated Currency
for a specified amount of U.S. dollars. Unless otherwise indicated in the
Prospectus Supplement, a Currency Warrant will be settled only in cash, in U.S.
dollars and, accordingly, will not require or entitle an Owner thereof to sell,
deliver, purchase or take delivery of any currency or currency unit, including
any foreign or composite currency.
Unless otherwise provided in the applicable Prospectus Supplement, the
Currency Warrant Cash Settlement Value of an exercised Currency Warrant will be
an amount stated in U.S. dollars which, in the case of a Currency Put Warrant,
is the greater of (i) zero and (ii) the amount computed by subtracting from a
nominal amount of U.S. dollars specified in the Prospectus Supplement (the "U.S.
Dollar Constant") an amount equal to the U.S. Dollar Constant times a fraction,
the numerator of which is the strike price set forth in the applicable
Prospectus Supplement and the denominator of which is the spot exchange rate on
the exercise date and, in the case of a Currency Call Warrant, will be the
greater of (i) zero and (ii) the amount computed by subtracting the U.S. Dollar
Constant from an amount equal to the U.S. Dollar Constant times a fraction, the
numerator of which is the strike price set forth in the applicable Prospectus
Supplement and the denominator of which is the spot exchange rate on the
exercise date. If the Currency Warrants are to be offered either in the form of
Currency Put Warrants or Currency Call Warrants, an Owner will receive a cash
payment upon exercise only if the Currency Warrants have a Currency Warrant Cash
Settlement Value in excess of zero at that time.
If Currency Warrants are offered, the applicable Prospectus Supplement will
describe the terms of the Currency Warrants offered thereby, including, where
applicable, the following: (1) whether such Currency Warrants will be Currency
Put Warrants, Currency Call Warrants, or both; (2) the aggregate amount of such
Currency Warrants; (3) the offering price; (4) the Designated Currency, which
may be a foreign currency or a composite currency (including ECUs), and
information regarding such currency or composite currency; (5) the date on which
the right to exercise such Currency Warrants shall commence and the date such
right shall expire (the "Currency Warrant Expiration Date"); (6) the procedures
and conditions relating to exercise; (7) the circumstances, if any, which will
cause the Currency Warrants to be deemed to be automatically exercised; (8) the
minimum number of Currency Warrants to be exercised at any one time other than
upon automatic exercise and any other restrictions on exercise; (9) the method
of determining the Currency Warrant Cash Settlement Value, including the strike
price or range of strike prices and the U.S. Dollar Constant; (10) the national
securities exchange on which the Currency Warrants will be listed; (11) whether
the Currency Warrants will be issued in certificated or book-entry form; (12)
the place or places at which payment of the Currency Warrant Cash Settlement
Value is to be made by the Corporation; (13) information with respect to
book-entry procedures, if any; (14) the plan of distribution of such Currency
Warrants; (15) the identity of the Currency Warrant Agent; and (16) any other
terms of such Currency Warrants (which shall not be inconsistent with the
provisions of the Currency Warrant Agreement).
Prospective purchasers of Currency Warrants should be aware that special
U.S. federal income tax, accounting and other considerations may be applicable
to instruments such as Currency Warrants. The Prospectus Supplement relating to
any issue of Currency Warrants will describe such considerations.
BOOK-ENTRY PROCEDURES
Except as may otherwise be provided in the Prospectus Supplement, each
issue of Currency Warrants will be issued in book-entry form and represented by
a single global Currency Warrant Certificate ("Global Currency Warrant"). Each
Global Currency Warrant will be deposited with, or on behalf of, a bank, trust
company or other financial institution as depositary (the "Currency Warrant
Depository"), and registered in the name of the Currency Warrant Depository or a
nominee thereof. The Currency Warrant Depository or its nominee will be
considered the owner or holder of the Currency Warrants for all purposes under
the Currency Warrant Agreement. Owners will not generally be entitled to receive
definitive certificates representing Currency Warrants. An Owner's beneficial
interest in a Currency Warrant will be recorded on or through the records of the
brokerage firm or other
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entity that maintains such Owner's account. In turn, the total amount of
beneficial interest in Currency Warrants represented by an individual, financial
institution or other participant for its clients will be maintained on the
records of the Currency Warrant Depository in the name of such brokerage firm or
its agent. Therefore, Owners of beneficial interests in Currency Warrants must
rely upon the record of such brokerage firm or other entity or such participant
to evidence their interest in a Currency Warrant. Transfer of ownership of any
Currency Warrant will be effected only through the selling Owner's brokerage
firm. Neither the Corporation nor the Currency Warrant Agent will have any
responsibility or liability for any aspect of the records relating to beneficial
ownership interests of global Currency Warrant Certificates, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Currency Warrant Cash Settlement Value on exercise of a Currency
Warrant will be paid by the Currency Warrant Agent to the Currency Warrant
Depository. The Currency Warrant Depository will be responsible for crediting
the amount of such payments to the accounts of participants or indirect
participants in accordance with its standard procedures. Each participant or
indirect participant will be responsible for disbursing such payments to the
beneficial Owners of the Currency Warrants that it represents and to each
brokerage firm for which it acts as agent. Each such brokerage firm will be
responsible for disbursing funds to the Owners of the beneficial interest in the
Currency Warrants that it represents.
If the Currency Warrant Depository is at any time unwilling or unable to
continue as Currency Warrant Depository and a successor Currency Warrant
Depository is not appointed by the Corporation within 90 days, the Corporation
will issue Currency Warrants in definitive form in exchange for the Global
Currency Warrant. In addition, the Corporation may at any time determine not to
have the Currency Warrants represented by a Global Currency Warrant and, in such
event, will issue Currency Warrants in definitive form in exchange for the
Global Currency Warrant. In either instance, an Owner of a beneficial interest
in the Global Currency Warrant will be entitled to have a number of Currency
Warrants equivalent to such beneficial interest registered in its name and will
be entitled to physical delivery of such Currency Warrants in definitive form.
EXERCISE OF CURRENCY WARRANTS
Except as may otherwise be provided in the Prospectus Supplement relating
thereto, each Currency Warrant will entitle the Owner thereof to the Currency
Warrant Cash Settlement Value of such Currency Warrant on the applicable
Exercise Date, in each case as such terms will be defined in the applicable
Prospectus Supplement. If not exercised prior to 3:00 p.m., New York City time,
on the fifth New York Business Day preceding the Currency Warrant Expiration
Date, "in-the-money" Currency Warrants (i.e., those for which the Currency
Warrant Cash Settlement Value exceeds zero) will be deemed automatically
exercised as of the Currency Warrant Expiration Date. Currency Warrants will
also be deemed automatically exercised if they are delisted even if such
Warrants are "out-of-the-money" at such time in which case no payment will be
required to be made to or by the beneficial Owner thereof. Procedures for
exercise of the Currency Warrants will be set out in the applicable Prospectus
Supplement.
LISTING
Unless otherwise provided in the Prospectus Supplement, each issue of
Currency Warrants will be listed on a national securities exchange, subject only
to official notice of issuance, as a condition of sale of any such Currency
Warrants. In this regard, it should be noted that if the Corporation issues
Currency Warrants on a foreign currency that does not currently underlie a
standardized option traded on a national securities exchange, before such
Currency Warrants could be traded on a national securities exchange, such
exchange would have to receive approval of the Commission. There can be no
assurance that such approval will be granted. In the event that the Currency
Warrants are delisted from, or permanently suspended from trading on such
exchange, and, at or prior to such delisting or suspension, the Currency
Warrants shall not have been listed on another national securities exchange,
Currency Warrants not previously exercised will be deemed automatically
exercised on the date such
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delisting or permanent suspension becomes effective. The Corporation will notify
Owners of Currency Warrants as soon as practicable of such delisting or
permanent trading suspension. The applicable Currency Warrant Agreement will
contain a covenant of the Corporation not to seek delisting of the Currency
Warrants, or suspension of their trading, on such exchange unless the Currency
Warrants have been, at the time, approved for listing on another national
securities exchange.
MODIFICATIONS
The Currency Warrant Agreement and the terms of the Currency Warrants may
be amended by the Corporation and the Currency Warrant Agent, without the
consent of the Owners or the registered holder thereof, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained therein, or in any other manner which the
Corporation may deem necessary or desirable and which will not materially and
adversely affect the interests of the Owners.
The Corporation and the Currency Warrant Agent also may modify or amend the
Currency Warrant Agreement and the terms of the Currency Warrants, with the
consent of the Owners of not less than a majority in number of the then
outstanding unexercised Currency Warrants affected, provided that no such
modification or amendment that increases the Strike Price in the case of a
Currency Call Warrant, decreases the Strike Price in the case of a Currency Put
Warrant, shortens the period of time during which the Currency Warrants may be
exercised or otherwise materially and adversely affects the exercise rights of
the Owners of the Currency Warrants or reduces the number of outstanding
Currency Warrants the consent of whose Owners is required for modification or
amendment of the Currency Warrant Agreement or the terms of the Currency
Warrants may be made without the consent of the Owners affected thereby.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Corporation, then the successor or assuming corporation shall succeed to and be
substituted for the Corporation in, and the Corporation will be relieved of any
further obligation under, the Currency Warrant Agreement or the Currency
Warrants.
ENFORCEABILITY OF RIGHTS BY OWNERS
The Currency Warrant Agent will act solely as an agent of the Corporation
in connection with the issuance and exercise of Currency Warrants. The Currency
Warrant Agent shall have no duty or responsibility in case of any default by the
Corporation in the performance of its obligations under the Currency Warrant
Agreement or Currency Warrant Certificate. Each Owner may, without the consent
of the Currency Warrant Agent, enforce by appropriate legal action, on his own
behalf, his right to exercise, and to receive payment for, his Currency
Warrants.
RISK FACTORS
The Currency Warrants involve a high degree of risk, including foreign
exchange risks and the risk of expiring worthless. Purchasers should be prepared
to sustain a loss of some or all of the purchase price of their Currency
Warrants. Prospective purchasers of Currency Warrants should be experienced with
respect to foreign exchange transactions, options and option transactions and
should reach an investment decision only after careful consideration with their
advisors of the suitability of Currency Warrants in light of their particular
financial circumstances, the information set forth herein and the risk factors
and information regarding the Currency Warrants and the Designated Currency set
forth in the Prospectus Supplement relating to such Currency Warrants.
DESCRIPTION OF STOCK-INDEX WARRANTS
The following description of the terms of the Stock-Index Warrants sets
forth certain general terms and provisions of the Stock-Index Warrants to which
any Prospectus Supplement may relate. The particular terms of the Stock-Index
Warrants offered by any Prospectus Supplement and the extent, if
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any, to which such general provisions do not apply to the Stock-Index Warrants
so offered will be described in the Prospectus Supplement relating to such
Stock-Index Warrants.
The Stock-Index Warrants are to be issued under one or more Stock-Index
Warrant Agreements to be entered into between the Corporation and a bank or
trust company, as Stock-Index Warrant Agent, all as will be set forth in the
Prospectus Supplement relating to the particular issue of Stock-Index Warrants.
Stock-Index Warrants may be issued independently or together with other
Securities offered by any Prospectus Supplement and may be attached to or
separate from such other Securities. Copies of the form of Stock-Index Warrant
Agreement, including the form of Stock-Index Warrant Certificates representing
the Stock-Index Warrants, are filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following summaries of certain provisions
of the form of Stock-Index Warrant Agreement and Stock-Index Warrant Certificate
do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Stock-Index Warrant
Agreement and the Stock-Index Warrant Certificates, respectively, including the
definitions therein of certain terms.
GENERAL
The Corporation may issue Stock-Index Warrants either in the form of
Stock-Index Put Warrants, entitling the owners thereof to receive from the
Corporation the Stock-Index Cash Settlement Value (as described in the
applicable Prospectus Supplement) in U.S. dollars, which amount will be
determined by reference to the amount, if any, by which the Stock-Index Exercise
Price exceeds the closing value of the Index on the Valuation Date (the "Index
Value") at the time of exercise, or in the form of Stock-Index Call Warrants,
entitling the Owners thereof to receive from the Corporation the Stock-Index
Cash Settlement Value in U.S. dollars, which amount will be determined by
reference to the amount, if any, by which the Index Value at the time of
exercise exceeds the Stock-Index Exercise Price.
The Prospectus Supplement for an issue of Stock-Index Warrants will set
forth the formula pursuant to which the Stock-Index Cash Settlement Value will
be determined. In addition, if so specified in the applicable Prospectus
Supplement, following the occurrence of a Market Disruption Event (as defined
therein), the Stock-Index Cash Settlement Value may be determined on a different
basis than under normal exercise of a Stock-Index Warrant.
Unless otherwise indicated in the Prospectus Supplement, a Stock-Index
Warrant will be settled only in cash and, accordingly, will not require or
entitle an Owner thereof to sell, deliver, purchase or take delivery of any
shares of any underlying stock or any other securities. The Owners will not be
entitled to any of the rights of the holders of any underlying stock.
If Stock-Index Warrants are offered, the Prospectus Supplement will
describe the terms of Stock-Index Warrants offered thereby, including the
following: (1) whether such Stock-Index Warrants are Stock-Index Put Warrants,
Stock-Index Call Warrants or both; (2) the aggregate amount of such Stock-Index
Warrants; (3) the offering price; (4) the Stock Index for such Stock-Index
Warrants, which may be based on one or more U.S. or foreign stocks or a
combination thereof and may be a preexisting U.S. or foreign stock index
compiled and published by a third party or an index based on one or more
underlying stock or stocks selected by the Corporation solely in connection with
the issuance of such Stock-Index Warrants, and certain information regarding
such Stock Index and the underlying stock or stocks; (5) the date on which the
right to exercise such Stock-Index Warrants commences and the date on which such
right expires (the "Stock-Index Warrant Expiration Date"); (6) the procedures
and conditions relating to exercise; (7) the circumstances which will cause the
Stock-Index Warrants to be deemed to be automatically exercised, if any; (8) the
minimum number, if any, of Stock-Index Warrants to be exercised at any one time
other than upon automatic exercise and any other restrictions on exercise; (9)
the maximum number, if any, of such Stock-Index Warrants that may, subject to
the Corporation's election, be exercised by all Owners (or by any person or
entity) on any day; (10) the method of providing for a substitute index or
otherwise determining the amount payable in connection with the exercise of such
Stock-Index Warrants if the Stock Index changes or ceases to be made available
by its publisher, which determination will be made by an independent expert;
(11) the
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national securities exchange on which the Stock-Index Warrants will be listed,
if any; (12) whether the Stock-Index Warrants will be issued in certificated or
book-entry form; (13) the place or places at which payment of the Stock-Index
Warrant Cash Settlement Value is to be made by the Corporation; (14) information
with respect to book-entry procedures, if any; (15) the plan of distribution of
such Stock-Index Warrants; (16) the identity of the Stock-Index Warrant Agent;
(17) any provisions permitting an Owner of a Stock-Index Warrant to condition a
Stock-Index Exercise Notice on the absence of certain specified changes in the
Index Value after the Stock-Index Warrant Exercise Date; and (18) any other
terms of such Stock-Index Warrants (which shall not be inconsistent with the
provisions of the Stock-Index Warrant Agreement).
Prospective purchasers of Stock-Index Warrants should be aware that special
U.S. federal income tax, accounting and other considerations may be applicable
to instruments such as Stock-Index Warrants. The Prospectus Supplement relating
to any issue of Stock-Index Warrants will describe such considerations.
BOOK-ENTRY PROCEDURES
Except as may otherwise be provided in the Prospectus Supplement relating
thereto, each issue of Stock-Index Warrants will be issued in book-entry form
and represented by a single global Stock-Index Warrant, registered in the name
of a bank, trust company or other financial institution as depositary (the
"Stock-Index Warrant Depository"). The Stock-Index Warrant Depository or its
nominee will be considered the owner or holder of the Stock-Index Warrants for
all purposes under the Stock-Index Warrant Agreement. Owners of beneficial
interests in the Global Stock-Index Warrant will generally not be entitled to
receive physical delivery of definitive certificates representing Stock-Index
Warrants. An Owner's beneficial interest in a Stock-Index Warrant will be
recorded on or through the records of the brokerage firm or other entity that
maintains such Owner's account. In turn, the total number of Stock-Index
Warrants held by an individual brokerage firm for its clients will be maintained
on the records of the Stock-Index Warrant Depository in the name of such
brokerage firm or its agent. Therefore, Owners of Stock-Index Warrants must rely
upon the record of such brokerage firm or other entity or such participant to
evidence such Owners' ownership of a Stock-Index Warrant. Transfer of beneficial
interests in a Global Stock-Index Warrant maintained by the Stock-Index Warrant
Depository will be effected only through records maintained by such depository
or its nominee for such Global Stock-Index Warrant (with respect to interests of
participants) or by participants or persons that hold through participants (with
respect to persons other than participants). Neither the Corporation nor the
Stock-Index Warrant Agent will have any responsibility or liability for any
aspect of the records relating to or payment made on account of beneficial
ownership interests in the Global Stock-Index Warrant, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Stock-Index Cash Settlement Value will be paid by the Stock-Index
Warrant Agent to the Stock-Index Warrant Depository. The Stock-Index Warrant
Depository will be responsible for crediting the amount of such payments to the
accounts of participants or indirect participants in accordance with its
standard procedures. Each participant or indirect participant will be
responsible for disbursing such payments to the beneficial Owners of the
Stock-Index Warrants that it represents and to each brokerage firm for which it
acts as agent. Each such brokerage firm will be responsible for disbursing funds
to the owners of the Stock-Index Warrants that it represents.
If the Stock-Index Warrant Depository is at any time unwilling or unable to
continue as Stock-Index Warrant Depository and a successor Depository is not
appointed by the Corporation within 90 days, the Corporation will issue
Stock-Index Warrants in definitive form in exchange for the Global Stock-Index
Warrant. In addition, the Corporation may at any time determine not to have the
Stock-Index Warrants represented by a Global Stock-Index Warrant and, in such
event, will issue Stock-Index Warrants in definitive form in exchange for the
Global Stock-Index Warrant. In either instance, an Owner of a beneficial
interest in the Global Stock-Index Warrant will be entitled to have a number of
Stock-Index Warrants equivalent to such beneficial interest registered in its
name and will be entitled to physical delivery of such Stock-Index Warrants in
definitive form.
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EXERCISE OF STOCK-INDEX WARRANTS
Except as may otherwise be provided in the Prospectus Supplement relating
thereto, each Stock-Index Warrant will entitle the Owner thereof to the
Stock-Index Cash Settlement Value of such Stock-Index Warrant on the applicable
Valuation Date, in each case as such terms will further be defined in the
Prospectus Supplement relating thereto. Unless otherwise provided in the
Prospectus Supplement, if not exercised prior to 3:00 p.m., New York City time,
on the Stock-Index Warrant Expiration Date, Stock-Index Warrants will be deemed
automatically exercised as of the Stock-Index Warrant Expiration Date even if
they are then "out-of-the-money" at such time, in which case no payment will be
required to be made to or by the Owner thereof. Procedures for exercise of the
Stock-Index Warrants will be set out in the applicable Prospectus Supplement.
LISTING
Unless otherwise provided in the Prospectus Supplement, each issue of
Stock-Index Warrants will be listed on a national securities exchange, as
specified in the Prospectus Supplement, subject only to official notice of
issuance, as a condition to the sale of any such Stock-Index Warrants. In the
event that the Stock-Index Warrants are delisted from, or permanently suspended
from trading on, such exchange, and, at or prior to such delisting or
suspension, the Stock-Index Warrants shall not have been listed on another
national securities exchange, Stock-Index Warrants not previously exercised will
be deemed automatically exercised on the date such delisting or permanent
trading suspension becomes effective. The Stock-Index Cash Settlement Value to
be paid in such event will be as set forth in the applicable Prospectus
Supplement. The Corporation will notify holders of Stock-Index Warrants as soon
as practicable of such delisting or permanent trading suspension. The applicable
Stock-Index Warrant Agreement will contain a covenant of the Corporation not to
seek delisting of the Stock-Index Warrants from, or permanent suspension of
their trading on, such exchange, unless such Stock-Index Warrants have been, at
the time, approved for listing on another national securities exchange.
MODIFICATIONS
The Stock-Index Warrant Agreement and the terms of the Stock-Index Warrants
may be amended by the Corporation and the Stock-Index Warrant Agent, without the
consent of the Owners or the registered holder, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained therein, or in any other manner which the
Corporation may deem necessary or desirable and which will not materially and
adversely affect the interests of the Owners.
The Corporation and the Stock-Index Warrant Agent also may modify or amend
the Stock-Index Warrant Agreement and the terms of the Stock-Index Warrant, with
the consent of the beneficial Owners of not less than a majority in number of
the then outstanding unexercised Stock-Index Warrants affected, provided that no
such modification or amendment that increases the Exercise Price in the case of
a Stock-Index Call Warrant, decreases the Exercise Price in the case of a
Stock-Index Put Warrant, shortens the period of time during which the
Stock-Index Warrants may be exercised or otherwise materially and adversely
affects the exercise rights of the Owners of the Stock-Index Warrants or reduces
the number of outstanding Stock-Index Warrants the consent of whose Owners is
required for modification or amendment of the Stock-Index Warrant Agreement or
the terms of the Stock-Index Warrants may be made without the consent of the
Owners affected thereby.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Corporation, then the successor or assuming corporation shall succeed to and be
substituted for the Corporation in, and the Corporation will be relieved of any
further obligation under, the Stock-Index Warrant Agreement or the Stock-Index
Warrants.
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ENFORCEABILITY OF RIGHTS BY OWNERS
The Stock-Index Warrant Agent will act solely as an agent of the
Corporation in connection with the issuance and exercise of Stock-Index
Warrants. The Stock-Index Warrant Agent shall have no duty or responsibility in
case of any default by the Corporation in the performance of its obligations
under the Stock-Index Warrant Agreement or Stock-Index Warrant Certificate. Each
Owner may, without the consent of the Stock-Index Warrant Agent, enforce by
appropriate legal action, on his own behalf, his right to exercise, and to
receive payment for, his Stock-Index Warrants.
RISK FACTORS RELATING TO THE STOCK-INDEX WARRANTS
The Stock-Index Warrants may entail risks primarily related to fluctuations
in the applicable Stock Index and possible illiquidity in the secondary market.
These risks will vary depending on the particular terms of the Stock-Index
Warrants and will be more fully described in the applicable Prospectus
Supplement.
DESCRIPTION OF OTHER WARRANTS
The Other Warrants may be issued, if permitted under applicable law, to buy
or sell debt securities of or guaranteed by the United States, to buy or sell a
commodity or a unit of a commodity index or to buy or sell some other item or
unit of an index other than indexes covered by Stock-Index Warrants
(collectively, "Exercise Items"). Owners of Other Warrants will be entitled to
receive from the Corporation the cash settlement value in U.S. dollars of the
right to buy or sell the Exercise Items (the "Other Warrant Cash Settlement
Value"). An Owner of Other Warrants will receive a cash payment upon exercise
only if the Other Warrants have an Other Warrant Cash Settlement Value in excess
of zero at that time.
The Other Warrants are to be issued under one or more Other Warrant
Agreements to be entered into between the Corporation and a bank or trust
company, as Other Warrant Agent, all as set forth in the Prospectus Supplement
relating to the particular issue of Other Warrants. Other Warrants may be issued
independently or together with other Securities offered by any Prospectus
Supplement and may be attached to or separate from such other Securities. Copies
of the form of Other Warrant Agreement, including the forms of Warrant
Certificates representing the Other Warrants, are filed as exhibits to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the form of Other Warrant Agreement and Other
Warrant Certificate do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the Other
Warrant Agreement and the Other Warrant Certificates, respectively, including
the definitions therein of certain terms.
GENERAL
Unless otherwise indicated in the Prospectus Supplement, an Other Warrant
will be settled only in cash, in U.S. dollars, and accordingly, will not require
or entitle an owner thereof to sell, deliver, purchase or take delivery of any
Exercise Items.
If Other Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Other Warrants, including, where applicable, the
following: (1) the title and aggregate number of such Other Warrants; (2) the
offering price; (3) the material risk factors relating to such Other Warrants;
(4) the Exercise Items that such Other Warrants represent the right to buy or
sell; (5) the procedures and conditions relating to exercise; (6) the date on
which the right to exercise the Other Warrants shall commence and the date such
right shall expire (the "Other Warrant Expiration Date"); (7) the method of
determining the Other Warrant Cash Settlement Value; (8) whether such Other
Warrants will be issued in certificated or book-entry form; (9) whether such
Other Warrants will be listed on a national securities exchange; (10)
information with respect to book-entry procedures, if any; (11) the identity of
the Other Warrant Agent; and (12) any other terms of such Other Warrants (which
shall not be inconsistent with the provisions of the Other Warrant Agreement).
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Prospective purchasers of Other Warrants should be aware that special U.S.
federal income tax, accounting and other considerations may be applicable to
instruments such as Other Warrants. The Prospectus Supplement relating to any
issue of Other Warrants will describe such considerations.
BOOK-ENTRY PROCEDURES
Except as may otherwise be provided in the Prospectus Supplement, each
issue of Other Warrants will be issued in book-entry form and represented by a
single global Other Warrant Certificate ("Global Other Warrant"). Each Global
Other Warrant will be deposited with, or on behalf of, a depositary (the "Other
Warrant Depository"), and registered in the name of the Other Warrant Depository
or a nominee thereof. The Other Warrant Depository or its nominee will be
considered the owner or holder of the Other Warrants for all purposes under the
Other Warrant Agreement. Owners will not generally be entitled to receive
definitive certificates representing Other Warrants. An owner's beneficial
ownership interest in an Other Warrant will be recorded on or through the
records of the brokerage firm or other entity that maintains such Owner's
account. In turn, the total amount of beneficial interest in Other Warrants
represented by an individual brokerage firm for its clients will be maintained
on the records of the Other Warrant Depository in the name of such brokerage
firm or its agent. Therefore, Owners of Other Warrants must rely upon the record
of such brokerage firm or other entity or such participant to evidence such
Owners' ownership of an Other Warrant. Transfer of ownership of any Other
Warrant will be effected only through the selling Owner's brokerage firm.
Neither the Corporation nor the Other Warrant Agent will have any responsibility
or liability for any aspect of the records relating to beneficial ownership
interests in the Global Other Warrant, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Other Warrant Cash Settlement Value on exercise of an Other Warrant
will be paid by the Other Warrant Agent to the Other Warrant Depository. The
Other Warrant Depository will be responsible for crediting the amount of such
payments to the accounts of participants or indirect participants in accordance
with its standard procedures. Each participant or indirect participant will be
responsible for disbursing such payments to the beneficial Owners of the Other
Warrants that it represents and to each brokerage firm for which it acts as
agent. Each such brokerage firm will be responsible for disbursing funds to the
Owners of the Other Warrants that it represents.
If the Other Warrant Depository is at any time unwilling or unable to
continue as Other Warrant Depository and a successor depository is not appointed
by the Corporation within 90 days, the Corporation will issue Other Warrants in
definitive form in exchange for the Global Other Warrant. In addition, the
Corporation may at any time determine not to have the Other Warrants represented
by a Global Other Warrant and, in such event, will issue Other Warrants in
definitive form in exchange for the Global Other Warrant. In either instance, an
Owner of a beneficial interest in the Global Other Warrant will be entitled to
have a number of Other Warrants equivalent to such beneficial interest
registered in its name and will be entitled to physical delivery of such Other
Warrants in definitive form.
EXERCISE OF OTHER WARRANTS
Except as may otherwise be provided in the Prospectus Supplement relating
thereto, each Other Warrant will entitle the owner thereof to the Other Warrant
Cash Settlement Value of such Other Warrant on the applicable Valuation Date, in
each case as such terms will further be defined in the Prospectus Supplement
relating thereto. Unless otherwise provided in the Prospectus Supplement, if not
exercised prior to 3:00 p.m., New York City time, on the Other Warrant
Expiration Date, Other Warrants will be deemed automatically exercised as of the
Other Warrant Expiration Date even if they are then "out-of-the-money" at such
time, in which case no payment will be required to be made to or by the Owner
thereof.
LISTING
Unless otherwise provided in the relevant Prospectus Supplement, each issue
of Other Warrants will be listed on a national securities exchange, subject only
to official notice of issuance, as a condition
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of sale of any such Other Warrants. In this regard, it should be noted that if
the Corporation issues Other Warrants on an Exercise Item that does not
currently underlie a standardized option traded on a national securities
exchange, before such Other Warrants could be traded on a national securities
exchange, such exchange would have to receive approval of the Commission. There
can be no assurance that such approval will be granted. In the event that the
Other Warrants are delisted from, or permanently suspended from trading on, such
exchange, and, at or prior to such delisting or suspension, the Other Warrants
shall not have been listed on another national securities exchange, Other
Warrants not previously exercised will be deemed automatically exercised on the
date such delisting or permanent suspension becomes effective. The Corporation
will notify Owners of Other Warrants as soon as practicable of such delisting or
permanent trading suspension. The applicable Other Warrant Agreement will
contain a covenant of the Corporation not to seek delisting of the Other
Warrants, if listed, or suspension of their trading, on such exchange unless the
Other Warrants have been, at the time, approved for listing on another national
securities exchange.
MODIFICATIONS
The Other Warrant Agreement and the terms of the Other Warrants may be
amended by the Corporation and the Other Warrant Agent, without the consent of
the Owners or the registered holder, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective or inconsistent provision
contained therein, or in any other manner which the Corporation may deem
necessary or desirable and which will not materially and adversely affect the
interests of the Owners.
The Corporation and the Other Warrant Agent also may modify or amend the
Other Warrant Agreement and the terms of the Other Warrants, with the consent of
the beneficial Owners of not less than a majority in number of the then
outstanding unexercised Other Warrants affected, provided that no such
modification or amendment that shortens the period of time during which the
Other Warrants may be exercised or otherwise materially and adversely affects
the exercise rights of the Owners of the Other Warrants or reduces the number of
outstanding Other Warrants the consent of whose Owners is required for
modification or amendment of the Other Warrant Agreement or the terms of the
Other Warrants may be made without the consent of the Owners affected thereby.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Corporation, then the successor or assuming corporation shall succeed to and be
substituted for the Corporation in, and the Corporation will be relieved of any
further obligation under, the Other Warrant Agreement or the Other Warrants.
ENFORCEABILITY OF RIGHTS BY OWNERS
The Other Warrant Agent will act solely as an agent of the Corporation in
connection with the issuance and exercise of Other Warrants. The Other Warrant
Agent shall have no duty or responsibility in case of any default by the
Corporation in the performance of its obligations under the Other Warrant
Agreement or Other Warrant Certificate. Each Owner may, without the consent of
the Other Warrant Agent, enforce by appropriate legal action, on his own behalf,
his right to exercise, and to receive payment for, their Other Warrants.
RISK FACTORS
The Other Warrants may entail significant risks, including, without
limitation, the possibility of significant fluctuation in the market for the
applicable Exercise Item, the potential illiquidity in the secondary market and
the risk that they will expire worthless. These risks will vary depending on the
particular terms of the Other Warrants and will be more fully described in the
applicable Prospectus Supplement.
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DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the shares of Preferred Stock
that may be offered by the Corporation sets forth certain general terms and
provisions of the Preferred Stock to which any Prospectus Supplement may relate.
Certain other terms of any series of Preferred Stock and the terms of any
related option, put or right of the Corporation to require the holder of any
other Security offered to also acquire shares of Preferred Stock, will be
specified in the applicable Prospectus Supplement. If so specified in the
applicable Prospectus Supplement, the terms of any series of Preferred Stock may
differ from the terms set forth below. The description of the terms 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 Articles Supplementary relating to the applicable series of
Preferred Stock, which Articles will be filed as an exhibit to or incorporated
by reference in the Registration Statement of which this Prospectus forms a
part.
GENERAL
Pursuant to the Corporation's Articles of Incorporation and the Maryland
General Corporation Law, the Board of Directors of the Corporation has the
authority without further stockholder action, to issue from time to time up to a
maximum of 20,000,000 shares of preferred stock without par value, in one or
more series and for such consideration as may be fixed from time to time by the
Board of Directors of the Corporation and to fix before the issuance of any
shares of preferred stock of a particular series, the designation of such
series, the number of shares to comprise such series, the dividend rate or rates
payable with respect to the shares of such series, the redemption price or
prices, if any, and the terms and conditions of any redemption, the voting
rights, any sinking fund provisions for the redemption or purchase of the shares
of such series, the terms and conditions upon which the shares are convertible
or exchangeable, if they are convertible or exchangeable, and any other relative
rights, preferences and limitations pertaining to such series.
As of the date of this Prospectus, the Corporation has outstanding five
issues of preferred stock, representing in the aggregate 8,131,000 shares. See
"Description of the Corporation's Outstanding Capital Stock -- General". Another
6,000,000 shares of preferred stock have been reserved for issuance pursuant to
the Corporation's September 1991 shelf registration statement. As a result, on
the date hereof, the Corporation has 5,869,000 shares available for issuance as
Preferred Stock pursuant hereto.
Under interpretations adopted by the Federal Reserve Board, if the holders
of Preferred Stock of any series become entitled to vote for the election of
directors because dividends on such series are in arrears as described under
"Voting Rights" below, such series may then be deemed a "class of voting
securities" and a holder of 25% or more of such series (or a holder of 5% or
more if it otherwise exercises a "controlling influence" over the Corporation)
may then be subject to regulation as a bank holding company. In addition, at
such time as such series is deemed a class of voting securities, any other bank
holding company may be required to obtain the prior approval of the Federal
Reserve Board to acquire 5% or more of such series, and any person other than a
bank holding company may be required to obtain the prior approval of the Federal
Reserve Board to acquire 10% or more of such series.
The Preferred Stock shall have the dividend, liquidation, redemption,
voting and conversion or exchange rights set forth below unless otherwise
specified in the applicable Prospectus Supplement. Reference is made to the
Prospectus Supplement relating to the particular series of Preferred Stock
offered thereby for specific terms, including: (i) the designation, stated value
and liquidation preference of such Preferred Stock and the number of shares
offered; (ii) the initial public offering price at which such shares will be
issued; (iii) the dividend rate or rates (or method of calculation), the
dividend periods, the date on which dividends shall be payable and whether such
dividends shall be cumulative or noncumulative and, if cumulative, the dates
from which dividends shall commence to cumulate; (iv) any redemption or sinking
fund provisions; (v) any conversion or exchange provisions; and (vi) any
additional dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions of such Preferred Stock.
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The Preferred Stock will, when issued against payment therefor, be fully
paid and nonassessable. Unless otherwise specified in the applicable Prospectus
Supplement, the shares of each series of Preferred Stock will upon issuance rank
on a parity in all respects with the outstanding shares of preferred stock of
the Corporation. Holders of Preferred Stock will have no preemptive rights to
subscribe for any additional securities which may be issued by the Corporation.
Unless otherwise specified in the applicable Prospectus Supplement, Chemical
Bank (or its successors) will be the transfer agent and registrar for the
Preferred Stock.
Because the Corporation is a holding company, its rights and the rights of
holders of its securities, including the holders of Preferred Stock, to
participate in the distribution of assets of any subsidiary of the Corporation
upon the latter's liquidation or recapitalization will be subject to the prior
claims of such subsidiary's creditors and preferred stockholders, except to the
extent the Corporation may itself be a creditor with recognized claims against
such subsidiary or a holder of preferred stock of such subsidiary.
The shares of Preferred Stock will not be savings or deposit accounts or
other obligations of a bank and will not be insured by the FDIC.
DIVIDENDS
The holders of the Preferred Stock will be entitled to receive, when and as
declared by the Board of Directors of the Corporation, out of funds legally
available therefor, dividends at such rates and on such dates as will be
specified in the applicable Prospectus Supplement. Such rates may be fixed or
variable or both. If variable, the formula used for determining the dividend
rate for each dividend period will be specified in the applicable Prospectus
Supplement. Dividends will be payable to the holders of record as they appear on
the stock books of the Corporation on such record dates as will be fixed by the
Board of Directors of the Corporation. Dividends may be paid in the form of
cash, Preferred Stock (of the same or a different series) or Common Stock of the
Corporation, in each case as specified in the applicable Prospectus Supplement.
Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as specified in the applicable Prospectus Supplement. If the
Board of Directors of the Corporation fails to declare a dividend payable on a
dividend payment date on any Preferred Stock for which dividends are
noncumulative ("Noncumulative Preferred Stock"), then the holders of such
Preferred Stock will have no right to receive a dividend in respect of the
dividend period relating to such dividend payment date, and the Corporation will
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such Preferred Stock are declared or paid on any future dividend
payment dates.
The Corporation shall not declare or pay or set apart for payment any
dividends on any series of its preferred stock ranking, as to dividends, on a
parity with or junior to the outstanding Preferred Stock of any series unless
(i) if such series of Preferred Stock has a cumulative dividend ("Cumulative
Preferred Stock"), full cumulative 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 Preferred Stock for all dividend periods
terminating on or prior to the date of payment of any such dividends on such
other series of preferred stock of the Corporation, or (ii) if such series of
Preferred Stock is Noncumulative Preferred Stock, full dividends for the then
current dividend period on such Preferred Stock have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment. When dividends are not paid in full upon Preferred
Stock of any series and any other shares of preferred stock of the Corporation
ranking on a parity as to dividends with such Preferred Stock, all dividends
declared upon such Preferred Stock and any other preferred stock of the
Corporation ranking on a parity as to dividends with such Preferred Stock shall
be declared pro rata so that the amount of dividends declared per share on such
Preferred Stock and such other shares shall in all cases bear to each other the
same ratio that the accrued dividends per share on such Preferred Stock (which
shall not, if such Preferred Stock is Noncumulative Preferred Stock, include any
accumulation in respect of unpaid dividends for prior dividend periods) and such
other preferred stock bear to each other.
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Except as set forth in the preceding sentence, unless full dividends on the
outstanding Cumulative Preferred Stock of any series have been declared and paid
or set apart for payment for all past dividend periods and full dividends for
the then current dividend period on the outstanding Noncumulative Preferred
Stock of any series have been declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment, no dividends (other than in
Common Stock of the Corporation or other shares of the Corporation ranking
junior to such Preferred Stock as to dividends and upon liquidation) shall be
declared or paid or set aside for payment, nor shall any other distribution be
made, on the Common Stock of the Corporation or on any other shares of the
Corporation ranking junior to or on a parity with such Preferred Stock as to
dividends or upon liquidation.
Unless full dividends on the Cumulative Preferred Stock of any series have
been declared and paid or set apart for payment for all past dividend periods
and full dividends for the then current dividend period on the Noncumulative
Preferred Stock of any series have been declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment, no Common Stock
or any other shares of the Corporation ranking junior to or on a parity with
such Preferred Stock as to dividends or upon liquidation shall be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid or
made available for a sinking fund for the redemption of any such shares) by the
Corporation or any subsidiary of the Corporation except by conversion into or
exchange for shares of the Corporation ranking junior to such Preferred Stock as
to dividends and upon liquidation.
REDEMPTION
Preferred Stock may be redeemable, in whole or in part, at the option of
the Corporation, out of funds legally available therefor, and may be subject to
mandatory redemption pursuant to a sinking fund or otherwise, in each case upon
terms, at the times and at the redemption prices specified in the applicable
Prospectus Supplement and subject to the rights of holders of other securities
of the Corporation. Preferred Stock redeemed by the Corporation will be restored
to the status of authorized but unissued shares of preferred stock.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Corporation in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to all accrued and unpaid dividends
thereon (which shall not, if such Preferred Stock is Noncumulative Preferred
Stock, include any accumulation in respect of unpaid dividends for prior
dividend periods) to the date of redemption. The redemption price may be payable
in cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Stock of any series is payable only from
the net proceeds of the issuance of capital stock of the Corporation, the terms
of such Preferred Stock may provide that, if no such capital stock shall have
been issued or to the extent the net proceeds from any issuance are insufficient
to pay in full the aggregate redemption price then due, such Preferred Stock
shall automatically and mandatorily be converted into shares of the applicable
capital stock of the Corporation pursuant to conversion provisions specified in
the applicable Prospectus Supplement.
If fewer than all the outstanding shares of Preferred Stock of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Board of Directors of the Corporation and such shares may be redeemed pro
rata from the holders of record of such shares in proportion to the number of
such shares held by such holders (with adjustments to avoid redemption of
fractional shares) or by lot in a manner determined by the Board of Directors of
the Corporation.
Notwithstanding the foregoing, if any dividends, including any
accumulation, on Cumulative Preferred Stock of any series are in arrears, no
Preferred Stock of such series shall be redeemed unless all outstanding
Preferred Stock of such series is simultaneously redeemed, and the Corporation
shall not purchase or otherwise acquire any Preferred Stock of such series;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of Preferred Stock of such series pursuant to a
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purchase or exchange offer provided such offer is made on the same terms to all
holders of the Preferred Stock of such series.
Notice of redemption shall be given by mailing the same to each record
holder of the Preferred Stock to be redeemed, not less than 30 nor more than 60
days prior to the date fixed for redemption thereof, at the address of such
holder as the same shall appear on the stock books of the Corporation. Each
notice shall state: (i) the redemption date; (ii) the number of shares and
series of the Preferred Stock to be redeemed; (iii) the redemption price; (iv)
the place or places where certificates for such Preferred Stock are to be
surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi) the
date upon which the holder's conversion or exchange rights, if any, as to such
shares, shall terminate. If fewer than all the shares of Preferred Stock of any
series are to be redeemed, the notice mailed to each such holder thereof shall
also specify the number of shares of Preferred Stock to be redeemed from each
such holder.
If notice of redemption of any shares of Preferred Stock has been given and
if the funds necessary for such redemption have been set aside by the
Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of holders of any shares of Preferred Stock so called for redemption,
from and after the redemption date for such shares, dividends on such shares
shall cease to accrue and such shares shall no longer be deemed to be
outstanding, and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive the redemption price) shall cease. Upon
surrender, in accordance with such notice, of the certificates representing any
such shares (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice shall so state),
the redemption price set forth above shall be paid out of the funds provided by
the Corporation. If fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
CONVERSION OR EXCHANGE RIGHTS
The Prospectus Supplement relating to a series of Preferred Stock that is
convertible or exchangeable will state the terms on which shares of such series
are convertible or exchangeable into Common Stock, another series of Preferred
Stock or Debt Securities. To the extent regulatory approval may be required for
shares of Preferred Stock to be convertible or exchangeable for Debt Securities,
the Corporation will seek to obtain such approval.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of Preferred Stock shall be entitled
to receive out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of Common
Stock or any other class or series of shares ranking junior to such Preferred
Stock upon liquidation, liquidating distributions in the amount of the
liquidation preference of such Preferred Stock plus accrued and unpaid dividends
(which shall not, in the case of Noncumulative Preferred Stock, include any
accumulation in respect of unpaid dividends for prior dividend periods). If,
upon any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to Preferred Stock of any series
and any other shares of the Corporation ranking as to any such distribution on a
parity with such Preferred Stock are not paid in full, the holders of such
Preferred Stock and of such other shares will share ratably in any such
distribution of assets of the Corporation 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 Preferred Stock of any series will not be entitled to any further
participation in any distribution of assets by the Corporation.
VOTING RIGHTS
Except as indicated below or in the applicable Prospectus Supplement, or
except as expressly required by applicable law, the holders of Preferred Stock
will not be entitled to vote.
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Whenever dividends on any shares of Cumulative Preferred Stock shall be in
arrears for six consecutive quarterly periods, the holders of such shares of
Cumulative Preferred Stock (voting separately as a class with all other series
of cumulative preferred stock upon which like voting rights have been conferred
and are exercisable) will be entitled to vote for the election of two additional
directors of the Corporation at the next annual meeting of stockholders and at
each subsequent meeting until all dividends accumulated on such shares of
Cumulative Preferred Stock shall have been fully paid or set aside for payment.
In such case, the entire Board of Directors of the Corporation will be increased
by two directors.
So long as any shares of Preferred Stock remain outstanding, the
Corporation shall not, without the affirmative vote of the holders of at least
two-thirds of the votes of the shares of Preferred Stock outstanding at the
time, given in person or by proxy, at a meeting (voting separately as one
class): (i) authorize, create or issue, or increase the authorized or issued
amount of, any class or series of stock ranking prior to the Preferred Stock
with respect to payment of dividends or distribution of assets upon liquidation,
dissolution or winding up, (ii) authorize, create or issue, or increase the
authorized or issued amount of, any class or series of stock (including any
class or series of Preferred Stock) which ranks on a parity with the Preferred
Stock as to dividends and upon liquidation, dissolution or winding up ("Parity
Stock") unless the Articles Supplementary or other provisions of the charter
creating or authorizing such class or series provide that if in any case the
stated dividends or amounts payable upon liquidation, dissolution or winding up
are not paid in full on the Preferred Stock and all outstanding shares of Parity
Stock, the shares of all Parity Stock shall share ratably in the payment of
dividends, including accumulations (if any) in accordance with the sums which
would be payable on all Parity Stock if all dividends in respect of all shares
of Parity Stock were paid in full, and on any distribution of assets upon
liquidation, dissolution or winding up ratably in accordance with the sums which
would be payable in respect of all shares of Parity Stock if all sums payable
were discharged in full, or (iii) amend, alter or repeal the provisions of the
Articles of Incorporation, including the Articles Supplementary relating to the
Preferred Stock, whether by merger, consolidation, or otherwise, so as to
materially and adversely affect any right, preference, privilege or voting power
of such shares of Preferred Stock or the holders thereof; provided, however,
that any increase in the amount of the authorized preferred stock or any
outstanding series of preferred stock or any other capital stock of the
Corporation, or the creation and issuance of other series of preferred stock
including the Preferred Stock offered hereby or of any other capital stock of
the Corporation, in each case ranking on a parity with or junior to the
Preferred Stock with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
So long as any shares of Preferred Stock remain outstanding, the
Corporation will not, without the affirmative vote of the holders of at least a
majority of the votes of all shares of Parity Stock outstanding and entitled to
vote at the time, (a) directly or indirectly sell, transfer or otherwise dispose
of, or permit the Bank or any other subsidiary of the Corporation to issue,
sell, transfer or otherwise dispose of, any shares of voting stock of the Bank,
or securities convertible into or options, warrants or rights to acquire voting
stock of the Bank, unless after giving effect to any such transaction the Bank
remains a Controlled Subsidiary (as hereinafter defined) of the Corporation or
of a Qualified Successor Company (as hereinafter defined); (b) merge or
consolidate with, or convey substantially all of its assets to, any person or
corporation unless the entity surviving such merger or consolidation or the
transferee of such assets is the Corporation or a Qualified Successor Company;
or (c) permit the Bank to merge, consolidate with, or convey substantially all
of its assets to, any person or corporation unless the entity surviving such
merger or consolidation or the transferee of such assets is a Controlled
Subsidiary of the Corporation or of a Qualified Successor Company, except as
required to comply with applicable law. The term "Qualified Successor Company"
means a corporation (or other similar organization or entity whether organized
under or pursuant to the laws of the United States or any State thereof or of
another jurisdiction) which (i) is or is required to be a registered bank
holding company under the United States Bank Holding Company Act of 1956, as
amended, or any successor legislation, (ii) issues to the holders of Preferred
Stock, in exchange for the Preferred Stock, shares of
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preferred stock having at least the same relative rights and preferences as the
shares of Preferred Stock (the "Exchanged Stock"), (iii) immediately after such
transaction has no outstanding or authorized class of stock or equity securities
ranking prior to the Exchanged Stock with respect to the payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up and (iv)
holds, as a Controlled Subsidiary or Subsidiaries, either the Bank or one or
more other banking corporations which, collectively, immediately after such
transaction hold substantially all of the assets and liabilities which the Bank
held immediately prior to such transaction (which may be in addition to the
other assets and liabilities acquired in such transaction). "Controlled
Subsidiary" means any corporation at least 80% of the outstanding shares of
voting stock of which shall at the time be owned directly or indirectly by the
Corporation or a Qualified Successor Company. In connection with the exercise of
the voting rights described in this paragraph, the holders of all series of
Parity Stock which are granted such voting rights will vote as a class.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of Preferred Stock shall have been redeemed
or sufficient funds shall have been deposited in trust to effect such
redemption.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Corporation may issue receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent a fraction of a share of Preferred Stock.
Shares of Preferred Stock of each class or series represented by Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") among the Corporation, Chemical Bank (or its successor, the
"Preferred Stock Depositary") and the holders from time to time of the
Depositary Receipts. Subject to the terms of the Deposit Agreement, each owner
of a Depositary Receipt will be entitled, in proportion to the 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, conversion, redemption and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement at the time such receipts are
issued. Immediately following the issuance and delivery of the Preferred Stock
by the Corporation to the Preferred Stock Depositary, the Corporation will cause
the Preferred Stock Depositary to issue, on behalf of the Corporation, the
Depositary Receipts to the Underwriters. Copies of the applicable form of
Deposit Agreement and Depositary Receipt may be obtained from the Corporation
upon request, and the following summary of the form thereof filed as an exhibit
to the Registration Statement of which this Prospectus is a part is qualified in
its entirety by reference thereto.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Receipts in proportion to the number of such Depositary Receipts
owned by such holders, subject to certain obligations of holders to file proofs,
certificates and other information and to pay certain charges and expenses to
the Preferred Stock Depositary.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Stock Depositary, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the
Corporation, sell such property and distribute the net proceeds from such sale
to such holders.
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WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption), the holder of the Depositary Shares
evidenced thereby will be entitled to delivery, at such office to or upon his
order, of the number of whole shares of the Preferred Stock and any money or
other property represented by such Depositary Shares. Holders of Depositary
Receipts will be entitled to receive whole shares of the Preferred Stock on the
basis of the proportion of Preferred Stock represented by each Depositary Share
as specified in the relevant Prospectus Supplement, but holders of such whole
shares of Preferred Stock will not thereafter be entitled to receive Depositary
Shares therefor. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of whole shares of Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Corporation redeems shares of Preferred Stock held by the
Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of the
same redemption date the number of Depositary Shares representing shares of the
Preferred Stock so redeemed, provided the Corporation shall have paid in full to
the Preferred Stock Depositary the redemption price of the Preferred Stock to be
redeemed plus an amount equal to any accrued and unpaid dividends thereon to the
date fixed for redemption. The redemption price per Depositary Share will be
equal to the redemption price and any other amounts per share payable with
respect to the Preferred Stock. If less than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by the Preferred
Stock Depositary by lot or pro rata or other equitable method, in each case as
may be determined by the Corporation.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares so called for redemption will cease, except the
right to receive any moneys payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon such
redemption upon surrender to the Preferred Stock Depositary of the Depositary
Receipts evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Preferred Stock Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Receipts relating to 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 Preferred Stock
Depositary as to the exercise of the voting rights pertaining to the amount of
Preferred Stock represented by such holder's Depositary Receipts. The Preferred
Stock Depositary will endeavor, insofar as practicable, to vote the amount of
Preferred Stock represented by such Depositary Shares in accordance with such
instructions, and the Corporation will agree to take all reasonable action which
may be deemed necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will abstain
from voting shares of Preferred Stock to the extent it does not receive specific
instructions from the holders of Depositary Receipts representing shares of
Preferred Stock. The Preferred Stock Depositary's liability with respect to
voting underlying shares of Preferred Stock is limited.
EXCHANGE OF PREFERRED STOCK
Whenever the Corporation exchanges all of the shares of Preferred Stock
held by the Preferred Stock Depositary for Debt Securities or Common Stock, the
Preferred Stock Depositary will exchange as of the same exchange date all
Depositary Shares representing all of the shares of the Preferred Stock so
exchanged for Debt Securities or Common Stock, provided the Corporation shall
have issued and
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deposited with the Preferred Stock Depositary, Debt Securities or Common Stock
for all of the shares of the Preferred Stock to be exchanged. The exchange rate
per Depositary Share shall be equal to the exchange rate per share of Preferred
Stock multiplied by the fraction of a share of Preferred Stock represented by
one Depositary Share, plus all money and other property, if any, represented by
such Depositary Shares, including all amounts paid by the Corporation in respect
of dividends which on the exchange date have accrued on the shares of Preferred
Stock to be so exchanged and have not theretofore been paid.
CONVERSION OF PREFERRED STOCK
The Depositary Shares, as such, are not convertible or exchangeable into
Common Stock or any other securities or property of the Corporation.
Nevertheless, if so specified in the applicable Prospectus Supplement relating
to an offering of Depository Shares, the Depositary Receipts may be surrendered
by holders thereof to the Preferred Stock Depositary with written instructions
to the Preferred Stock Depositary to instruct the Corporation to cause
conversion or exchange of the Preferred Stock represented by the Depositary
Shares evidenced by such receipts into whole shares of Common Stock, other
shares of Preferred Stock or Debt Securities of the Corporation, and the
Corporation has agreed that upon receipt of such instructions and any amounts
payable in respect thereof, it will cause the conversion or exchange thereof
utilizing the same procedures as those provided for delivery of Preferred Stock
to effect such conversions or exchange. If the Depositary Shares represented by
a Depositary Receipt are to be converted in part only, a new Depositary Receipt
or Receipts will be issued for any Depositary Shares not to be converted or
exchanged. See "Description of Preferred Stock Conversion or Exchange Rights."
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 Corporation and the Preferred Stock Depositary. However, any
amendment that materially and adversely alters the rights of the holders of
Depositary Receipts will not be effective unless such amendment has been
approved by the holders of at least a majority (or, in the case of amendments
relating to or affecting rights to receive dividends or distributions or voting,
redemption or conversion rights, two-thirds) of the Depositary Shares then
outstanding.
The Deposit Agreement may be terminated by the Corporation upon not less
than 60 days' notice whereupon the Preferred Stock Depositary shall deliver or
make available to each holder of Depositary Receipts, upon surrender of the
Depositary Receipts held by such holder, such number of whole or fractional
shares of Preferred Stock represented by such receipts. The Deposit Agreement
will automatically terminate if (i) all outstanding Depositary Shares have been
redeemed, (ii) there has been a final distribution in respect of the Preferred
Stock in connection with any liquidation, dissolution or winding up of the
Corporation and such distribution has been distributed to the holders of
Depositary Receipts or (iii) each share of Preferred Stock shall have been
converted or exchanged.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Corporation will pay all transfer and other taxes and governmental
charges arising solely from the existence of the Deposit Agreement. The
Corporation will pay the fees and expenses of the Preferred Stock Depositary in
connection with the performance of its duties under the Deposit Agreement.
Holders of Depositary Receipts will pay transfer and other taxes and
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Corporation notice of its election to do so, and the Corporation may at any time
remove the Preferred Stock Depositary, any such resignation or removal to take
effect upon the appointment of a successor Preferred Stock Depositary, which
successor Preferred Stock Depositary must be appointed within 60 days after
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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.
MISCELLANEOUS
The Preferred Stock Depositary will forward to holders of Depositary Shares
any reports and communications from the Corporation which are received by the
Preferred Stock Depositary with respect to the underlying Preferred Stock.
Neither the Preferred Stock Depositary nor the Corporation will be liable
if it is prevented from or delayed in, by law or any circumstances beyond its
control, performing its obligations under the Deposit Agreement. The obligations
of the Corporation and the Preferred Stock Depositary under the Deposit
Agreement will be limited to performing their duties thereunder without
negligence or willful misconduct, and the Corporation and the Depositary will
not be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or any shares of Preferred Stock unless satisfactory indemnity
is furnished. The Corporation and the Preferred Stock Depositary may rely on
advice of counsel or accountants, or information provided by persons presenting
shares of Preferred Stock for deposit, holders of Depositary Shares or other
persons believed to be authorized or competent and on documents believed to be
genuine.
In the event the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Corporation, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received from
the Corporation.
DESCRIPTION OF PREFERRED STOCK WARRANTS
The Corporation may issue Preferred Stock Warrants for the purchase of
Preferred Stock. Preferred Stock Warrants may be issued independently or
together with other Securities offered by any Prospectus Supplement and may be
attached to or separate from such other Securities. Each series of Preferred
Stock Warrants will be issued under one or more warrant agreements (each a
"Preferred Stock Warrant Agreement") to be entered into between the Corporation
and a bank or trust company, as Preferred Stock Warrant Agent, all as set forth
in the Prospectus Supplement relating to the particular issue of offered
Preferred Stock Warrants. The Preferred Stock Warrant Agent will act solely as
an agent of the Corporation in connection with the Preferred Stock Warrant
Certificates and will not assume any obligation or relationship of agency or
trust for or with any holders of Preferred Stock Warrant Certificates or
beneficial owners of Preferred Stock Warrants. Copies of the form of Preferred
Stock Warrant Agreements, including the form of Preferred Stock Warrant
Certificates representing the Preferred Stock Warrants, are filed as exhibits to
the Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the form of Preferred Stock Warrant Agreement
and Preferred Stock Warrant Certificate do not purport to be complete and are
subject to and are qualified in their entirety by reference to, all the
provisions of the Preferred Stock Warrant Agreement and the Preferred Stock
Warrant Certificates.
GENERAL
If Preferred Stock Warrants are offered, the applicable Prospectus
Supplement will describe the terms of such Preferred Stock Warrants, including
the following, where applicable: (1) the offering price; (2) the designation,
aggregate number and terms of the series of Preferred Stock purchasable upon
exercise of such Preferred Stock Warrants and minimum number of Preferred Stock
Warrants that are exercisable; (3) the designation and terms of the series of
Preferred Stock with which such Preferred Stock Warrants are being offered and
the number of such Preferred Stock Warrants being offered with each such
Preferred Stock; (4) the date on and after which such Preferred Stock Warrants
and the related series of Preferred Stock will be transferable separately; (5)
the number and stated values of the series of Preferred Stock purchasable upon
exercise of each such Preferred Stock Warrant and the price at which such number
of shares of Preferred Stock of such series may be purchased upon such exercise;
(6) the date on which the right to exercise such Preferred Stock Warrants shall
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commence and the date on which such right shall expire (the "Preferred Stock
Warrant Expiration Date"); (7) whether the Preferred Stock Warrants represented
by the Preferred Stock Warrant Certificates will be issued in registered or
bearer form; (8) information with respect to book-entry procedures, if any; and
(9) any other terms of such Preferred Stock Warrants for the purchase of shares
of Preferred Stock which shall not be inconsistent with the provisions of the
Preferred Stock Warrant Agreements.
Preferred Stock Warrant Certificates may be exchanged for new Preferred
Stock Warrant Certificates of different denominations, may (if in registered
form) be presented for registration of transfer, and may be exercised at the
corporate trust office of the Preferred Stock Warrant Agent or any other office
indicated in the applicable Prospectus Supplement. Prior to the exercise of any
Preferred Stock Warrant, a Holder thereof shall have no rights of a holder of
shares of the Preferred Stock purchasable upon such exercise, including the
right to receive payment of dividends, if any, on the underlying Preferred Stock
or the right to vote such underlying Preferred Stock.
Prospective purchasers of Preferred Stock Warrants should be aware that
special U.S. federal income tax, accounting and other considerations may be
applicable to instruments such as Preferred Stock Warrants. The Prospectus
Supplement relating to any issue of Preferred Stock Warrants will describe such
considerations.
EXERCISE OF PREFERRED STOCK WARRANTS
Each Preferred Stock Warrant will entitle the Holder thereof to purchase
such number of shares of Preferred Stock at such exercise price as shall be set
forth in, or calculable from, the Prospectus Supplement relating to the offered
Preferred Stock Warrants. After the close of business on the Expiration Date (or
such later date to which such Expiration Date may be extended by the
Corporation), unexercised Preferred Stock Warrants will become void.
Preferred Stock Warrants may be exercised by delivery to the Preferred
Stock Warrant Agent of payment as provided in the applicable Prospectus
Supplement of the amount required to purchase the shares of Preferred Stock
purchasable upon such exercise together with certain information set forth on
the reverse side of the Preferred Stock Warrant Certificate. Preferred Stock
Warrants will be deemed to have been exercised upon receipt of the exercise
price, subject to the receipt, within five business days, of the Preferred Stock
Warrant Certificate evidencing such Preferred Stock Warrants. Upon receipt of
such payment and the Preferred Stock Warrant Certificate properly completed and
duly executed at the corporate trust office of the Preferred Stock Warrant Agent
or any other office indicated in the applicable Prospectus Supplement, the
Corporation will, as soon as practicable, issue and deliver the shares of
Preferred Stock purchasable upon such exercise. If fewer than all of the
Preferred Stock Warrants represented by such Preferred Stock Warrant Certificate
are exercised, a new Preferred Stock Warrant Certificate will be issued for the
remaining number of Preferred Stock Warrants.
MODIFICATIONS
The Preferred Stock Warrant Agreement and the terms of the Preferred Stock
Warrants may be amended by the Corporation and the Preferred Stock Warrant
Agent, without the consent of the Holders, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained therein, or in any other manner which the
Corporation may deem necessary or desirable and which will not materially and
adversely affect the interests of the owners.
The Corporation and the Preferred Stock Warrant Agent also may modify or
amend the Preferred Stock Warrant Agreement and the terms of the Preferred Stock
Warrants, with the consent of the Holders of not less than a majority in number
of the then outstanding unexercised Preferred Stock Warrants affected, provided
that no such modification or amendment that shortens the period of time during
which the Preferred Stock Warrants may be exercised or otherwise materially and
adversely affects the exercise rights of the Holders of the Preferred Stock
Warrants or reduces the number of outstanding Preferred Stock Warrants the
consent of whose Holders is required for modification or
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amendment of the Preferred Stock Warrant Agreement or the terms of the Preferred
Stock Warrants may be made without the consent of the Holders affected thereby.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Corporation, then the successor or assuming corporation shall succeed to and be
substituted for the Corporation in, and the Corporation will be relieved of any
further obligation under, the Preferred Stock Warrant Agreement or the Preferred
Stock Warrants.
ENFORCEABILITY OF RIGHTS BY HOLDERS
The Preferred Stock Warrant Agent will act solely as an agent of the
Corporation in connection with the issuance and exercise of Preferred Stock
Warrants. The Preferred Stock Warrant Agent shall have no duty or responsibility
in case of any default by the Corporation in the performance of its obligations
under the Preferred Stock Warrant Agreement or Preferred Stock Warrant
Certificate. Each Holder may, without the consent of the Preferred Stock Warrant
Agent, enforce by appropriate legal action, on his own behalf, his right to
exercise his Preferred Stock Warrants.
DESCRIPTION OF COMMON STOCK WARRANTS
The Corporation may issue Common Stock Warrants for the purchase of Common
Stock. Common Stock Warrants may be issued independently or together with other
Securities offered by any Prospectus Supplement and may be attached to or
separate from such Securities. Each series of Common Stock Warrants will be
issued under one or more warrant agreements (each a "Common Stock Warrant
Agreement") to be entered into between the Corporation and a bank or trust
company, as Common Stock Warrant Agent, all as set forth in the Prospectus
Supplement relating to the particular issue of Common Stock Warrants. The Common
Stock Warrant Agent will act solely as an agent of the Corporation in connection
with the Common Stock Warrant Certificates and will not assume any obligation or
relationship of agency or trust for or with any holders of Common Stock Warrant
Certificates or beneficial owners of Common Stock Warrants. Copies of the form
of Common Stock Warrant Agreements, including the form of Common Stock Warrant
Certificates representing the Common Stock Warrants, are filed as exhibits to
the Registration Statement to which this Prospectus pertains. The following
summaries of certain provisions of the form of Common Stock Warrant Agreement
and Common Stock Warrant Certificate do not purport to be complete and are
subject to and are qualified in their entirety by reference to, all the
provisions of the Common Stock Warrant Agreement and the Common Stock Warrant
Certificates.
GENERAL
If Common Stock Warrants are offered, the related Prospectus Supplement
will describe the terms of such Common Stock Warrants, including the following,
where applicable: (1) the offering price; (2) the aggregate number of shares of
Common Stock purchasable upon exercise of such Common Stock Warrants and minimum
number of Common Stock Warrants that are exercisable; (3) the number of shares
of Common Stock with which such Common Stock Warrants are being offered and the
number of such Common Stock Warrants being offered with each such share of
Common Stock; (4) the date on and after which such Common Stock Warrants and the
related shares of Common Stock will be transferable separately; (5) the number
of shares of Common Stock purchasable upon exercise of each such Common Stock
Warrant and the price at which such number of shares of Common Stock may be
purchased upon such exercise; (6) the date on which the right to exercise such
Common Stock Warrants shall commence and the date on which such right shall
expire (the "Common Stock Warrant Expiration Date"); (7) whether the Common
Stock Warrants represented by the Common Stock Warrant Certificates will be
issued in registered or bearer form; (8) information with respect to book-entry
procedures, if any; and (9) any other terms of such Common Stock Warrants for
the purchase of shares of Common Stock which shall not be inconsistent with the
provisions of the Common Stock Warrant Agreements.
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Common Stock Warrant Certificates may be exchanged for new Common Stock
Warrant Certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Common Stock Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Common Stock
Warrants to purchase Common Stock, Holders of such Common Stock Warrants will
not have any rights of holders of shares of the Common Stock purchasable upon
such exercise, including the right to receive payments of dividends, if any, on
the Common Stock purchasable upon such exercise or to exercise any applicable
right to vote.
Prospective purchasers of Common Stock Warrants should be aware that
special U.S. federal income tax, accounting and other considerations may be
applicable to instruments such as Common Stock Warrants. The Prospectus
Supplement relating to any issue of Common Stock Warrants will describe such
considerations.
EXERCISE OF COMMON STOCK WARRANTS
Each Common Stock Warrant will entitle the Holder thereof to purchase such
number of shares of Common Stock at such exercise price as shall be set forth
in, or calculable from, the Prospectus Supplement relating to the Common Stock
Warrants. After the close of business on the Expiration Date (or such later date
to which such Expiration Date may be extended by the Corporation), unexercised
Common Stock Warrants will become void.
Common Stock Warrants may be exercised by delivery to the Common Stock
Warrant Agent of payment as provided in the applicable Prospectus Supplement of
the amount required to purchase the shares of Common Stock purchasable upon such
exercise together with certain information set forth on the reverse side of the
Common Stock Warrant Certificate. Common Stock Warrants will be deemed to have
been exercised upon receipt of the exercise price, subject to the receipt,
within five business days, of the Common Stock Warrant Certificate evidencing
such Common Stock Warrants. Upon receipt of such payment and the Common Stock
Warrant Certificate properly completed and duly executed at the corporate trust
office of the Common Stock Warrant Agent or any other office indicated in the
applicable Prospectus Supplement, the Corporation will, as soon as practicable,
issue and deliver the shares of Common Stock purchasable upon such exercise. If
fewer than all of the Common Stock Warrants represented by such Common Stock
Warrant Certificate are exercised, a new Common Stock Warrant Certificate will
be issued for the remaining amount of Common Stock Warrants.
MODIFICATIONS
The Common Stock Warrant Agreement and the terms of the Common Stock
Warrants may be amended by the Corporation and the Common Stock Warrant Agent,
without the consent of the Holders, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective or inconsistent provision
contained therein, or in any other manner which the Corporation may deem
necessary or desirable and which will not materially and adversely affect the
interests of the owners.
The Corporation and the Common Stock Warrant Agent also may modify or amend
the Common Stock Warrant Agreement and the terms of the Common Stock Warrants,
with the consent of the Holders of not less than a majority in number of the
then outstanding unexercised Common Stock Warrants affected, provided that no
such modification or amendment that shortens the period of time during which the
Common Stock Warrants may be exercised or otherwise materially and adversely
affects the exercise rights of the Holders of the Common Stock Warrants or
reduces the number of outstanding Common Stock Warrants the consent of whose
Holders is required for modification or amendment of the Common Stock Warrant
Agreement or the terms of the Common Stock Warrants may be made without the
consent of the Holders affected thereby.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by a Common
Stock Warrant are subject to adjustment in
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certain events, including: (i) the issuance of Common Stock as a dividend or
distribution on the Common Stock; (ii) subdivisions and combinations of the
Common Stock; (iii) the issuance to all holders of Common Stock of certain
rights or warrants entitling them to subscribe for or purchase Common Stock
within 45 days after the date fixed for the determination of the stockholders
entitled to receive such rights or warrants, at less than the current market
price (as defined in the Common Stock Warrant Agreement for such series of
Common Stock Warrants); and (iv) the distribution to all holders of Common Stock
of evidences of indebtedness or assets of the Corporation (excluding certain
cash dividends and distributions described below) or rights or warrants
(excluding those referred to above). In the event that the Corporation shall
distribute any rights or warrants to acquire capital stock pursuant to clause
(iv) above (the "Capital Stock Rights"), pursuant to which separate certificates
representing such Capital Stock Rights will be distributed subsequent to the
initial distribution of such Capital Stock Rights (whether or not such
distribution shall have occurred prior to the date of the issuance of a series
of Common Stock Warrants), such subsequent distribution shall be deemed to be
the distribution of such Capital Stock Rights; provided, however, that the
Corporation may, in lieu of making any adjustment in the exercise price of, and
the number of shares of Common Stock covered by, a Common Stock Warrant upon a
distribution of separate certificates representing such Capital Stock Rights,
make proper provision so that each holder of such a Common Stock Warrant who
exercises such Common Stock Warrant (or any portion thereof) (a) before the
record date for such distribution of separate certificates shall be entitled to
receive upon such exercise shares of Common Stock issued with Capital Stock
Rights and (b) after such record date and prior to the expiration, redemption or
termination of such Capital Stock Rights shall be entitled to receive upon such
exercise, in addition to the shares of Common Stock issuable upon such exercise,
the same number of such Capital Stock Rights as would a holder of the number of
shares of Common Stock that such Common Stock Warrant so exercised would have
entitled the Holder thereof to acquire in accordance with the terms and
provisions applicable to the Capital Stock Rights if such Common Stock Warrant
was exercised immediately prior to the record date for such distribution. Common
Stock owned by or held for the account of the Corporation or any majority owned
subsidiary shall not be deemed outstanding for the purpose of any adjustment.
No adjustment in the exercise price of, and the number of shares of Common
Stock covered by, a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. In any
such cases, no adjustment will be required unless such adjustment would require
a change of at least 1% in the exercise price then in effect, provided, however,
that any such adjustment not so made will be carried forward and taken into
account in any subsequent adjustment; and provided further that any such
adjustment not so made shall be made no later than three years after the
occurrence of the event requiring such adjustment to be made or carried forward.
Notwithstanding any of the foregoing, the issuance of Common Stock under any
employee benefit plan of the Corporation providing for the purchase of shares of
Common Stock by the Corporation's stockholders or employees at a price less than
the market price for such shares and the grant or exercise of any rights
thereunder, shall not require an adjustment to the exercise price of, and the
number of shares of Common Stock covered by, a Common Stock Warrant. Except as
stated above, the exercise price of, and the number of shares of Common Stock
covered by, a Common Stock Warrant will not be adjusted for the issuance of
Common Stock or any securities convertible into or exchangeable for Common
Stock, or securities carrying the right to purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Corporation, or (iii) a sale or conveyance
to another corporation of the property and assets of the Corporation as an
entirety or substantially as an entirety, in each case as a result of which
holders of the Corporation's Common Stock shall be entitled to receive stock,
securities, other property or assets (including cash) with respect to or in
exchange for such Common Stock, the Holders of the Common Stock Warrants then
outstanding will be entitled thereafter to convert such Common Stock Warrants
into the kind and amount of shares of stock and other securities or property
which they would have received upon such reclassification, change,
consolidation, merger, sale or conveyance had
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such Common Stock Warrants been exercised immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Corporation, then the successor or assuming corporation shall succeed to and be
substituted for the Corporation in, and the Corporation will be relieved of any
further obligation under, the Common Stock Warrant Agreement or the Common Stock
Warrants.
ENFORCEABILITY OF RIGHTS BY HOLDERS
The Common Stock Warrant Agent will act solely as an agent of the
Corporation in connection with the issuance and exercise of Common Stock
Warrants. The Common Stock Warrant Agent shall have no duty or responsibility in
case of any default by the Corporation in the performance of its obligations
under the Common Stock Warrant Agreement or Common Stock Warrant Certificate.
Each Holder may, without the consent of the Common Stock Warrant Agent, enforce
by appropriate legal action, on his own behalf, his right to exercise his Common
Stock Warrants.
DESCRIPTION OF THE CORPORATION'S OUTSTANDING CAPITAL STOCK
GENERAL
The Corporation's Articles of Incorporation authorize the issuance of
150,000,000 shares of Common Stock, and 15,000,000 shares of preferred stock
(which may be issued from time to time by, and with such designations,
preferences, voting rights and other rights, qualifications, limitations and
restrictions determined in a resolution of, the Corporation's Board of
Directors). At the Annual Meeting of Stockholders of the Corporation to be held
on Wednesday, April 21, 1993, it has been proposed that the authorized number of
shares of preferred stock be increased from 15,000,000 to 20,000,000 shares.
The rights of holders of Common Stock will be subject to, and may be
adversely affected by, the rights of holders of any Preferred Stock that has
been issued and may be issued in the future. The Board of Directors may cause
shares of Preferred Stock to be issued to obtain additional financing, in
connection with acquisitions, to officers, directors and employees of the
Corporation and its subsidiaries pursuant to benefit plans or otherwise and for
other proper corporate purposes.
At December 31, 1992, there were outstanding 52,190,243 shares of Common
Stock, 678,500 shares of Cumulative Preferred Stock, Floating Rate Series B (the
"Floating Rate Preferred Stock"), 625 shares of Series A and 625 shares of
Series B Dutch Auction Rate Transferable Securities Preferred Stock ("DARTS"),
750 shares of Remarketed Preferred Stock ("RP"), 500 shares of Money Market
Cumulative Preferred Stock ("MMP"), 3,450,000 shares of $3.375 Cumulative
Convertible Preferred Stock (the "Convertible Preferred Stock") and 4,000,000
shares of $1.9375 Cumulative Preferred Stock (the "$1.9375 Preferred Stock").
The Floating Rate Preferred Stock, the DARTS, the RP, the MMP, the Convertible
Preferred Stock and the $1.9375 Preferred Stock are collectively referred to as
the "Outstanding Preferred Stock". All outstanding shares of Common Stock and
Preferred Stock are fully paid and nonassessable. Another 6,000,000 shares of
Preferred Stock have been reserved for issuance pursuant to the Corporation's
September 1991 shelf registration statement.
The capital stock of the Corporation does not represent or constitute a
deposit account and is not insured by the FDIC.
The statements made under this caption include summaries of certain
provisions contained in the Corporation's Articles of Incorporation and By-Laws
and of various Articles Supplementary pursuant to which the Outstanding
Preferred Stock has been issued. These statements do not purport to be complete
and are qualified in their entirety by reference to such Articles of
Incorporation and By-Laws and such Articles Supplementary.
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COMMON STOCK
Dividends. The Corporation may pay dividends on the Common Stock out of
funds legally available therefor when, as and if declared by the Board of
Directors. Currently, the principal sources of funds available for the payment
of dividends are dividends received from the Bank and Manhattan and earnings
from investments. The payment of dividends by the Bank and Manhattan is subject
to limitations imposed by the laws and applicable regulations of the United
States, the State of New York and the Office of the Comptroller of the Currency.
These limitations are based on the level of retained earnings of each of the
three entities. If dividends paid by Manhattan exceed the amount of its earnings
and profits accumulated after 1951 as computed for federal income tax purposes,
such excess could be deemed, for federal income tax purposes, to have been paid
out of Manhattan's bad debt reserves, in which case Manhattan would have
additional gross income. Manhattan, however, does not anticipate that dividends
paid will exceed such tax earnings and profits.
Voting Rights. Except as described under "Outstanding Preferred
Stock -- Voting Rights" below, the holders of the Common Stock currently possess
exclusive voting rights in the Corporation. The Board of Directors of the
Corporation may, however, specify voting power with respect to any Preferred
Stock which may be issued in the future. Each holder of Common Stock is entitled
to one vote per share. There is no cumulative voting in the election of
directors. Actions requiring approval of stockholders generally require approval
by a majority vote of outstanding shares.
Liquidation Rights. In the event of liquidation, dissolution, or winding
up of the Corporation, the holders of its Common Stock would be entitled to
receive, after payment of all of its debts, liabilities and of all sums to which
holders of any Preferred Stock may be entitled, all of the remaining assets of
the Corporation.
Preemptive Rights. Holders of the Common Stock are not entitled to
preemptive rights with respect to any shares that may be issued.
OUTSTANDING PREFERRED STOCK
General. The Outstanding Preferred Stock has 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 Corporation. Holders
of the Outstanding Preferred Stock do not have any preemptive rights.
Dividends. Dividends on the Outstanding Preferred Stock are cumulative.
Dividends on the Cumulative Floating Rate Preferred Stock, DARTS, RP and MMP are
at floating rates periodically determined on the basis of various formulae or
auction procedures. Dividends on the Convertible Preferred Stock are payable
quarterly at an annual rate of $3.375 per share. Dividends on the $1.9375
Preferred Stock are payable quarterly at an annual rate of $1.9375 per share.
Voting Rights. Whenever dividends on the Outstanding Preferred Stock are
not paid in full (for six consecutive quarterly periods, in the case of the
$1.9375 Preferred Stock, the Convertible Preferred Stock, the Floating Rate
Preferred Stock and the DARTS, and for such number of dividend periods which
shall in the aggregate contain not less than 540 days, in the case of the RP and
for not less than 540 consecutive days, in the case of the MMP), the holders of
any such Outstanding Preferred Stock shall be entitled to vote for the election
of two directors until all past due dividends have been paid or provided for.
The holders of the $1.9375 Preferred Stock are entitled to one-half vote per
share and the holders of the Convertible Preferred Stock and the Floating Rate
Preferred Stock are entitled to one vote per share on all matters on which they
are entitled to vote (representing one vote per $50 of liquidation preference).
The holders of the DARTS, the holders of the MMP and the holders of the RP are
entitled to 2,000 votes per share on all matters on which they are entitled to
vote (representing one vote per $50 of liquidation preference). Holders of the
Outstanding Preferred Stock also have voting rights (a) in the case of the
Corporation's authorization, creation or issuance, or any increase in authorized
or issued amounts, of any class or series of stock ranking either prior to such
Outstanding Preferred Stock or, in certain cases, on a parity therewith or (b)
in connection with the amendment, authorization or repeal of provisions of the
Corporation's Articles of Incorporation (including Articles
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Supplementary relating to such Outstanding Preferred Stock) that would
materially and adversely affect any right, preference, privilege or voting power
of such shares of Outstanding Preferred Stock or the holders thereof. The
affirmative vote of holders of the Outstanding Preferred Stock may also be
required in connection with (i) the sale, transfer or disposition of certain
assets of the Corporation, (ii) the merger or consolidation or sale of
substantially all of the assets of the Corporation or (iii) the merger,
consolidation or sale of substantially all of the assets of the Bank, unless in
the case of either (ii) or (iii) the Corporation or the Bank, as the case may
be, is the surviving entity or the surviving entity is a bank or bank holding
company meeting certain requirements.
Liquidation Rights. In the event of liquidation, dissolution or winding up
of the Corporation, the holders of the outstanding $1.9375 Preferred Stock are
entitled to receive a distribution of $25.00 per share, the holders of the
Convertible Preferred Stock and the Floating Rate Preferred Stock are entitled
to receive a distribution of $50.00 per share, and the holders of the
outstanding DARTS, RP and MMP are entitled to receive a distribution of $100,000
per share, plus, in each case, accrued dividends, if any.
Redemption. The Corporation has the option to redeem the Outstanding
Preferred Stock, in each case, as a whole or in part, on specified dates and at
specified redemption prices.
PLAN OF DISTRIBUTION
The Corporation may sell the Securities: (i) through underwriters; (ii) to
dealers; (iii) through agents; or (iv) directly to a limited number of
institutional purchasers or to a single purchaser. The Prospectus Supplement
with respect to the Securities will set forth the name or names of the
underwriters, if any, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers.
If underwriters are used in a sale of any Securities, such Securities will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. The Securities may be offered to the public through underwriters or
through a group of underwriters. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase the Securities will
be subject to certain conditions precedent, and the underwriters will be
obligated to purchase all the Securities if any are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
If a dealer is utilized in the sale of any Securities in respect of which
this Prospectus is delivered, the Corporation will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale. The
name of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
The Securities may be sold by the Corporation through agents designated by
the Corporation from time to time. Any such agent involved in the offer or sale
of the Securities offered in respect of which this Prospectus is delivered will
be named, and any fees or commissions payable by the Corporation to such agent
will be set forth, in the Prospectus Supplement. Unless otherwise indicated in
the Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.
The Securities may be sold directly by the Corporation to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act of 1933 with respect to any resale thereof. The terms of any
such sales will be described in the Prospectus Supplement relating thereto.
The Corporation may also issue contracts under which the counterparty may
be required to purchase Debt Securities, Preferred Stock or Depositary Shares.
Such contracts would be issued with Debt Securities, Preferred Stock or
Depositary Shares and/or Warrants in amounts, at prices and on terms to be set
forth in a Prospectus Supplement.
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If so indicated in the Prospectus Supplement, the Corporation will
authorize underwriters, dealers and agents to solicit offers by certain
specified institutions to purchase the Securities from the Corporation at the
public offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Corporation, to indemnification by the Corporation against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such underwriters, dealers or agents
may be required to make in respect thereof. Any such underwriters, dealers and
agents may be customers of, engage in transactions with, or perform services
for, the Corporation in the ordinary course of business.
The place and time of delivery of the Securities will be set forth in the
Prospectus Supplement.
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
When so provided in the Prospectus Supplement, investors in the Global
Securities representing any of the Securities issued hereunder may hold
beneficial interest in such Global Securities through the Depository, CEDEL or
Euroclear (as defined below) or through participants. The Global Securities may
be traded as home market instruments in both the European and U.S. domestic
markets. Initial settlement and all secondary trades will settle as set forth in
the applicable Prospectus Supplement.
Cedel S.A. ("CEDEL") is incorporated under the laws of Luxembourg as a
professional depository. CEDEL holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between CEDEL participants through electronic book-entry changes in
accounts of CEDEL participants, thereby eliminating the need for physical
movement of certificates. Transactions may be settled in CEDEL in any of 28
currencies, including United States dollars. CEDEL provides to its participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. CEDEL interfaces with domestic markets in several countries. As a
professional depository, CEDEL is subject to regulation by the Luxembourg
Monetary Institute. CEDEL participants are recognized financial institutions
around the world, including underwriters, securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations and may
include the underwriters. Indirect access to CEDEL is also available to others,
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a CEDEL participant, either directly or
indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System and to clear and settle transactions
between Euroclear participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Transactions may now be settled in any of 27 currencies, including United
States dollars. The Euroclear System includes various other services, including
securities lending and borrowing, and interfaces with domestic markets in
several countries generally similar to the arrangements for cross-market
transfers with the Depository. The Euroclear System is operated by Morgan
Guaranty Trust Company of New York, Brussels, Belgium office (the "Euroclear
Operator" or "Euroclear"), under contract with Euroclear Clearance System S.C.,
a Belgian cooperative corporation (the "Cooperative"). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the Euroclear Operator,
not the Cooperative. The Cooperative establishes policy for the Euroclear System
on behalf of Euroclear participants. Euroclear participants include banks
(including central banks), securities brokers and dealers and other professional
financial intermediaries and may include the underwriters. Indirect access to
the Euroclear System is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear participant, either directly
or indirectly.
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The Euroclear Operator is the Belgian branch of Morgan Guaranty Trust
Company of New York ("Morgan") which is a member bank of the Federal Reserve
System. As such, it is regulated and examined by the Federal Reserve Board and
the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawals of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear participants, and has no record
of or relationship with persons holding through Euroclear participants.
Principal, premium, if any, and interest payments with respect to
Securities held through CEDEL or Euroclear will be credited to the cash accounts
of CEDEL participants or Euroclear participants in accordance with the relevant
system's rules and procedures, to the extent received by its depositary. Such
distributions will be subject to tax reporting in accordance with relevant
United States tax laws and regulations as described below. The CEDEL or the
Euroclear Operator, as the case may be, will take any other action permitted to
be taken by a holder under the relevant Indenture on behalf of a CEDEL
participant or Euroclear participant only in accordance with its relevant rules
and procedures and subject to its depositary's ability to effect such actions on
its behalf through the Depository.
INITIAL SETTLEMENT
All Global Securities will be registered in the name of Cede & Co. as
nominee of the Depository. Investors' interests in the Global Securities will be
represented through financial institutions acting on their behalf as direct and
indirect participants in the Depository. As a result, CEDEL and Euroclear will
hold positions on behalf of their participants through their respective
depositaries, Citibank and Morgan, which in turn will hold such positions in
accounts as participants of the Depository.
Global Securities held through the Depository will follow the settlement
practices described above. Investor securities custody accounts will be credited
with their holdings against payment on the settlement date. Global Securities
held through CEDEL or Euroclear accounts will follow the settlement procedures
applicable to conventional eurobonds, except that there will be no temporary
global security and no "lock-up" or restricted period. Global Securities will be
credited to the securities custody accounts on the settlement date against
payment.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between Depository Participants. Secondary market trading between
Depository participants will be settled using the procedures described above.
Trading between CEDEL and/or Euroclear Participants. Secondary market
trading between CEDEL participants and/or Euroclear participants will be settled
using the procedures applicable to conventional eurobonds.
Trading between Depository Seller and CEDEL or Euroclear Purchaser. When
beneficial interests in the Global Securities are to be transferred from the
account of a Depository participant to the account of a CEDEL participant or a
Euroclear participant, the purchaser will send instructions to CEDEL or
Euroclear through a participant at least one business day prior to settlement.
CEDEL or Euroclear will instruct Citibank or Morgan, respectively, as the case
may be, to receive a beneficial interest in the Global Securities against
payment. Unless otherwise set forth in the Prospectus Supplement, payment will
include interest accrued on the beneficial interest in the Global Securities so
transferred from and
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including the last coupon payment date to and excluding the settlement date, on
the basis on which interest is calculated on the Debt Securities. For
transactions settling on the 31st of the month, payment will include interest
accrued to and excluding the first day of the following month. Payment will then
be made by Citibank or Morgan to the Depository participant's account against
delivery of the beneficial interest in the Global Securities. After settlement
has been completed, the beneficial interest in the Global Securities will be
credited to the respective clearing system and by the clearing system, in
accordance with its usual procedures, to the CEDEL or Euroclear participant's
account. The securities credit will appear the next day (European time) and the
cash debit will be back-valued to, and the interest on the beneficial interest
in Global Securities will accrue from, the value date (which would be the
preceding day when settlement occurred in New York). If settlement is not
completed on the intended value date (i.e., the trade fails), the CEDEL or
Euroclear cash debit will be valued instead as of the actual settlement date.
CEDEL participants and Euroclear participants will need to make available
to the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to preposition funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within CEDEL or Euroclear. Under this approach,
they may take on credit exposure to CEDEL or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if CEDEL or Euroclear has extended a line of credit to
them, participants can elect not to preposition funds and allow that credit line
to be drawn upon to finance settlement. Under this procedure, CEDEL participants
or Euroclear participants purchasing beneficial interest in Global Securities
would incur overdraft charges for one day, assuming they cleared the overdraft
when the beneficial interests in the Global Securities were credited to their
accounts. However, interest on the beneficial interests in the Global Securities
would accrue from the value date. Therefore, in many cases the investment income
on the Global Securities earned during that one-day period may substantially
reduce or offset the amount of such overdraft charges, although this result will
depend on each participant's particular cost of funds.
Since the settlement is taking place during New York business hours,
Depository participants can employ their usual procedures for sending a
beneficial interest in Global Securities to Citibank or Morgan for the benefit
of CEDEL participants or Euroclear participants. The sale proceeds will be
available to the Depository seller on the settlement date. Thus, to the
Depository participant a cross-market transaction will settle no differently
than a trade between two Depository participants.
Trading between CEDEL or Euroclear Seller and Depository Purchaser. Due to
time zone differences in their favor, CEDEL and Euroclear participants may
employ their customary procedures for transactions in which the beneficial
interest in the Global Securities to be transferred by the respective clearing
system, through Citibank or Morgan, to a Depository participant. The seller will
send instructions to CEDEL or Euroclear through a participant at least one
business day prior to settlement. In these cases, CEDEL or Euroclear will
instruct Citibank or Morgan, as appropriate, to deliver the beneficial interest
in the Global Securities to the Depository participant's account against
payment. Payment will include interest accrued on the beneficial interests in
the Global Securities from and including the last coupon payment date to and
excluding the settlement date on the basis on which interest is calculated on
the Global Securities. For transactions settling on the 31st of the month,
payment will include interest accrued to and excluding the first day of the
following month. The payment will then be reflected in the account of the CEDEL
or Euroclear participant the following day, and receipt of the cash proceeds in
the CEDEL or Euroclear participant's account would be back-valued to the value
date (which would be the preceding day, when settlement occurred in New York).
Should the CEDEL or Euroclear participant have a line of credit with its
respective clearing system and elect to be in debit in anticipation of receipt
of the sale proceeds in its account, the back-valuation will extinguish any
overdraft charges incurred over that one-day period. If settlement is not
completed on the intended value date (i.e., the trade fails), receipt of the
cash proceeds in the CEDEL or Euroclear participant's account would instead be
valued as of the actual settlement date.
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Finally, day traders that use CEDEL or Euroclear and that purchase
beneficial interests in Global Securities from Depository participants for
credit to CEDEL participants or Euroclear participants should note that these
trades would automatically fail on the sale side unless affirmative action were
taken. At least three techniques should be readily available to eliminate this
potential problem:
(1) borrowing through CEDEL or Euroclear for one day (until the
purchase side of the day trade is reflected in their CEDEL or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(2) borrowing beneficial interests in the Global Securities in the
U.S. from a Depository participant no later than one day prior to
settlement, which would give beneficial interests in the Global Securities
sufficient time to be reflected in the appropriate CEDEL or Euroclear
account in order to settle the sale side of the trade; or
(3) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the Depository participant is
at least one day prior to the value date for the sale to the CEDEL
participant or Euroclear participant.
Although the Depository, CEDEL and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of beneficial interests in Global
Securities among participants of the Depository, CEDEL and Euroclear, they are
under no obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities, directly or
indirectly, through CEDEL or Euroclear (or through the Depository if the holder
has an address outside the U.S.) will be subject to the 30% U.S. withholding tax
that generally applies to payments of interest (including original issue
discount) on registered debt issued by U.S. persons, unless (i) each clearing
system, bank or other financial institution that holds customers' securities in
the ordinary course of its trade or business in the chain of intermediaries
between such beneficial owner and the U.S. entity required to withhold tax
complies with applicable certification requirements, and (ii) such beneficial
owner takes one of the following steps to obtain an exemption or reduced tax
rate:
Exemption for non-U.S. persons (Form W-8). Non-U.S. persons that are
beneficial owners (other than a beneficial owner that owns actually or
constructively 10% or more of the total combined voting power of all
classes of stock of the Corporation entitled to vote or a controlled
foreign corporation that is related to the Corporation through stock
ownership) can obtain a complete exemption from the withholding tax by
filing a properly completed Form W-8 (Certificate of Foreign Status).
Exemption for non-U.S. persons with effectively connected income (Form
4224). A non-U.S. person, including a non-U.S. corporation or bank with a
U.S. branch, that is a beneficial owner and for which the interest income
is effectively connected with its conduct of a trade or business in the
United States, can obtain an exemption from the withholding tax by filing a
properly completed Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
Exemption or reduced rate for non-U.S. persons resident in treaty
countries (Form 1001). Non-U.S. persons that are beneficial owners that
are entitled to the benefits of an income tax treaty with the United States
can obtain an exemption or reduced tax rate (depending on the treaty terms)
by filing a properly completed Form 1001 (Ownership, Exemption or Reduced
Rate Certificate). If the treaty provides only for a reduced rate,
withholding tax will be imposed at that rate unless the filer alternatively
files Form W-8. Form 1001 may be filed by the beneficial owner or his
agent.
Exemption for U.S. persons (Form W-9). U.S. persons can obtain a
complete exemption from the withholding tax by filing a properly completed
Form W-9 (Request for Taxpayer Identification Number and Certification).
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U.S. FEDERAL INCOME TAX REPORTING PROCEDURE
The beneficial owner of the Global Security or, in the case of a Form 1001
or a Form 4224 filer, his agent, files by submitting the appropriate form to the
entity through whom it directly holds the Global Security. For example, if the
beneficial owner is listed directly on the books of Euroclear or CEDEL as the
holder of the Debt Security, the IRS Form must be provided to Euroclear or
CEDEL, as the case may be. Each person through which a Debt Security is held
must submit, on behalf of the beneficial owner, the IRS Form (or in certain
cases a copy thereof) under applicable procedures to the person through which it
holds the Debt Security, until the IRS Form is received by the U.S. person who
would otherwise be required to withhold U.S. federal income tax from interest on
the Debt Security. For example, in the case of Debt Securities held through
Euroclear or CEDEL, the IRS Form (or a copy thereof) must be received by the
U.S. depositary of such clearing agency. Applicable procedures include, if a
beneficial owner of the Debt Security provides an IRS Form W-8 to a securities
clearing organization, bank or other financial institution (a "financial
institution") that holds the Debt Security in the ordinary course of its trade
or business on the owner's behalf, that such financial institution certify to
the person otherwise required to withhold U.S. federal income tax from such
interest, under penalties of perjury, that such statement has been received from
the beneficial owner by it or by a financial institution between it and the
beneficial owner and that it furnish the payor with a copy thereof.
As used in this section on tax documentation requirements, the term "U.S.
person" means (i) a citizen or resident of the United States, (ii) a corporation
or partnership organized in or under the laws of the United States or any State
thereof or (iii) an estate or trust the income of which is includable in gross
income for U.S. tax purposes, regardless of its source.
This summary does not deal with all aspects of U.S. income tax and
withholding that may be relevant to foreign beneficial owners of the Global
Securities, including special categories of foreign investors who may not be
eligible for exemptions from U.S. withholding tax. Investors are advised to
consult their own tax advisors for specific tax advice concerning their holding
and disposing of beneficial interests in the Global Securities. Any additional
requirements, if applicable, will be set forth in the Prospectus Supplement.
LEGAL OPINIONS
The legality of the Securities offered hereby will be passed upon for the
Corporation by Shearman & Sterling, 599 Lexington Avenue, New York, New York
10022, and, if underwriters are utilized, on behalf of such underwriters by such
counsel, which will be named in the Prospectus Supplement, as such underwriters
may select.
EXPERTS
The consolidated statements of condition of the Corporation as of December
31, 1992 and 1991, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1992, and the consolidated statements of condition of
the Bank as of December 31, 1992 and 1991 incorporated by reference in the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1992
have been incorporated herein by reference in reliance upon the report of KPMG
Peat Marwick, independent certified public accountants, incorporated herein by
reference, and upon the authority of said firm as experts in accounting and
auditing.
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION OR ANY AGENT OR THE UNDERWRITERS. THIS PROSPECTUS AND THE
ACCOMPANYING PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Republic New York Corporation.......... S-2
Application of Proceeds................ S-2
Summary Financial Information.......... S-3
Certain Terms of the Depositary
Shares............................... S-4
Certain Terms of the Preferred Stock... S-4
Taxation............................... S-9
Underwriting........................... S-10
Legal Opinions......................... S-10
PROSPECTUS
(Selected Provisions)
Incorporation of Certain Documents by
Reference............................ 2
Available Information.................. 2
Republic New York Corporation.......... 3
Application of Proceeds................ 7
Description of Preferred Stock......... 30
Description of Depositary Shares....... 35
Description of the Corporation's
Outstanding Capital Stock............ 43
Plan of Distribution................... 45
Legal Opinions......................... 50
Experts................................ 50
</TABLE>
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REPUBLIC NEW YORK
CORPORATION
[LOGO]
6,000,000 DEPOSITARY SHARES
EACH REPRESENTING A ONE-FOURTH INTEREST IN A SHARE OF ADJUSTABLE RATE CUMULATIVE
PREFERRED STOCK, SERIES D
($100 STATED VALUE)
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PROSPECTUS SUPPLEMENT
MAY 16, 1994
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LEHMAN BROTHERS
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
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