<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 16, 1994
REGISTRATION NO. 33-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
KEYCORP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 34-6542451
(I.R.S. EMPLOYER
(STATE OR OTHER JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
127 PUBLIC SQUARE
CLEVELAND, OHIO 44114
(216) 689-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
CARTER B. CHASE, ESQ., EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL, AND SECRETARY
KEYCORP
127 PUBLIC SQUARE
CLEVELAND, OHIO 44114
(216) 689-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
THOMAS C. STEVENS, ESQ. STUART K. FLEISCHMANN, ESQ.
THOMPSON, HINE AND FLORY SHEARMAN & STERLING
1100 NATIONAL CITY BANK BUILDING 599 LEXINGTON AVENUE
CLEVELAND, OHIO 44114 NEW YORK, NEW YORK 10022
(216) 566-5500 (212) 848-4000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
----------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AGGREGATE
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
REGISTERED(1) REGISTERED(2) PER UNIT(3) PRICE(4) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
++ ++ ++
Debt Securities........ + + +
- ------------------------ + + +
Debt Warrants.......... + + +
- ------------------------ + + +
Preferred Stock, with a + + +
par value of $1 each.. + + +
- ------------------------ + + +
Depositary Shares...... + + +
- ------------------------ + + +
Preferred Stock + + +
Warrants.............. ++ $160,600,000 ++ $160,600,000 ++ $55,380
- ------------------------ + + +
Depositary Share + + +
Warrants.............. + + +
- ------------------------ + + +
Common Shares, with a + + +
par value of $1 + + +
each(5)............... + + +
- ------------------------ + + +
Common Share Warrants.. + + +
- ------------------------ + + +
Capital Securities(4).. + + +
++ ++ ++
</TABLE>
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(Footnotes continued on next page)
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<PAGE>
(Continued from previous page)
(1) This Registration Statement also covers contracts which may be issued by
the Registrant 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 covered hereby. In addition, securities registered
hereunder may be sold separately, together, or as units with other
securities registered hereunder.
(2) In no event will the aggregate initial offering price of the Debt
Securities, Debt Warrants, Preferred Stock, Preferred Stock Warrants,
Depositary Shares, Depositary Share Warrants, Common Shares, Common Share
Warrants, and Capital Securities issued under this Registration Statement
and in the case of Warrants for which separate consideration is payable
upon issuance of underlying securities, securities issued upon exercise of
Warrants, exceed $750,000,000 (including those previously registered under
the Securities Act of 1933, as amended (the "Securities Act")) or the
equivalent thereof in one or more foreign currencies or units of one or
more foreign currencies or composite currencies (such as European Currency
Units). The aggregate amount of Common Shares registered hereunder is
further limited to that which is permissible under Rule 415(a)(4) under
the Securities Act. If any securities are issued at an original issue
discount, then additional securities may be issued so long as the
aggregate initial offering price of all such securities, together with the
initial offering price of all other securities registered hereunder or
previously registered under the Securities Act, does not exceed
$750,000,000.
(3) The proposed maximum offering price per unit will be determined from time
to time by the Registrant in connection with the issuance by the
Registrant of the securities registered hereunder or previously registered
under the Securities Act.
(4) No separate consideration will be received for (i) Common Shares or other
Capital Securities (which may consist of Common Shares, Preferred Stock,
or other equity securities acceptable to the Registrant's primary Federal
banking regulator) that are issued upon conversion at the option of a
holder of Debt Securities, Preferred Stock, or Depositary Shares, or (ii)
Capital Securities or other debt securities that are issued upon
conversion at the option of the Corporation of Debt Securities, Preferred
Stock, or Depositary Shares. The proposed maximum aggregate offering price
has been estimated solely for the purpose of computing the registration
fee pursuant to Rule 457 of the Securities Act of 1933.
(5) Includes associated rights (the "Rights") to purchase Common Shares. Until
the occurrence of certain prescribed events, none of which has occurred,
the Rights are not exercisable, are evidenced by the certificates
representing the Common Shares, and will be transferred along with and
only with the Common Shares.
In accordance with Rule 429 under the Securities Act, the Prospectus
included herein is a combined prospectus which also relates to KeyCorp's
Registration Statements on Form S-3, File No. 33-51652 (originally filed under
the name Society Corporation), effective date October 1, 1992, with respect to
debt securities, and File No. 33-39734 (originally filed under the name
Society Corporation), effective date May 22, 1991, with respect to preferred
stock and depositary shares. This Registration Statement, which is a new
Registration Statement on Form S-3, also constitutes a first post-effective
amendment to KeyCorp's Registration Statements on Form S-3, File No. 33-51652
and File No. 33-39734. Each such post-effective amendment shall hereafter
become effective concurrently with the effectiveness of this Registration
Statement and in accordance with Section 8(c) of the Securities Act. The
aggregate amount of securities covered by this Registration Statement and the
other Registration Statements referred to above to which the Prospectus
contained herein relates shall not exceed $750,000,000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED MAY 16, 1994
PROSPECTUS
[LOGO]
DEBT SECURITIES DEBT WARRANTS
PREFERRED STOCK PREFERRED STOCK WARRANTS
DEPOSITARY SHARES DEPOSITARY SHARE WARRANTS
COMMON SHARES COMMON SHARE WARRANTS
CAPITAL SECURITIES
KeyCorp, an Ohio corporation (the "Corporation"), intends to issue from time
to time, either separately or together, (i) one or more series of its unsecured
debt securities, which may be either senior debentures, notes, bonds, and/or
other evidences of indebtedness (the "Senior Debt Securities") or subordinated
debentures, notes, bonds, and/or other evidences of indebtedness which may be
convertible at the option of a holder or the Corporation into Capital
Securities (as described herein) of the Corporation (the "Subordinated Debt
Securities" and, together with the Senior Debt Securities, the "Debt
Securities"), (ii) warrants to purchase Debt Securities (the "Debt Warrants"),
(iii) shares of Preferred Stock, with a par value of $1 each (the "Preferred
Stock") which may be convertible, at the option of the holder, into Common
Shares or any other class or series of Capital Securities of the Corporation or
convertible at the option of the Corporation into Capital Securities or other
debt securities of the Corporation, (iv) shares of Preferred Stock represented
by depositary shares ("Depositary Shares"), (v) warrants to purchase shares of
Preferred Stock (the "Preferred Stock Warrants"), (vi) warrants to purchase
Depositary Shares (the "Depositary Share Warrants"), (vii) Common Shares, with
a par value of $1 each (the "Common Shares"), together with the related rights
to purchase Common Shares (the "Rights"), and (viii) warrants to purchase
Common Shares, together with the Rights, (the "Common Share Warrants," and
together with the Debt Warrants, the Preferred Stock Warrants, and the
Depositary Share Warrants, being collectively referred to herein as the
"Securities Warrants") in amounts, at prices, and on terms to be determined at
the time of the offering. The Debt Securities, Securities Warrants, Preferred
Stock, Depositary Shares, and Common Shares offered hereby, together with the
Capital Securities, 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 $750,000,000 or the equivalent thereof in one or more foreign
currencies or units of one or more foreign currencies or composite 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 particular terms of the Securities offered by any Prospectus
Supplement will be described in the Prospectus Supplement relating to such
Securities (an "Applicable Prospectus Supplement").
The Senior Debt Securities, when issued, will rank equally with all other
unsubordinated and unsecured indebtedness of the Corporation. The Subordinated
Debt Securities will be subordinate to all existing and future Senior
Indebtedness (as defined herein) of the Corporation and, in certain events
involving the insolvency of the Corporation, to Other Senior Obligations (as
defined herein) of the Corporation. See "Description of Debt Securities--
Subordination of Subordinated Debt Securities." The Debt Securities of any
series may be issued with Securities Warrants, and, in the case of the
Subordinated Debt Securities, may be convertible into Capital Securities of the
Corporation. Unless otherwise indicated in a Prospectus Supplement, the
maturity of the Subordinated Debt Securities will be subject to acceleration
only in the event of certain events of bankruptcy, insolvency, or
reorganization of the Corporation or upon receivership of a Major Bank (as
defined herein). See "Description of Debt Securities--Subordination of
Subordinated Debt Securities".
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in a Prospectus Supplement and, among other
things, will include, where applicable, (i) in the case of Debt Securities, the
specific designation, aggregate principal amount, currency, denomination,
maturity, priority, premium, if any, rate of interest (which may be variable or
fixed), time of payment of interest, terms for optional redemption or repayment
by the Corporation or any holder and for sinking fund payments, terms for
conversion, the initial public offering price, any special provisions related
to Debt Securities denominated in a foreign currency or issued as medium-term
notes, original issue discount securities, or with other special terms, and the
designation of any applicable trustee, security registrar, or paying agent,
(ii) in the case of shares of Preferred Stock, the specific title and stated
value, number of shares or fractional interests therein, any dividend,
liquidation, redemption, voting, and other rights, the terms for conversion,
the initial public offering price, and whether such shares are to be issued as
Depositary Shares, and, if so, the fraction of a share to be represented by
each Depositary Share and the designation of the Depositary (as defined
herein), (iii) in the case of Common Shares, the aggregate number of shares
offered and the initial offering price, and (iv) in the case of Securities
Warrants, where applicable, the applicable type and amount of securities
covered thereby, and, where applicable, the aggregate amount, duration,
offering price, exercise price, and detachability.
A 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 WILL BE OBLIGATIONS OF THE CORPORATION, ARE NOT AND WILL NOT
BE 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, THE SAVINGS ASSOCIATION
INSURANCE FUND, OR ANY OTHER GOVERNMENT AGENCY OR INSTRUMENTALITY.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------
The Securities may be sold to underwriters pursuant to the terms of the
offering fixed at the time of sale, directly by the Corporation, or through
dealers or agents designated from time to time by the Corporation, which agents
may be affiliates of the Corporation. Each Prospectus Supplement will set forth
the names of the underwriters, dealers, or agents, if any, and any applicable
fees, commissions, or discounts and the net proceeds to the Corporation from
such sale together with the terms of the offering. 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
Securities Warrants in amounts, at prices, and on terms to be set forth in a
Prospectus Supplement. See "Plan of Distribution."
THE DATE OF THIS PROSPECTUS IS MAY , 1994.
<PAGE>
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements, and other information filed by the Corporation can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's regional offices at The Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade
Center, Thirteenth Floor, New York, New York 10048. Copies of such material can
be obtained by mail from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Certain
securities of the Corporation are listed on the New York Stock Exchange, and
such reports, proxy statements, and other information concerning the
Corporation also may be inspected at the offices of the New York Stock
Exchange, Inc., 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 thereto, the "Registration
Statement") filed by the Corporation with the Commission under the Securities
Act. This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted from this Prospectus
in accordance with the rules and regulations of the Commission. Reference is
made to the Registration Statement and to the exhibits thereto for further
information pertaining to the Corporation and the Securities offered hereby.
The Registration Statement (and exhibits thereto) may be inspected without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and copies thereof may be obtained from the Commission at
prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents and information heretofore filed by the Corporation with the
Commission pursuant to Sections 12 or 13 of the Exchange Act:
1. The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1993;
2. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994 filed on May , 1994;
3. The Corporation's Current Reports on Form 8-K, filed on January 20,
March 16, April 12, and April 20, 1994 (including as exhibits in the case
of the Form 8-K filed on April 20, 1994 (i) Management's Discussion and
Analysis of Financial Condition and Results of Operations; (ii) Report of
Ernst & Young, Independent Auditors; (iii) Consolidated Financial
Statements for the fiscal year ended December 31, 1993; (iv) Notes to
Consolidated Financial Statements; and (v) descriptions of the
Corporation's business (including a discussion of regulatory and
supervisory matters) and properties, all of which reflect old KeyCorp and
Society (as each is defined below), on a combined basis giving effect to
their March 1, 1994 merger);
4. The description of the Corporation's Common Shares and the Rights to
purchase Common Shares contained in the Corporation's Registration
Statement on Form 8-A dated July 31, 1992 as amended by Form 8-A/A filed on
February 25, 1994 under Section 12 of the Exchange Act; and
5. The description of the Corporation's 10% Cumulative Preferred Stock,
Class A (the "10% Cumulative Preferred Stock") and the Depositary Shares
representing one-fifth of one share of 10% Cumulative Preferred Stock
contained in the Corporation's Registration Statement on Form 8-A, filed on
February 23, 1994 under Section 12 of the Exchange Act.
All reports subsequently filed by the Corporation pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act prior to the termination of the
offering of the Securities offered hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
2
<PAGE>
statement contained herein or in a Prospectus Supplement, or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any 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 UPON REQUEST AND WITHOUT CHARGE TO EACH PERSON
TO WHOM THIS PROSPECTUS IS DELIVERED A COPY OF ANY OR ALL OF THE FOREGOING
DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED THEREIN BY REFERENCE).
WRITTEN REQUESTS SHOULD BE DIRECTED TO CARTER B. CHASE, EXECUTIVE VICE
PRESIDENT, GENERAL COUNSEL, AND SECRETARY, KEYCORP, 127 PUBLIC SQUARE,
CLEVELAND, OHIO 44114-1306 (TELEPHONE (216) 689-3000).
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 UNDERWRITER OR AGENT. THIS PROSPECTUS MAY NOT BE USED TO
CONSUMMATE SALES OF THE SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS
SUPPLEMENT. THIS PROSPECTUS AND THE ACCOMPANYING 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 OF THE 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
ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN 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.
UNLESS OTHERWISE INDICATED, CURRENCY AMOUNTS IN THIS PROSPECTUS AND ANY
PROSPECTUS SUPPLEMENT ARE STATED IN U.S. DOLLARS ("$," "DOLLARS," "U.S.
DOLLARS," OR "U.S. $").
3
<PAGE>
THE CORPORATION
On March 1, 1994, KeyCorp ("old KeyCorp"), a New York corporation and a
financial services holding company headquartered in Albany, New York, with
approximately $33 billion in assets at year-end 1993, merged with and into
Society Corporation ("Society"), an Ohio corporation and a financial services
holding company headquartered in Cleveland, Ohio with approximately $27 billion
in assets at year-end 1993, pursuant to an Agreement and Plan of Merger, and a
related Supplemental Agreement to Agreement and Plan of Merger, each dated as
of October 1, 1993, and each as amended. In the merger, Society was the
surviving corporation, but changed its name to KeyCorp (also referred to herein
as the "Corporation"). All financial data of the Corporation set forth in this
Prospectus has been restated to give effect to the merger of old KeyCorp with
and into Society.
The merger of old KeyCorp with and into Society created a financial services
holding company which traces its roots back to 1825, when the first predecessor
of old KeyCorp was organized. The merger of old KeyCorp and Society created the
"new" KeyCorp, a financial services company, which at March 31, 1994, was the
eleventh largest bank holding company in the United States based on its
consolidated assets of approximately $61 billion.
The Corporation is a legal entity separate and distinct from its banking and
other subsidiaries. Accordingly, the right of the Corporation, its
securityholders and its creditors to participate in any distribution of the
assets or earnings of its banking and other subsidiaries is necessarily subject
to the prior claims of the respective creditors of such banking and other
subsidiaries, except to the extent that claims of the Corporation in its
capacity as a creditor of such banking and other subsidiaries may be
recognized.
The address of the Corporation's principal office is 127 Public Square,
Cleveland, Ohio, 44114 and its telephone number is (216) 689-3000.
BANKING SUBSIDIARIES
As a result of the merger of old KeyCorp and Society, KeyCorp provides
banking and other financial services across the country's northern tier and in
Florida through a network of subsidiaries operating 1,276 full-service banking
offices in 13 states, making KeyCorp the fifth largest bank holding company in
terms of domestic branches. KeyCorp's primary banking subsidiaries include
Society National Bank, headquartered in Cleveland, Ohio, the largest bank in
Ohio and one of the nation's major regional banks with $22.6 billion in total
assets and 291 full-service banking offices at March 31, 1994; Key Bank of New
York, headquartered in Albany, New York with $14.1 billion in total assets and
331 full-service banking offices at March 31, 1994; Key Bank of Washington,
headquartered in Tacoma, Washington with $7.1 billion in total assets and 193
full-service banking offices at March 31, 1994; and Society National Bank,
Indiana, headquartered in South Bend, Indiana with $3.2 billion in total assets
and 84 full-service banking offices at March 31, 1994. In addition, the
Corporation operates banking subsidiaries in Alaska, Colorado, Florida, Idaho,
Maine, Michigan, Oregon, Utah, and Wyoming.
The Corporation's banking subsidiaries provide a wide range of banking,
fiduciary and other financial services to their corporate, individual and
institutional customers located throughout the country. In addition to the
customary banking services of accepting funds for deposit and making loans, the
Corporation's banking subsidiaries provide specialized services tailored to
specific markets, including investment management services, personal and
corporate trust services, personal financial services, customer access to money
market and other mutual funds, cash management services, investment banking
services, and international banking services.
OTHER FINANCIAL SERVICE SUBSIDIARIES
In addition to the services provided through its banking offices, KeyCorp
engages in a wide range of other financial services through subsidiaries,
including mortgage banking, investment management, mutual
4
<PAGE>
fund advisory, and trust services. At December 31, 1993, through its banking
and other companies, KeyCorp serviced approximately $27 billion in mortgage
loans, managed approximately $34 billion in assets (excluding corporate trust
assets) in its investment management and trust operations, and, among bank
holding companies, operated the nation's thirteenth largest bank mutual fund
business.
The Corporation engages in the mortgage banking business through KeyCorp
Mortgage Inc., a mortgage banking subsidiary of Key Bank of New York. KeyCorp
Mortgage Inc. engages in the business of originating, servicing, packaging and
selling residential mortgage loans, and, to a lesser extent, servicing
commercial and income property loans in all of the states in which the
Corporation's banks have branch offices (Alaska, Colorado, Idaho, Indiana,
Maine, Michigan, New York, Ohio, Oregon, Utah, Washington and Wyoming) and in
Arizona, California, and New Jersey where the Corporation has no branch
offices.
The Corporation engages in the investment management business through its
bank and trust company subsidiaries as noted above and also through two bank-
owned registered investment adviser subsidiaries owned by Society National
Bank. Through these entities, the Corporation provides investment management
services to institutional and individual clients, including large corporate and
public retirement plans, Taft-Hartley plans, foundations and endowments, and
high net worth individuals. The Corporation's bank and investment management
subsidiaries also serve as investment advisers to the Corporation's proprietary
mutual funds.
Through its nonbanking subsidiaries, the Corporation provides additional
financial services both in and outside of its primary banking markets. These
include personal and corporate trust services, investment management,
reinsurance of credit life and accident and health insurance on loans made by
subsidiary banks, venture capital and small business investment financing
services, equipment lease financing, community development financing, stock
transfer agent, and other financial services. The Corporation is also a
participant in a joint venture with a number of other unaffiliated bank holding
companies in Electronic Payment Services, Inc., which through its subsidiary,
Money Access Service Inc., is the largest processor of automatic teller machine
transactions in the United States. Money Access Service Inc., which is more
commonly known as the MAC (R) network, is available to bank customers
throughout the United States.
5
<PAGE>
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The Corporation's ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred stock dividends are set forth below for
the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
--------------- -----------------------------
1994 1993 1993 1992 1991 1990 1989
------- ------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on
Deposits..................... 5.19x 4.29x 4.15x 3.67x 2.07x 1.57x 1.74x
Including Interest on
Deposits..................... 1.85x 1.71x 1.69x 1.48x 1.18x 1.10x 1.16x
Earnings to Combined Fixed
Charges and Preferred Stock
Dividends:
Excluding Interest on
Deposits..................... 4.81x 3.91x 3.84x 3.31x 1.96x 1.54x 1.71x
Including Interest on
Deposits..................... 1.82x 1.67x 1.66x 1.45x 1.17x 1.10x 1.15x
</TABLE>
For purposes of computing the above ratios, earnings represent consolidated
income before income taxes plus fixed charges. Fixed charges include interest
expense (excluding or including interest on deposits, as the case may be) and
the proportion deemed representative of the interest factor of rental expense,
net of income from subleases. Pre-tax earnings required for preferred stock
dividends were computed using the effective tax rate for the applicable year.
SUPERVISION AND REGULATION
GENERAL
As a bank holding company, the Corporation is subject to the regulation and
supervision of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") under the Bank Holding Company Act of 1956, as amended
(the "BHCA"). Under the BHCA, bank holding companies may not, in general,
directly or indirectly acquire the ownership or control of more than 5% of the
voting shares or substantially all of the assets of any company, including a
bank, without the prior approval of the Federal Reserve Board. In addition,
bank holding companies are generally prohibited under the BHCA from engaging in
nonbanking (i.e. commercial or industrial) activities, subject to certain
exceptions. As a result of the 1993 acquisition of the institution that is now
known as Society First Federal Savings Bank ("Society First Federal"), the
Corporation is also subject to the regulation and supervision of the Office of
Thrift Supervision (the "OTS") as a savings and loan holding company registered
under the Home Owners' Loan Act of 1933, as amended (the "HOLA").
The banking and savings association subsidiaries (collectively, the "banking
subsidiaries" or "subsidiary banks") of the Corporation are subject to
extensive supervision, examination, and regulation by applicable Federal and
state banking agencies. Society National Bank, Society National Bank, Indiana,
and Key Bank USA N.A. are national banking associations with full banking
powers, subject to regulation, supervision, and examination by the Office of
the Comptroller of the Currency (the "OCC"). Two other national banking
subsidiaries of the Corporation operate under charters that limit their banking
powers to trust-related activities. These entities are also subject to the
regulation, supervision, and examination of the OCC, although they are not
regulated as banks for purposes of the BHCA. All of the other banking
subsidiaries of the Corporation, other than Society First Federal, are state-
chartered banks that are subject to supervision, examination, and regulation by
the applicable state banking authority in the state in which each such
institution is chartered. In addition, the Corporation's state-chartered banks
are not members of the Federal Reserve System (and are therefore so-called
"nonmember banks"), and, accordingly, are subject to the regulation,
supervision, and examination of the Federal Deposit Insurance Corporation (the
"FDIC"). Because each of the Corporation's banking subsidiaries is insured by
the FDIC, the FDIC also has regulatory
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and supervisory authority over the banking subsidiaries in that capacity. The
OTS is charged with regulation of Federal savings associations such as Society
First Federal, presently the Corporation's only such institution. Depository
institutions are affected significantly by the actions of the Federal Reserve
Board as it attempts to control the money supply and credit availability in
order to influence the economy. The regulatory regime applicable to bank
holding companies and their subsidiaries is not intended generally for the
protection of investors but is directed toward protecting the interests of
depositors, the FDIC deposit insurance funds, and the U.S. banking system as a
whole.
The Corporation also has nonbanking subsidiaries that are subject to
supervision, regulation, and examination by the Federal Reserve Board, as well
as other applicable regulatory agencies. For example, the Corporation's
insurance subsidiaries are subject to regulation by the insurance regulatory
authorities of the various states, and the Corporation's state chartered trust
company subsidiaries (which are considered nonbanking companies for purposes of
the BHCA) are subject to regulation by state banking authorities. Other
nonbanking subsidiaries are subject to other laws and regulations of both the
Federal government and the various states in which they are authorized to do
business. For example, the Corporation's discount brokerage and investment
adviser subsidiaries are subject to supervision and regulation by the
Commission, the National Association of Securities Dealers, Inc., and state
securities regulators.
The following references to certain statutes and regulations are brief
summaries thereof. The references are not intended to be complete and are
qualified in their entirety by reference to the statutes and regulations
themselves. In addition there are numerous other statutes and regulations not
summarized below that apply to and regulate the operation of the Corporation
and its banking and nonbanking subsidiaries. A change in applicable law or
regulation may have a material effect on the business of the Corporation.
DIVIDEND RESTRICTIONS
The Corporation is a legal entity separate and distinct from its banking and
other subsidiaries. The principal source of cash flow of the Corporation,
including cash flow to pay dividends on the Corporation's common and preferred
shares and debt service on the Corporation's debt, is dividends from its
banking and other subsidiaries. Various Federal and state statutory and
regulatory provisions limit the amount of dividends that may be paid to the
Corporation by its banking subsidiaries without regulatory approval. No such
limits apply to the amount of dividends that may be paid to the Corporation by
its other, nonbanking subsidiaries.
The approval of the OCC is required for the payment of any dividend by a
national bank if the total of all dividends declared by the board of directors
of such bank in any calendar year would exceed the total of (i) the bank's net
profits (as defined and interpreted by regulation) for the current year plus
(ii) the retained net profits (as defined and interpreted by regulation) for
the preceding two years, less any required transfers to surplus or a fund for
the retirement of any preferred stock. In addition, a national bank can pay
dividends only to the extent that retained net profits (including the portion
transferred to surplus) exceed bad debts (as defined and interpreted by
regulation). Three of the Corporation's banking subsidiaries, Society National
Bank, Society National Bank, Indiana, and Key Bank USA N.A., and the
Corporation's trust company subsidiaries which are national banks, are subject
to these restrictions.
The Corporation's state nonmember banks are also subject to various
restrictions on the payment of dividends under state laws. A number of the
Corporation's banking subsidiaries, representing approximately 50% of its
banking assets (other than assets under management for customers) are state
nonmember banks, which are restricted as to the payment of dividends by the
laws and regulations of their respective state chartering authority.
In addition, OTS regulations impose limitations upon all capital
distributions by savings associations. These limitations are applicable only to
Society First Federal.
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In addition, if, in the opinion of the applicable Federal banking agency, a
depository institution under its jurisdiction is engaged in or is about to
engage in an unsafe or unsound practice, which, depending on the financial
condition of the institution, could include the payment of dividends, the
agency may require, after notice and hearing, that such institution cease and
desist from such practice. Also, the Federal Reserve Board, the OCC, the FDIC,
and the OTS have issued policy statements which provide that insured depository
institutions and their holding companies should generally pay dividends only
out of current operating earnings.
Under all of the laws, regulations, and other restrictions applicable to the
Corporation's banking subsidiaries, management estimates that, as of December
31, 1993, the Corporation's banking subsidiaries could have declared dividends
of approximately $535 million in the aggregate, without obtaining prior
regulatory approval.
HOLDING COMPANY STRUCTURE
Transactions Involving Banking Subsidiaries. Transactions involving the
Corporation's banking subsidiaries are subject to Federal Reserve Act
restrictions which limit the transfer of funds from such subsidiaries to the
Corporation and (with certain exceptions) to the Corporation's nonbanking
subsidiaries (together, "affiliates") in so-called "covered transactions," such
as loans and other extensions of credit, investments, or asset purchases.
Unless an exemption applies, each such transaction by a banking subsidiary with
one of its non-banking affiliates is limited in amount to 10% of that banking
subsidiary's capital and surplus and, with respect to all such transfers to
affiliates, in the aggregate, to 20% of that banking subsidiary's capital and
surplus. Furthermore, loans and extensions of credit are required to be secured
in specified amounts. "Covered transactions" also include the acceptance of
securities issued by the banking subsidiary as collateral for a loan and the
issuance of a guarantee, acceptance, or letter of credit for the benefit of the
Corporation or any of its affiliates. In addition, a bank holding company and
its banking subsidiaries are prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit, lease or sale of
property, or furnishing of services.
Source of Strength/Commonly Controlled Banking Subsidiaries. Under Federal
Reserve Board policy, a bank holding company is expected to serve as a source
of financial and managerial strength to each of its subsidiary banks and, under
appropriate circumstances, to commit resources to support each such subsidiary
bank. This support may be required by the Federal Reserve Board at times when
the Corporation may not have the resources to provide it or, for other reasons,
would not otherwise be inclined to provide it. Certain loans by a bank holding
company to any of its subsidiary banks are subordinate in right of payment to
deposits in, and certain other indebtedness of, the subsidiary bank. In
addition, the Crime Control Act of 1990 provides that in the event of a bank
holding company's bankruptcy, any commitment by a bank holding company to a
Federal bank regulatory agency to maintain the capital of a subsidiary bank
will be assumed by the bankruptcy trustee and entitled to a priority of
payment.
Under Federal law, a depository institution, the deposits of which are
insured by the FDIC, can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC in connection with (i) the default of a
commonly controlled FDIC-insured depository institution or (ii) any assistance
provided by the FDIC to a commonly controlled FDIC-insured depository
institution in danger of default (the so-called "cross guaranty" provision).
"Default" is defined under the FDIC's regulations generally as the appointment
of a conservator or receiver and "in danger of default" is defined generally as
the existence of certain conditions indicating that a "default" is likely to
occur in the absence of regulatory assistance.
CAPITAL REQUIREMENTS
The Federal Reserve Board, the FDIC, and the OCC have issued substantially
similar risk-based and leverage capital guidelines for United States banking
organizations. The minimum ratio of total capital to risk-adjusted assets
(including certain off-balance sheet items, such as standby letters of credit)
required by
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the Federal Reserve Board for bank holding companies is currently 8%. At least
one-half of the total capital must be comprised of common equity, retained
earnings, qualifying non-cumulative, perpetual preferred stock, a limited
amount of qualifying cumulative, perpetual preferred stock, and minority
interests in the equity accounts of consolidated subsidiaries, less goodwill
and certain other intangible assets ("Tier I capital"). The remainder may
consist of hybrid capital instruments, perpetual debt, mandatory convertible
debt securities, a limited amount of subordinated debt, other preferred stock,
and a limited amount of loan and lease loss reserves ("Tier II capital"). As of
March 31, 1994, the Corporation's Tier I and total capital to risk-adjusted
assets ratios were 8.91% and 12.34%, respectively.
In addition, the Corporation is subject to guidelines relating to its minimum
leverage ratio (Tier I capital to total consolidated quarterly average assets
less goodwill and certain other intangible assets for the relevant period).
These guidelines provide for a minimum leverage ratio of 3% for bank holding
companies that meet certain specified criteria, such as having the highest
supervisory rating. All other bank holding companies are required to maintain
leverage ratios which are at least 100 to 200 basis points higher (i.e., a
leverage ratio of at least 4% to 5%). Neither the Corporation nor any of its
banking subsidiaries has been advised by its appropriate Federal regulatory
agency of any specific leverage ratio applicable to it. As of March 31, 1994,
the Corporation's Tier I leverage ratio was 6.85%. Federal Reserve Board policy
provides that banking organizations generally, and, in particular, those that
are experiencing internal growth or actively making acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels, without significant reliance on intangible assets.
Furthermore, the guidelines indicate that the Federal Reserve Board will
continue to consider a "tangible Tier I leverage ratio" in evaluating proposals
for expansion or new activities. The tangible Tier I leverage ratio is the
ratio of a banking organization's Tier I capital less all intangible assets to
total consolidated quarterly average assets less all intangible assets. For
purposes of this calculation, purchased mortgage servicing rights are not
considered to be intangible assets. As of March 31, 1994, the Corporation's
tangible Tier I leverage ratio was 6.76%.
Each of the Corporation's banking subsidiaries is also subject to capital
requirements adopted by applicable Federal regulatory agencies which are
substantially similar to those imposed by the Federal Reserve Board on bank
holding companies. These requirements also include minimum Tier I, total
capital and leverage ratios. As of March 31, 1994, each of the Corporation's
banking subsidiaries had capital in excess of all minimum regulatory
requirements.
All of the Federal banking agencies have proposed regulations that would add
an additional capital requirement based upon the amount of an institution's
exposure to interest rate risk. The OTS recently adopted its final rule adding
an interest rate component to its risk-based capital rule. Under the final OTS
rule, a savings association with a greater than "normal" level of interest rate
risk exposure will be subject to a deduction from total capital for purposes of
calculating its risk-based capital ratio. The new OTS rule was effective
January 1, 1994, except for limited provisions which are effective July 1,
1994. The other Federal banking agencies have yet to adopt their final rules on
the interest rate risk component of risk-based capital.
The OCC, the Federal Reserve Board, and the FDIC have proposed amendments to
their respective regulatory capital rules to include in Tier I capital for
purposes of calculating the risk-based and leverage ratios, the net unrealized
changes in the value of securities available for sale. The proposed amendments
are in response to the provisions outlined in Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," which takes effect for fiscal years beginning after
December 15, 1993. This new accounting standard requires, among other things,
that net unrealized holding gains and losses on securities available for sale
be recorded as a component of shareholders' equity with no impact on net
income. If adopted as proposed, the rule could cause the amount of an
institution's Tier I capital to fluctuate, thereby causing the institution's
Tier I, total capital and leverage ratios to be subject to greater volatility.
Effective January 1, 1994, the Corporation adopted SFAS No. 115. As a result of
this accounting change, approximately $4.5 billion of securities were
classified as available for sale at March 31, 1994, and shareholders' equity
was reduced by $22.6 million, representing the unrealized loss on these
securities, net of deferred income taxes.
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SIGNIFICANT AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT
The Federal Deposit Insurance Corporation Improvement Act of 1991, enacted
December 19, 1991, amended several Federal banking statutes, including the
Federal Deposit Insurance Act (the "FDIA"), and, among other things, increased
the FDIC's borrowing authority to resolve bank failures, mandated least-cost
resolutions and prompt regulatory action with regard to undercapitalized
institutions, expanded consumer protection, and mandated increased supervision
of domestic depository institutions and the U.S. operations of foreign
depository institutions. The 1991 amendments to the FDIA required the Federal
banking agencies to promulgate regulations and specify standards in numerous
areas of bank operations, including interest rate exposure, asset growth,
internal controls, credit underwriting, executive officer and director
compensation, real estate construction financing, additional review of capital
standards, interbank liabilities, and other operational and managerial
standards as the agencies determine appropriate. In general, management
believes that these regulations have increased, and may continue to increase,
the cost of and the regulatory burden associated with the banking business.
Prompt Corrective Action. Effective in December 1992, the OCC, the Federal
Reserve Board, the FDIC, and the OTS adopted new regulations to implement the
so-called "prompt corrective action" provisions of the FDIA. The regulations
group FDIC-insured depository institutions into five broad categories based on
their capital ratios. The five categories are "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized," and
"critically undercapitalized," as follows:
. An institution is "well capitalized" if it has a total risk-based capital
ratio (total capital to risk-adjusted assets) of 10% or greater, a Tier I
risk-based capital ratio (Tier I capital to risk-adjusted assets) of 6%
or greater, and a Tier I leverage capital ratio (Tier I capital to
average total assets) of 5% or greater, and it is not subject to a
regulatory order, agreement, or directive to meet and maintain a specific
capital level for any capital measure;
. An institution is "adequately capitalized" if it has a total risk-based
capital ratio of 8% or greater, a Tier I risk-based capital ratio of 4%
or greater, and (generally) a Tier I leverage capital ratio of 4% or
greater, and the institution does not meet the definition of a "well
capitalized" institution;
. An institution is "undercapitalized" if the relevant capital ratios are
less than those specified in the definition of an "adequately
capitalized" institution;
. An institution is "significantly undercapitalized" if it has a total
risk-based capital ratio of less than 6%, a Tier I risk-based capital
ratio of less than 3%, or a Tier I leverage capital ratio of less than
3%; and
. An institution is "critically undercapitalized" if it has a ratio of
tangible equity (as defined in the regulations) to total assets of 2% or
less.
An institution may be downgraded to, or be deemed to be in, a capital
category that is lower than is indicated by its actual capital position if it
is determined to be in an unsafe or unsound condition or if it receives an
unsatisfactory examination rating with respect to certain matters.
The capital-based prompt corrective action provisions of the FDIA and their
implementing regulations apply to FDIC insured depository institutions such as
all of the Corporation's banking subsidiaries, but they are not applicable to
holding companies, such as the Corporation, which control such institutions.
However, both the Federal Reserve Board and the OTS have indicated that, in
regulating holding companies, they will take appropriate action at the holding
company level based on their assessment of the effectiveness of supervisory
actions imposed upon subsidiary depository institutions pursuant to such
provisions and regulations. Although the capital categories defined under the
prompt corrective action regulations are not directly applicable to the
Corporation under existing laws and regulations, based upon its ratios the
Corporation would qualify, and its subsidiary banks do qualify, as well-
capitalized as of December 31, 1993. However, an institution's capital
category, as determined by applying the prompt corrective action provisions
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of the law, may not constitute an accurate representation of the overall
financial condition or prospects of the Corporation or its banking
subsidiaries, and should be considered in conjunction with other available
information regarding the Corporation's financial condition and results of
operations.
The FDIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the institution would thereafter be undercapitalized.
Undercapitalized depository institutions are also subject to restrictions on
borrowing from the Federal Reserve System, increased monitoring by the
appropriate Federal banking agency and limitations on growth, and are required
to submit a capital restoration plan to their primary Federal regulatory
agency. The Federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic
assumptions and is likely to succeed in restoring the institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the
parent holding company with respect to such a guarantee is limited to the
lesser of: (a) an amount equal to 5% of the depository institution's total
assets at the time that it became undercapitalized or (b) the amount which is
necessary (or would have been necessary) to bring the institution into
compliance with all capital standards applicable to it as of the time it failed
to comply with the plan. If a depository institution fails to submit an
acceptable plan, it is treated as if it were significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of additional requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized and requirements to
reduce total assets, and are prohibited from receiving deposits from
correspondent banks. "Critically undercapitalized" institutions are subject to
the appointment of a receiver or conservator.
FDIC Insurance. Under the risk-related insurance assessment system adopted in
final form effective beginning with the January 1, 1994 assessment period, a
bank or savings association is required to pay an annual assessment ranging
from $.23 to $.31 per $100 of deposits based on the institution's risk
classification. The risk classification is based on an assignment of the
institution by the FDIC to one of three capital groups and to one of three
supervisory subgroups. The capital groups are "well capitalized," "adequately
capitalized," and "undercapitalized." The three supervisory subgroups are Group
"A" (for financially solid institutions with only a few minor weaknesses),
Group "B" (for those institutions with weaknesses which, if uncorrected, could
cause substantial deterioration of the institution and increase the risk to the
deposit insurance fund), and Group "C" (for those institutions with a
substantial probability of loss to the fund absent effective corrective
action). For the period commencing on January 1, 1994 through June 30, 1994,
insurance assessments on deposits of all of the Corporation's banking
subsidiaries owned as of December 31, 1993, were paid at the rate of $.23 per
$100 of deposits.
DEPOSITOR PREFERENCE STATUTE
In August 1993, Federal legislation was enacted providing that insured and
uninsured deposits and certain claims for administrative expenses and employee
compensation against an insured depository institution would be afforded a
priority over other general unsecured claims against such an institution,
including Federal funds and letters of credit, in the "liquidation or other
resolution" of such an institution by any receiver. Under this new legislation,
if an insured depository institution fails, insured and uninsured depositors
along with the FDIC will be placed ahead of all unsecured, nondeposit creditors
in order of priority of payment.
IMPLICATIONS OF BEING A SAVINGS AND LOAN HOLDING COMPANY
By reason of its ownership of Society First Federal, the Corporation is a
savings and loan holding company within the meaning of the HOLA. With certain
exceptions, a savings and loan holding company must obtain prior written
approval from the OTS (as well as the Federal Reserve Board, or other Federal
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agencies whose approval may be required, depending upon the structure of the
acquisition transaction) before acquiring control of a savings association or
savings and loan holding company through the acquisition of stock or through a
merger or some other business combination. The HOLA prohibits the OTS from
approving an acquisition by a savings and loan holding company which would
result in the holding company controlling savings associations in more than one
state unless (a) the holding company is authorized to do so by the FDIC as an
emergency acquisition, (b) the holding company controls a savings association
which operated an office in the additional state or states on March 5, 1987, or
(c) the statutes of the state in which the savings association to be acquired
is located specifically permit a savings association chartered by such state to
be acquired by an out-of-state savings association or savings and loan holding
company.
A Federal savings association, however, including one controlled by a savings
and loan holding company, is permitted, subject to certain restrictions, to
branch on a nationwide basis. Thus, a Federal savings association may generally
also acquire the assets and liabilities or the stock of other Federal savings
associations and operate them as branches, whether or not they are located in a
state that would otherwise have permitted the acquiring institution's holding
company to operate a savings association in that state.
CONTROL ACQUISITIONS
The Change in Bank Control Act (the "CBCA") prohibits a "person" (as defined
in the CBCA and the regulations thereunder) or group of persons from acquiring
"control" (as defined in the CBCA and the regulations thereunder) of a bank
holding company unless the Federal Reserve Board has been given 60 days prior
written notice of the proposed acquisition and within that time period the
Federal Reserve Board has not issued a notice disapproving the proposed
acquisition or extending for up to another 30 days the period during which such
a disapproval may be issued. An acquisition may be made prior to the expiration
of the disapproval period if the Federal Reserve Board issues written notice of
its intention not to disapprove the action. Under a rebuttable presumption
established by the Federal Reserve Board, the acquisition of 10% or more of a
class of voting stock of a bank holding company with a class of securities
registered under Section 12 of the Exchange Act, such as the Corporation,
would, under the circumstances set forth in the presumption, constitute the
acquisition of control.
In addition, any "company" (as defined in the CBCA and the regulations
thereunder) is required to obtain the approval of the Federal Reserve Board
under the BHCA before acquiring 25% (5% in the case of an acquiror that is a
bank holding company) or more of the outstanding Common Shares of the
Corporation, or otherwise obtaining control over the Corporation.
USE OF PROCEEDS
Unless otherwise set forth in the Applicable Prospectus Supplement, the
Corporation intends to use the net proceeds from the sale of the Securities for
general corporate purposes, including investments in and advances to the
Corporation's banking and nonbanking subsidiaries, reduction of short-term
borrowings, investments, and financing possible future acquisitions including,
without limitation, the acquisition of banking and nonbanking companies and
financial assets and liabilities.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an Indenture, dated as of
May , 1994, (the "Senior Indenture"), between the Corporation and Bankers
Trust Company, as Trustee. The Subordinated Debt Securities are to be issued
under an Indenture, dated as of May , 1994 (the "Subordinated Indenture"),
also between the Corporation and Bankers Trust Company, as Trustee. Copies of
the Senior Indenture and the Subordinated Indenture have been filed with the
Commission as exhibits to the Registration Statement of which this Prospectus
is a part. The Senior Indenture and the Subordinated Indenture are sometimes
referred
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to collectively herein as the "Indentures". Bankers Trust Company is
hereinafter referred to as the "Senior Trustee" when referring to it in its
capacity as trustee under the Senior Indenture, as the "Subordinated Trustee"
when referring to it in its capacity as trustee under the Subordinated
Indenture, and as the "Trustee" when referring to it in its capacity as trustee
under both of the Indentures. The following summaries of certain provisions of
the Senior Debt Securities, the Subordinated Debt Securities, and the
Indentures do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Debt Securities
and the Indenture applicable to a particular series of Debt Securities (the
"Applicable Indenture"), including the definitions therein of certain terms.
Wherever particular Sections, Articles, or defined terms of the Applicable
Indenture are referred to, it is intended that such Sections, Articles, or
defined terms shall be incorporated herein by reference. Article and Section
references used herein are references to the Applicable Indenture. Capitalized
terms not otherwise defined herein shall have the meaning given to them in the
Applicable Indenture. The following sets forth certain general terms and
provisions of the Debt Securities offered hereby.
GENERAL TERMS
The Indentures provide that the Debt Securities issued thereunder may be
issued without limit as to aggregate principal amount and provide that Debt
Securities may be issued thereunder from time to time in one or more series.
The Senior Debt Securities will rank equally with all other unsecured and
unsubordinated indebtedness of the Corporation which is not accorded a priority
under applicable law. The Subordinated Debt Securities will rank equally with
all other unsecured indebtedness of the Corporation, but, as described below,
will be subordinated in right of payment to the prior payment in full of the
Senior Indebtedness of the Corporation and, in certain events involving the
insolvency of the Corporation, Other Senior Obligations of the Corporation. The
Debt Securities will be unsecured obligations of the Corporation.
Unless otherwise indicated in the Applicable Prospectus Supplement, principal
of (and premium, if any), or interest, if any, on the Debt Securities will be
payable, and the transfer of the Debt Securities will be registrable, at the
office or agency of the Corporation in the Borough of Manhattan, the City of
New York, maintained for such purpose and at any other office or agency
maintained by the Corporation for such purpose, except that, at the option of
the Corporation, interest may be paid by mailing a check to the address of the
person entitled thereto as it appears on the register for the Debt Securities
or by transfer to an account maintained with a bank located in the United
States. (Sections 301, 305, and 1002) Debt Securities of a series may be
issuable solely as Registered Securities, solely as Bearer Securities or as
both Registered Securities and Bearer Securities (both as defined in the
Indentures). Unless otherwise provided in the Applicable Prospectus Supplement,
Debt Securities denominated in U.S. dollars are issuable in denominations of
$1,000 and integral multiples of $1,000 (in the case of Registered Securities)
and in denominations of $5,000 (in the case of Bearer Securities). The
Indentures also provide that Debt Securities of a series may be issuable in
global form, which may be of any denomination. See "Book-Entry Procedures".
Unless otherwise indicated in the Applicable Prospectus Supplement, Bearer
Securities will have interest coupons attached. (Sections 201 and 302) No
service charge will be made for any registration of transfer or exchange of the
Debt Securities, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection therewith.
(Section 305)
The Applicable Prospectus Supplement will describe the following terms of the
Debt Securities offered thereby:
(1) The title of such Debt Securities and whether such Debt Securities
will be Senior Debt Securities or Subordinated Debt Securities.
(2) The aggregate principal amount of such Debt Securities and any limit
on the aggregate principal amount of Debt Securities of such series.
(3) If other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration of the
maturity thereof or the method by which such portion shall be determined.
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(4) The date or dates, or the method by which such date or dates will be
determined or extended, on which the principal of such Debt Securities will
be payable.
(5) The rate or rates at which such Debt Securities will bear interest,
if any, or the method by which such rate or rates will be determined, the
date or dates from which any interest will accrue or the method by which
such date or dates will be determined, the date or dates on which such
interest, if any, will be payable and the regular record date or dates, if
any, for the interest payable on any registered security on any interest
payment date, or the method by which any such date will be determined, and
the basis upon which interest will be calculated if other than that of a
360-day year of twelve 30-day months.
(6) The period or periods within which, the price or prices at which, the
currency or currencies, currency unit or units or composite currency or
currencies in which, and the other terms and conditions upon which, such
Debt Securities may be redeemed in whole or in part at the option of the
Corporation, if the Corporation is to have that option.
(7) The obligation, if any, of the Corporation to redeem, repay, or
purchase such Debt Securities in whole or in part, pursuant to any sinking
fund or analogous provision or at the option of a holder thereof and the
period or periods within which or the date or dates on which, the price or
prices at which, the currency or currencies, currency unit or units or
composite currency or currencies in which and the other terms and
conditions upon which, such Debt Securities will be so redeemed, repaid, or
purchased.
(8) Whether such Debt Securities are to be issuable as Registered
Securities, Bearer Securities, or both, any restrictions applicable to the
offer, sale, or delivery of Bearer Securities and the terms, if any, upon
which Bearer Securities of the series may be exchanged for Registered
Securities of the series and vice versa (if permitted by applicable laws
and regulations), whether such Debt Securities will be issuable initially
in temporary global form, whether any such Debt Securities will be issuable
in permanent global form with or without coupons and, if so, whether
beneficial owners of interests in any such permanent global security may
exchange such interests for Debt Securities of such series and of like
tenor of any authorized form and denomination and the circumstances under
which any such exchanges may occur, if other than in the manner provided in
the Applicable Indenture, and, if Registered Securities are to be issuable
as a global security, the identity of the depository for such Debt
Securities.
(9) If other than U.S. dollars, the currency or currencies, currency unit
or units or composite currency or currencies in which payments of the
principal of (and premium, if any) or interest, if any, on such Debt
Securities will be payable or in which such Debt Securities will be
denominated.
(10) Whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to an index, formula, or other method (which index, formula, or
method may be based on one or more currency or currencies, currency unit or
units or composite currency or currencies, commodities, equity indices, or
other indices) and the manner in which such amounts will be determined.
(11) Whether the Corporation or a holder may elect payment of the
principal of (and premium, if any), or interest, if any, on such Debt
Securities in one or more currency or currencies, currency unit or units or
composite currency or currencies, other than that in which such Debt
Securities are denominated or stated to be payable, the period or periods
within which, and the terms and conditions upon which, such election may be
made, and the time and manner of determining the exchange rate between the
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are denominated or stated to be
payable and the currency or currencies in which such Debt Securities are to
be so payable.
(12) The place or places, if any, other than or in addition to the City
of New York, where the principal of (and premium, if any) or interest, if
any, on such Debt Securities will be payable, where any Registered
Securities may be surrendered for registration of transfer, where Debt
Securities may be surrendered for conversion and where notices or demands
to or upon the Corporation in respect of such Debt Securities and the
Applicable Indenture may be served.
(13) The denomination or denominations in which such Debt Securities will
be issuable, if other than $1,000 or any integral multiple thereof in the
case of Registered Securities and $5,000 or any integral multiple thereof
in the case of Bearer Securities.
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(14) If other than the applicable Trustee, the identity of each Security
Registrar and/or Paying Agent.
(15) The date as of which any Bearer Securities of the series and any
temporary Debt Security issued in global form representing outstanding
Securities of the series will be dated if other than the date of original
issuance of the first Debt Security of the series to be issued.
(16) The applicability, if at all, to such Debt Securities of the
provisions of Article Thirteen of the respective Indenture described under
"Defeasance and Covenant Defeasance" and any provisions in modification of,
in addition to or in lieu of any of the provisions of such Article.
(17) The person to whom any interest on any Registered Security of the
series shall be payable, if other than the person in whose name such
Registered Security (or one or more predecessor securities) is registered
at the close of business on the Regular Record Date for such interest, the
manner in which, or the person to whom, any interest on any Bearer Security
of the series will be payable, if otherwise than upon presentation and
surrender of the coupons appertaining thereto as they severally mature, and
the extent to which, or the manner in which, any interest payable on a
temporary Debt Security issued in global form will be paid in other than in
the manner provided in the applicable Indenture.
(18) If such Debt Securities are to be issuable in definitive form
(whether upon original issue or upon exchange of a temporary Debt Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, the form and/or terms of
such certificates, documents or conditions.
(19) If such Debt Securities will be issuable upon the conversion of
other Securities or upon the exercise of Debt Warrants, the time, manner,
and place for such Debt Securities to be authenticated and delivered.
(20) The provisions, if any, granting special rights to the holders of
such Debt Securities upon the occurrence of such events as may be
specified.
(21) Any deletions from, modifications of or additions to the Events of
Default and in the case of the Subordinated Debt Securities, the Defaults,
or covenants of the Corporation with respect to such Debt Securities,
whether or not such Events of Default, Defaults, or covenants are
consistent with the Events of Default, Defaults, or covenants set forth in
the general provisions of the Applicable Indenture.
(22) The designation of the initial Exchange Rate Agent, if any.
(23) Whether such Subordinated Debt Securities will be convertible into
Capital Securities of the Corporation and, if so, the terms and conditions
upon which such Subordinated Debt Securities will be so convertible.
(24) Any other terms of such Debt Securities not inconsistent with the
provisions of the Applicable Indenture.
The Corporation may be required to pay Additional Amounts, as contemplated by
Section 1004 of each Indenture, to any holder of Debt Securities who is not a
U.S. person (including any modification to the definition of such term as
contained in the Applicable Indenture as originally executed) in respect of
certain taxes, assessments, or governmental charges and, if so, the Corporation
may have the option to redeem such Debt Securities rather than pay such
Additional Amounts (and the terms of any such option) The Indentures provide
that "Additional Amounts" means any additional amounts which are required by
the Debt Securities or by or pursuant to a resolution of the Board of Directors
to be paid by the Corporation in respect of certain taxes imposed on such non-
U.S. persons and which are owing to such holders. If the terms of any series of
Debt Securities provide that the Corporation must pay Additional Amounts in
respect thereof, for purposes of this Prospectus, any reference to the payment
of (or premium, if any, on) or interest, if any, on such Debt Securities will
be deemed to include mention of the payment of Additional Amounts provided for
by the terms of such Debt Securities.
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Debt Securities may provide for an amount less than the entire principal
amount thereof to be payable upon declaration of acceleration of the maturity
thereof ("Original Issue Discount Securities"). (Section 101) Certain Federal
income tax and other considerations pertaining to any such Original Issue
Discount Securities will be described in the Applicable Prospectus Supplement.
The 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 and may also be issued under the Indentures upon
exercise of Debt Warrants issued by the Corporation. See "Description of
Securities Warrants."
Unless otherwise indicated in the Applicable Prospectus Supplement, the
covenants contained in the Indentures and the Debt Securities will not afford
holders protection in the event of a sudden decline in credit rating that might
result from a recapitalization, restructuring, or other highly leveraged
transaction.
BOOK-ENTRY PROCEDURES
Upon issuance, the Debt Securities may be issued in the form of one or more
fully registered global securities (the "Global Securities"). Each such Global
Security will be deposited with, or on behalf of, The Depository Trust Company,
as depository, (the "Depository") and registered in the name of the Depository
or a nominee thereof. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive form, no Global Security may be transferred
except as a whole by the Depository to a nominee of such Depository or by a
nominee of such Depository to such Depository.
The Depository has advised the Corporation as follows: The Depository is a
limited-purpose trust company organized under the Banking Law 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 participating
organizations ("Participants") and to facilitate the clearance and settlement
of 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 which (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 rules applicable to the
Depository and its Participants are on file with the Commission.
Ownership of beneficial interests in the Debt Securities will be limited to
Participants or persons that may hold interests through Participants
("Beneficial Owners"). The Depository has advised the Corporation that upon the
issuance of Global Securities representing the Debt Securities, the Depository
will credit, on its book-entry registration and transfer system, the
Participants' accounts with the respective principal amounts of the Debt
Securities beneficially owned by such Participants. Ownership of beneficial
interests in the Debt Securities represented by such Global Securities will be
shown on, and the transfer of such ownership interests will be effected only
through, records maintained by the Depository (with respect to interests of
Participants) and on the records of Participants (with respect to interests of
Beneficial Owners). The laws of some states may require that certain purchasers
of securities take physical delivery of such securities in definitive form.
Such laws may impair the ability to own, transfer, or pledge beneficial
interests in Debt Securities represented by Global Securities.
So long as the Depository, or its nominee, is the registered owner of a
Global Security, the Depository or its nominee, as the case may be, will be
considered the sole owner or holder of the Debt Securities
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represented by such Global Security for all purposes under the Applicable
Indenture. Except as provided below, Beneficial Owners will not be entitled to
have the Debt Securities represented by Global Securities registered in their
names, will not receive or be entitled to receive physical delivery of the Debt
Securities in definitive form, and will not be considered the owners or holders
thereof under the Applicable Indenture. Accordingly, each Participant must rely
on the procedures of the Depository and, if such person is a Beneficial Owner,
on the procedures of the Participant through which such Beneficial Owner owns
its interest, to exercise any rights of a holder under the Applicable
Indenture. The Corporation understands that under existing industry practices,
in the event that the Corporation requests any action of holders, or a
Beneficial Owner desires to give or take any action which a holder is entitled
to give or take under the Applicable Indenture, the Depository would authorize
the Participants holding the relevant beneficial interests to give or take such
action, and such Participants would authorize Beneficial Owners owning through
such Participants to give or take such action or would otherwise act upon the
instructions of Beneficial Owners holding through them.
Payment of principal of (premium, if any) and interest, if any, owing on Debt
Securities registered in the name of the Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the holder of such
Debt Securities represented by the Global Securities. None of the Corporation,
the Trustee, or any other agent of the Corporation or agent of the Trustee will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests or for
supervising or reviewing any records relating to such beneficial ownership
interests. The Corporation expects that the Depository, upon receipt of any
payment of principal, premium, if any, or interest in respect of Debt
Securities represented by Global Securities, will credit the accounts of the
Participants with payment in amounts proportionate to their respective
beneficial interests in the Debt Securities represented by such Global
Securities as shown on the records of the Depository. The Corporation also
expects that payments by Participants to Beneficial Owners will be governed by
standing customer instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participants subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal (premium, if any) and interest to the Depository is the
responsibility of the Corporation, disbursement of such payments to
Participants is the responsibility of the Depository, and disbursement of such
payments to the Beneficial Owners is the responsibility of the Participants.
If (a) the Depository notifies the Corporation that it is at any time
unwilling or unable to continue as depository for the Global Securities or the
Depository ceases to be a clearing agency registered under the Exchange Act,
(b) the Corporation executes and delivers to the Trustee an order of the
Corporation to the effect that the Global Securities shall be transferable and
exchangeable, or (c) an Event of Default has occurred and is continuing with
respect to the Debt Securities, or any event which after notice or lapse of
time, or both, would constitute an Event of Default has occurred and is
continuing, the Global Securities will be transferable or exchangeable for Debt
Securities in definitive form of like tenor and of an equal aggregate principal
amount, in denominations of $1,000 and integral multiples thereof. Such
definitive Debt Securities shall be registered in such name or names as the
Depository shall instruct the Trustee. It is expected that such instructions
may be based upon directions received by the Depository from Participants with
respect to ownership of beneficial interests in Debt Securities represented by
such Global Securities.
In the event of an issuance of Global Securities, procedures for initial
settlement and secondary trades will be set forth in the Applicable Prospectus
Supplement.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Applicable Prospectus Supplement, the
following provisions shall apply to the Subordinated Debt Securities and the
Subordinated Indenture.
In 1992 the Federal Reserve Board issued an interpretation of its capital
adequacy regulations, and a clarification of such interpretation (collectively,
the "Interpretation"), that imposed additional restrictions
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on subordinated debt securities in order for such securities to qualify as Tier
II capital and which provided that subordinated debt of bank holding companies
issued on or after September 4, 1992 cannot qualify as Tier II capital unless
the subordination of the debt meets certain criteria, the subordinated debt is
not subject to covenants and other provisions inconsistent with safe and sound
banking practices and the subordinated debt may be accelerated only upon the
bankruptcy of the bank holding company or the receivership of a major banking
subsidiary. See "Supervision and Regulation--Capital Requirements." Since the
Federal Reserve Board issued the Interpretation, the Corporation has not issued
any subordinated debt securities, but in part in response to the
Interpretation, the Corporation and the Subordinated Trustee have entered into
a new Subordinated Indenture to permit the Corporation to issue Subordinated
Debt Securities that would qualify as Tier II capital, subject to the limits
thereon. As of March 31, 1994, all of the Old KeyCorp Subordinated Indebtedness
(as defined below) and the Society Subordinated Indebtedness (as defined
below), which was incurred by old KeyCorp and Society, respectively, prior to
the issuance of the Interpretation, continued to constitute, and be treated by
the Corporation as, Tier II capital.
The Subordinated Debt Securities will be direct unsecured subordinated
obligations of the Corporation and the indebtedness evidenced by the
Subordinated Debt Securities and the payment of the principal of, premium, if
any, and interest, if any, on the Subordinated Debt Securities will be
subordinated in right of payment to the extent described below to the prior
payment in full of all Senior Indebtedness. (Section 1602) In addition, no
payments shall be made by the Corporation on account of the Subordinated Debt
Securities if there shall have occurred and be continuing a default in any
payment with respect to any Senior Indebtedness, or an event of default with
respect to any Senior Indebtedness permitting the holders thereof to accelerate
the maturity thereof, or if any judicial proceeding shall be pending with
respect to any such default or event of default. (Section 1603) In certain
circumstances relating to an insolvency, bankruptcy, reorganization or similar
proceedings of or relating to the Corporation, or any liquidation, dissolution
or winding-up, or any assignment for the benefit of creditors or marshalling of
assets, of the Corporation (an "insolvency event"), the payment of the
principal of, premium, if any, and interest, if any, on the Subordinated Debt
Securities also will be subordinated in right of payment to the extent
described below to the prior payment in full of all Other Senior Obligations
(as defined below). (Section 1614)
The Subordinated Indenture provides that "Senior Indebtedness" shall mean the
principal of (and premium, if any) and interest on (a) all indebtedness of the
Corporation for money borrowed, whether outstanding on the date of execution of
the Subordinated Indenture or thereafter created, assumed, incurred or
guaranteed, except (i) indebtedness on account of all Subordinated Debt
Securities issued under the Subordinated Indenture, indebtedness on account of
all Existing Subordinated Indebtedness (as defined below) and all indebtedness
which specifically by its terms ranks equally with and not prior to the
Subordinated Debt Securities or the Existing Subordinated Indebtedness in right
of payment upon an insolvency event and (ii) indebtedness which specifically by
its terms ranks junior to and not equally with or prior to indebtedness
referred to in clause (i) above in right of payment upon an insolvency event
and (b) any renewals, extensions, modifications and refundings of any such
Senior Indebtedness. The term "indebtedness of the Corporation for money
borrowed" shall mean the principal of (and premium, if any) and interest, if
any, on all indebtedness of the Corporation (including indebtedness of others
guaranteed by the Corporation), whether outstanding on the date of the
Subordinated Indenture or thereafter created, incurred, assumed or guaranteed,
which is for money borrowed. (Section 101) As of March 31, 1994, the
Corporation had outstanding approximately $537.2 million aggregate principal
amount of Senior Indebtedness.
The Subordinated Indenture provides that "Other Senior Obligations" shall
mean any obligation of the Corporation to its creditors, whether outstanding on
the date of execution of the Subordinated Indenture or thereafter created,
assumed, incurred or guaranteed, except (i) Senior Indebtedness, (ii)
indebtedness on account of all Subordinated Debt Securities issued under the
Subordinated Indenture, indebtedness on account of all Existing Subordinated
Indebtedness and all indebtedness which specifically by its terms ranks equally
with and not prior to the Subordinated Debt Securities or the Existing
Subordinated Indebtedness in right of payment upon the happening of an
insolvency event and (iii) indebtedness which specifically by its
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terms ranks junior to and not equally with or prior to indebtedness referred to
in clause (ii) above in right of payment upon any insolvency event. (Section
101) As of March 31, 1994, the Corporation had $297.8 million of Other Senior
Obligations outstanding.
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Indebtedness or Other Senior Obligations, and additional
Senior Indebtedness may include indebtedness of the Corporation for money
borrowed that is senior to the Subordinated Debt Securities, but subordinate to
other obligations of the Corporation. The Senior Debt Securities, if issued,
will constitute Senior Indebtedness.
The Subordinated Indenture provides that "Existing Subordinated Indebtedness"
shall include all indebtedness for borrowed money of the Corporation under its
8.40% Subordinated Capital Notes due April 1, 1999 (originally issued by old
KeyCorp and assumed by the Corporation), 8.125% Subordinated Notes due June 15,
2002 (originally issued by Society), 8.00% Subordinated Notes due July 1, 2004
(also originally issued by old KeyCorp and assumed by the Corporation), Medium-
Term Notes Series IV due 1998, 2000, 2002, and 2003 (originally issued by old
KeyCorp and assumed by the Corporation), and any renewals, extensions,
modifications and refundings of any such indebtedness. All of the Existing
Subordinated Indebtedness originally issued by old KeyCorp and assumed by the
Corporation as a result of the merger on March 1, 1994 is referred to herein as
"Old KeyCorp Subordinated Indebtedness" and all of the Existing Subordinated
Indebtedness originally issued by Society is referred to herein as "Society
Subordinated Indebtedness". (Section 101) As of March 31, 1994, the Corporation
had outstanding $566.7 aggregate principal amount of Existing Subordinated
Indebtedness, which included $365.0 million aggregate principal amount of Old
KeyCorp Subordinated Indebtedness and $200.0 million aggregate principal amount
of Society Subordinated Indebtedness.
The Society Subordinated Indebtedness is subordinated and subject in right of
payment, by its terms, to the prior payment in full of all "senior
indebtedness" (as defined in the indenture relating to the Society Subordinated
Indebtedness, generally, as indebtedness of the Corporation whenever created,
guaranteed, incurred, or assumed, for borrowed money, but excluding the Society
Subordinated Indebtedness and any other indebtedness as to which it is provided
in the instrument evidencing or creating such indebtedness that such
indebtedness is not superior in right of payment to the Society Subordinated
Indebtedness). The Old KeyCorp Subordinated Indebtedness is subordinate and
junior in right of payment, by its terms, to all "senior indebtedness" (as
defined in the indentures relating to the Old KeyCorp Subordinated
Indebtedness, generally, as any obligations of the Corporation to its
creditors, whenever incurred, other than Old KeyCorp Subordinated Indebtedness
and any obligation as to which, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligation is not "senior indebtedness". Because the Old KeyCorp Subordinated
Indebtedness and the Society Subordinated Indebtedness were issued by old
KeyCorp and Society, respectively, prior to the merger of old KeyCorp and
Society, the relationship between the Old KeyCorp Subordinated Indebtedness and
the Society Subordinated Indebtedness is not expressly provided for in the
respective indentures relating to such indebtedness.
The Subordinated Indenture excludes Existing Subordinated Indebtedness from
the definition of Senior Indebtedness and, accordingly, the Subordinated Debt
Securities will not be subordinated in right of payment to Existing
Subordinated Indebtedness. The Subordinated Indenture also provides that the
Subordinated Debt Securities are not superior in right of payment to any of the
Existing Subordinated Indebtedness and do not constitute "senior indebtedness"
as defined in the indentures governing the Society Subordinated Indebtedness
and the Old KeyCorp Subordinated Indebtedness and, accordingly, the
Subordinated Debt Securities will not have the benefit of the subordination
provisions contained in such indentures.
Upon any payment or distribution of assets to creditors upon an insolvency
event relating to the Corporation, the holders of all Senior Indebtedness will
first be entitled to receive payment in full of all amounts due on or in
respect of all Senior Indebtedness before the holders of the Subordinated Debt
Securities will be entitled to receive any payment on account of the principal
of, premium, if any, or interest, if any, on the Subordinated Debt Securities
or before the holders of Existing Subordinated Indebtedness will be entitled
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to receive any payment on account of the principal of and interest on such
Existing Subordinated Indebtedness. In addition, upon any payment or
distribution of assets to creditors upon an insolvency event, the holders of
all Other Senior Obligations will first be entitled to receive payment in full
of all amounts due on or in respect of such Other Senior Obligations before the
holders of the Old KeyCorp Subordinated Indebtedness will be entitled to
receive any payment on account of the principal of and interest on the Old
KeyCorp Subordinated Indebtedness. If upon any such payment or distribution of
assets to creditors, after giving effect to such subordination provisions
applicable to the Subordinated Debt Securities and the Existing Subordinated
Indebtedness in favor of the holders of Senior Indebtedness and also, in the
case of the Old KeyCorp Subordinated Indebtedness, in favor of the holders of
Other Senior Obligations, there remain any amounts of cash, property, or
securities available for payment or distribution in respect of Subordinated
Debt Securities ("Excess Proceeds") and if, at such time, any Entitled Persons
(as defined below) in respect of Other Senior Obligations have not received
payment in full of all amounts due on or in respect of such Other Senior
Obligations, then such Excess Proceeds shall first be applied to pay or provide
for the payment in full of such Other Senior Obligations before any payment or
distribution may be made in respect of the Subordinated Debt Securities.
(Section 1614) "Entitled Persons" means persons who are entitled to payment
pursuant to the terms of Other Senior Obligations. (Section 101)
By reason of the subordination of the Subordinated Debt Securities in favor
of the holders of Senior Indebtedness and Other Senior Obligations, in the
event of a distribution of assets upon an insolvency event involving the
Corporation, the holders of the Subordinated Debt Securities may recover less
than the holders of Senior Indebtedness and the holders of Other Senior
Obligations, and as a result of the differences among the subordination
provisions applicable to the Society Subordinated Indebtedness, the Old KeyCorp
Subordinated Indebtedness and the Subordinated Debt Securities including
differences in the definitions of senior indebtedness in the various
indentures, in an insolvency event involving the Corporation, any distribution
of assets among the holders of Society Subordinated Indebtedness, Old KeyCorp
Subordinated Indebtedness and the Subordinated Debt Securities may not be
ratable.
OWNERSHIP OF VOTING STOCK OF SIGNIFICANT BANKS
The Senior Indenture provides that the Corporation will not sell or otherwise
dispose of, or grant a security interest in, or permit a Significant Bank (as
defined below) to issue, any shares of voting stock of such Significant Bank
(as defined below), unless the Corporation will own free of any security
interest at least 80% of the issued and outstanding voting stock of such
Significant Bank; provided, however, that the foregoing will not apply to (i)
any sale or disposition where the proceeds are invested, within 90 days
thereof, in any subsidiary (including any corporation which upon such
investment becomes a subsidiary) engaged in a banking business or any business
legally permissible for bank holding companies; provided, however, that if the
proceeds are so invested in any subsidiary engaged in a business legally
permissible for bank holding companies other than a banking business, the
Corporation shall be prohibited from selling or otherwise disposing of, or
granting a security interest in, or permitting such subsidiary to issue, any
shares of voting stock of such subsidiary to the same extent as if such
subsidiary were a Significant Bank if, upon making such investment, the assets
of or held for the account of such subsidiary constitutes 10% or more of the
consolidated assets of the Corporation, or (ii) any disposition in exchange for
stock of any bank. (Section 1009) The term "Significant Bank" is defined in the
Senior Indenture as Society National Bank, Key Bank of New York, Key Bank of
Washington and any banking subsidiary of the Corporation the assets of which
constitute 10% or more of the consolidated assets of the Corporation. (Section
101)
The Subordinated Indenture does not contain a similar restriction on the
Corporation's ability to sell or otherwise dispose of or grant a security
interest in, or permit a Significant Bank to issue any shares of voting stock
of any Significant Bank because inclusion of such a provision, under the
Interpretation, would result in the Subordinated Debt Securities issued
thereunder not qualifying as Tier II capital. The holders of Society
Subordinated Indebtedness have the benefit of a covenant in the subordinated
indenture relating thereto substantially similar to the covenant described
above and the holders of Old KeyCorp Subordinated Indebtedness have the benefit
of a covenant in the subordinated indentures relating thereto that restricts
the
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sale, issuance or disposition of shares of stock of, or mergers or asset sales
involving, certain banking subsidiaries. In order to conform to the
Interpretation, the Subordinated Indenture does not contain either such
covenant.
EVENTS OF DEFAULT
The Senior Indenture. The Senior Indenture defines an "Event of Default"
(with respect to any series of Senior Debt Securities) as any one of the
following events: (a) default in the payment of any interest upon any Senior
Debt Security when such interest becomes due and payable, and continuance of
such default for a period of 30 days; (b) default in the payment of the
principal of (or premium, if any, on) any Senior Debt Security when due and
payable at its maturity; (c) failure to deposit any sinking fund payment when
and as due; (d) failure to perform, or default in the performance of, any other
covenants, warranties, or agreements of the Corporation in the Senior Indenture
(other than a covenant or warranty included in the Senior Indenture solely for
the benefit of a series of Senior Debt Securities thereunder other than that
series) continued for a period of 60 days after the holders of at least 25% in
principal amount of the outstanding Senior Debt Securities of such series have
given written notice as provided in the Senior Indenture; (e) acceleration of
any indebtedness for borrowed money in an aggregate principal amount exceeding
$20 million of the Corporation or a Significant Bank if such acceleration is
not annulled within 10 days after written notice is given by at least 25% in
principal amount of the outstanding Senior Debt Securities of such series
requiring the Corporation to cause such acceleration to be annulled as provided
in the Senior Indenture; (f) certain events involving the bankruptcy,
insolvency, or reorganization of the Corporation or the receivership or
conservatorship of any Significant Bank and (g) any other Event of Default with
respect to Senior Debt Securities of that series. (Section 501) Under certain
circumstances not involving a default in the payment of principal of (premium,
if any), or interest, if any, owing on the Senior Debt Securities of any
series, or in the payment of any sinking fund installment, the Senior Trustee
shall be protected in withholding notice to the holders of the Senior Debt
Securities of such series of a default if the Senior Trustee in good faith
determines that the withholding of such notice is in the interests of such
holders and the Senior Trustee shall withhold such notice for certain defaults
for a period of 60 days. (Section 601)
If an Event of Default described in clauses (a), (b), (c), (d), (e), or (g)
above with respect to Senior Debt Securities of any series at the time
outstanding occurs and is continuing, either the Senior Trustee or the holders
of at least 25% in principal amount of the outstanding Senior Debt Securities
of that series may declare the principal amount (or, if the Senior Debt
Securities of that series are Original Issue Discount Debt Securities or
Indexed Securities, such portion of the principal amount as may be specified in
the terms thereof) of all the Senior Debt Securities of that series to be due
and payable immediately. If an Event of Default described in clause (f) above
occurs and is continuing, either the Senior Trustee or the holders of at least
25% in principal amount of all outstanding Senior Debt Securities may declare
the principal amount (or, if the Senior Debt Securities of any series are
Original Issue Discount Debt Securities or Indexed Securities, such portion of
the principal amount as may be specified in the terms thereof) of all the
Senior Debt Securities to be due and payable immediately. At any time after a
declaration of acceleration with respect to Senior Debt Securities of any
series has been made, but before a judgment or decree based on acceleration has
been obtained, the holders of a majority in aggregate principal amount of
outstanding Senior Debt Securities of that series may, under certain
circumstances, rescind and annul such acceleration. (Section 502)
The Subordinated Indenture. The Subordinated Indenture defines an "Event of
Default" (with respect to any series of Subordinated Debt Securities) as
certain (a) events involving the bankruptcy, insolvency, or reorganization of
the Corporation or the receivership of a Major Bank (as defined below) and (b)
any other Event of Default provided with respect to Subordinated Debt
Securities of that series. (Section 501). The term "Major Bank" is defined in
the Subordinated Indenture as any banking subsidiary of the Corporation, the
assets of which constitute 75% or more of the consolidated assets of the
Corporation. As of the date of
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this Prospectus, no banking subsidiary of the Corporation constitutes a Major
Bank. If an Event of Default described in clause (a) above occurs and is
continuing, either the Subordinated Trustee or the holders of not less than 25%
in principal amount of the outstanding Subordinated Debt Securities may declare
the principal amount (or, if the Subordinated Debt Securities of any series are
Original Issue Discount Debt Securities or Indexed Securities, such portion of
the principal amount as may be specified in the terms of that series) of all
Subordinated Debt Securities to be due and payable immediately. If an Event of
Default described in clause (b) above with respect to Subordinated Debt
Securities of any series at the time outstanding occurs and is continuing,
either the Subordinated Trustee or the holders of not less than 25% in
principal amount of the outstanding Subordinated Debt Securities of that series
may declare the principal amount (or, if the Subordinated Debt Securities of
that series are Original Issue Discount Debt Securities or Indexed Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all Subordinated Debt Securities of that series to be due and
payable immediately. At any time after a declaration of acceleration with
respect to Subordinated Debt Securities of any series has been made, but before
a judgment or decree based on the acceleration has been obtained, the holders
of a majority in principal amount of the outstanding Subordinated Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. (Section 502)
Unless otherwise provided in the terms of a series of Subordinated Debt
Securities, there will be no right of acceleration of the payment of principal
of a series of Subordinated Debt Securities upon a default in the payment of
principal of (premium, if any), or interest, if any, owing on, or in the
performance of any covenant or agreement in, the Subordinated Debt Securities
of the particular series, or in the Subordinated Indenture.
In case a Default (as defined below) shall occur and be continuing, the
Subordinated Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the holders of Subordinated Debt Securities by
appropriate judicial proceeding as the Subordinated Trustee deems most
effective. The Subordinated Indenture defines a "Default" (with respect to any
series of Subordinated Debt Securities) as any one of the following events: (a)
an Event of Default; (b) default in the payment of any installment of interest,
if any, on any Subordinated Debt Security when such interest becomes due and
payable, and the continuance of such default for a period of 30 days (whether
or not such payment is prohibited by the subordination provisions); (c) default
in payment of principal of (or premium, if any, on) any Subordinated Debt
Security at its maturity (whether or not such payment is prohibited by the
subordination provisions); (d) failure to deposit any sinking fund payment when
due; (e) failure to perform any other covenants or warranties of the
Corporation in the Subordinated Indenture (other than a covenant or warranty
included in the Subordinated Indenture solely for the benefit of a series of
Subordinated Debt Securities other than that series) continued for a period of
60 days after holders of at least 25% in principal amount of outstanding
Subordinated Debt Securities have given written notice as provided in the
Subordinated Indenture; and (f) any other Default specified in the Subordinated
Indenture with respect to Subordinated Debt Securities of that series. (Section
503) Under certain circumstances not involving a default in the payment of
principal of (premium, if any), or interest, if any, owing on the Subordinated
Debt Securities of any series, or in the payment of any sinking fund
installment, the Subordinated Trustee shall be protected in withholding notice
to the holders of the Subordinated Debt Securities of such series of a default
if the Subordinated Trustee in good faith determines that the withholding of
such notice is in the interests of such holders and the Subordinated Trustee
shall withhold such notice for certain defaults for a period of 60 days.
(Section 601)
In comparison to the Events of Default provided for in the Subordinated
Indenture and the subordinated indenture relating to the Old Key Subordinated
Indebtedness, the holders of Society Subordinated Indebtedness have the benefit
of broader events of default and related acceleration rights in the
subordinated indenture relating thereto, including, without limitation, any one
of the following "events of default" as defined in the subordinated indenture:
(a) default in the payment of any interest upon the Society Subordinated
Indebtedness when such interest becomes due and payable; (b) default in the
payment of principal of (or premium, if any, on) any Society Subordinated
Indebtedness when due and payable at its maturity; (c) default in the
performance, or breach, of any covenant or warranty of the Corporation; and (d)
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acceleration of any indebtedness for borrowed money of the Corporation or a
principal bank (as defined in such subordinated indenture). In order to conform
to the Interpretation, the Subordinated Indenture does not contain any of such
events of default or acceleration rights.
Senior and Subordinated Indentures. Subject to the duty of the Trustee during
default to act with the required standard of care, under both the Senior
Indenture and the Subordinated Indenture, the applicable Trustee will be under
no obligation to exercise any of the rights or powers vested in it by the
Applicable Indenture at the request or direction of any of the holders of Debt
Securities of any series, unless such holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee. (Section 602)
Subject to such provisions for the indemnification of the Trustee and to
certain other conditions, the holders of a majority in aggregate principal
amount of outstanding Senior Debt Securities or outstanding Subordinated Debt
Securities of any series will have the right, subject to certain limitations,
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Senior Trustee or Subordinated Trustee, respectively,
or exercising any trust or power conferred on the Senior Trustee or
Subordinated Trustee, respectively. (Section 512)
No holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Applicable Indenture, or for the appointment
of a receiver or trustee, or for any remedy thereunder, unless such holder
shall have previously given to the Trustee under the Applicable Indenture
written notice of a continuing Event of Default (in the case of Senior Debt
Securities) or a continuing Event of Default or Default (in the case of
Subordinated Debt Securities) and unless the holders of not less than 25% in
principal amount of the outstanding Debt Securities of that series shall have
made written request, and offered security or indemnity reasonably satisfactory
to the Trustee, to such Trustee to institute such proceeding as trustee, and
such Trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of that series a
direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. (Section 507) However, such limitations do not
apply to a suit instituted by a holder of a Debt Security for enforcement of
payment of the principal of (premium, if any,) or subject to certain
conditions, or interest, if any, on or after the respective due dates expressed
in such Debt Security. (Section 508)
The Corporation is required to furnish to the Trustee annually a statement as
to the performance by the Corporation of certain of its obligations under the
Indentures and as to any default in such performance. (Section 1005)
MODIFICATION AND WAIVER
Modifications and amendments of each of the Senior Indenture and the
Subordinated Indenture may be made by the Corporation and the Trustee under the
Applicable Indenture with the consent of the holders of not less than 66 2/3%
in principal amount of the outstanding Debt Securities of each series issued
under such Indenture and affected by the modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
holders of each outstanding Debt Security of the series affected thereby, (1)
change the stated maturity of any principal of (or premium, if any), or any
installment of principal of or interest, if any, on, any Debt Security of such
series; (2) reduce the principal amount of, the rate of interest on, or any
premium payable upon the redemption of any, Debt Security of such series
(including in the case of an Original Issue Discount Debt Security the amount
payable upon acceleration of the maturity thereof); (3) change any obligation
of the Corporation to pay Additional Amounts in respect of any Debt Security of
such series; (4) reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of
the maturity thereof or provable in bankruptcy; (5) adversely affect any right
of repayment at the option of the holder of any Debt Security of such series;
(6) change the place or currency or currencies of payment of principal of or
any premium or interest on any
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Debt Security of such series; (7) impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof or on
or after any Redemption Date or Repayment Date; (8) adversely affect the right
to convert any Debt Security of such series as may be provided pursuant to the
Applicable Indenture; (9) in the case of the Subordinated Indenture, modify the
subordination provisions in a manner adverse to the holders of the Subordinated
Debt Securities of such series; (10) reduce the percentage in principal amount
of the outstanding Debt Securities, the consent of whose holders is required
for modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indentures or for waiver of certain defaults; (11)
reduce the requirements for voting or quorum relating to Bearer Securities; or
(12) modify any of the provisions relating to supplemental indentures requiring
the consent of holders, relating to the waiver of past defaults or relating to
the waiver of certain covenants, except to increase the percentage of such
Outstanding Securities required for such actions or to provide that certain
other provisions of such Indenture cannot be modified or waived without the
consent of the holder of each Outstanding Security affected thereby. (Section
902)
In addition, under the Subordinated Indenture, no modification or amendment
thereof may adversely affect the rights of any holder of Senior Indebtedness or
Other Senior Obligations under Article Sixteen of such Indenture (described
under the caption "Subordination of Subordinated Debt Securities") without the
consent of such holder of Senior Indebtedness or Other Senior Obligations.
(Subordinated Indenture Section 907)
The holders of at least 66 2/3% in aggregate principal amount of the
outstanding Senior Debt Securities of any series or outstanding Subordinated
Debt Securities of any series may, on behalf of all holders of the outstanding
Senior Debt Securities of that series or outstanding Subordinated Debt
Securities of that series, respectively, waive compliance by the Corporation
with certain restrictive provisions of the Applicable Indenture. (Senior
Indenture Section 1010; Subordinated Indenture Section 1009). The holders of
not less than 66 2/3% in aggregate principal amount of the outstanding Senior
Debt Securities of any series or the outstanding Subordinated Debt Securities
of any series may, on behalf of all holders of the outstanding Senior Debt
Securities of that series or the outstanding Subordinated Debt Securities of
that series, respectively, waive any past default under the Applicable
Indenture, except a default in the payment of principal (or premium, if any),
or interest, if any, or in the performance of certain covenants. (Section 513)
SATISFACTION AND DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Corporation may discharge certain obligations to holders of Debt
Securities of a series that have not already been delivered to the applicable
Trustee for cancellation and that either have become due and payable or are by
their terms due and payable within one year (or scheduled for redemption within
one year) by irrevocably depositing with the applicable Trustee, in trust,
funds in an amount sufficient to pay the entire indebtedness on such Debt
Securities for principal (and premium, if any) and interest, with respect
thereto, to the date of such deposit (if such Debt Securities have become due
and payable) or to the Stated Maturity or Redemption Date, as the case may be.
(Section 401)
Each Indenture provides that, if the provisions of Article Thirteen are made
applicable to the Debt Securities of or within a series pursuant to Section 301
thereunder, the Corporation may elect either (i) to defease and be discharged
from any and all obligations with respect to such Debt Securities (except for
the obligations to pay Additional Amounts, if any; to register the transfer or
exchange of such Debt Securities; to replace temporary or mutilated, destroyed,
lost or stolen Debt Securities; to maintain one or more offices or agencies in
respect of such Debt Securities; and to hold moneys for payment in trust)
("defeasance") or (ii) to be released (a) in the case of any such Debt
Securities that are Senior Debt Securities, from its obligations under Section
1009 of such Indenture or (b) in the case of any such Debt Securities (whether
they are Senior Debt Securities or Subordinated Debt Securities), if so
provided in the Applicable Prospectus
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Supplement, from its obligations with respect to any other covenant and, in
the case of either (a) or (b) above, any omission to comply with such
obligations will not constitute a Default or an Event of Default with respect
to such Debt Securities ("covenant defeasance"), in either case upon the
irrevocable deposit by the Corporation with the applicable Trustee (or other
qualifying trustee), in trust, of (1) an amount, in the currency or currencies
in which such Debt Securities are then specified as payable at Stated
Maturity, (2) Government Obligations (as defined in the Indenture) applicable
to such Debt Securities (with such applicability being determined on the basis
of the currency in which such Debt Securities are then specified as payable at
Stated Maturity) that, through the payment of principal and interest in
accordance with their terms, will provide money in an amount, or (3) a
combination thereof in an amount, sufficient to pay the principal of (and
premium, if any, on) and interest, if any, on such Debt Securities, and any
mandatory sinking fund or analogous payments thereon, on the scheduled due
dates therefor.
Such a trust may only be established if, among other things, the Corporation
has delivered to the applicable Trustee an opinion of counsel to the effect
that the holders of such Debt Securities to be defeased will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such defeasance or covenant defeasance had not occurred,
and such opinion of counsel, in the case of defeasance under clause (i) above,
must refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable U.S. federal income tax law occurring after the date of
the Applicable Indenture. (Article Thirteen)
Unless otherwise provided in the Applicable Prospectus Supplement, if, after
the Corporation has deposited funds, Government Obligations, or both to effect
defeasance or covenant defeasance with respect to Debt Securities of a series,
(a) the holder of a Debt Security of such series is entitled to, and does,
elect pursuant to the terms of such Debt Security to receive payment in a
currency or currency unit other than that in which such deposit has been made
in respect of such Debt Security or (b) a Currency Conversion Event (as
defined in the applicable Indenture) occurs, then the indebtedness represented
by such Debt Security will be deemed to have been, and will be, fully
discharged and satisfied through the payment of the principal of (and premium,
if any) and interest, if any, on such Debt Security as they become due out of
the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency in which such Debt Security becomes payable as
a result of such election or such Currency Conversion Event based on the
applicable Market Exchange Rate. (Section 1305) Unless otherwise provided in
the Applicable Prospectus Supplement, all payments of principal of (and
premium, if any) and interest, if any, on any Debt Security that is payable in
a foreign currency with respect to which a Currency Conversion Event occurs
shall be made in U.S. dollars. (Section 312)
In the event the Corporation effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because
of the occurrence of any Event of Default other than the Event of Default
described in clause (d) under "Events of Default" with respect to the
obligations described under "Ownership of Voting Stock of Significant Banks"
above (which obligations would no longer be applicable to such Debt
Securities) or described in clause (d) or (g) under "Events of Default" with
respect to any other covenant with respect to which there has been defeasance,
the amount in such currency in which such Debt Securities are payable, and
Government Obligations on deposit with the applicable Trustee will be
sufficient to pay amounts due on such Debt Securities at the time of their
Stated Maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of
Default. However, the Corporation would remain liable to make payment of such
amounts due at the time of acceleration.
If the applicable Trustee or any Paying Agent is unable to apply any money
in accordance with the applicable Indenture by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Corporation's obligations under such
Indenture and such Debt Securities shall be revived and reinstated as though
no deposit had occurred pursuant to such
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Indenture, until such time as such Trustee or Paying Agent is permitted to
apply all such money in accordance with such Indenture; provided, however,
that, if the Corporation makes any payment of principal of (or premium, if any)
or interest on any such Debt Security or coupon following the reinstatement of
its obligations, the Corporation shall be subrogated to the rights of the
holders of such Debt Securities to receive such payment from the money held by
such Trustee or Paying Agent.
The Applicable Prospectus Supplement may further describe the provisions, if
any, permitting defeasance or covenant defeasance, including any modifications
to the provisions described above, with respect to the Debt Securities of or
within a particular series and any related coupons.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Corporation, without the consent of the holders of any of the Debt
Securities under the Indentures, may consolidate with or merge into any other
corporation, may convey, transfer, or lease its assets substantially as an
entirety to any person, or may acquire or lease the assets of any person
substantially as an entirety, or may permit any person to merge into or
consolidate with the Corporation, provided that: (1) any successor or purchaser
is a corporation organized under the laws of any domestic jurisdiction; (2) any
such successor or purchaser assumes the Corporation's obligations on such Debt
Securities and under the Indentures; (3) after giving effect to the
transaction, with respect to any Senior Debt Securities, no Event of Default
and no event which, after notice of or lapse of time or both would become an
Event of Default or, with respect to any Subordinated Debt Securities, no
Default and no event that, after notice or lapse of time, would become an Event
of Default or a Default, shall have occurred and be continuing; (4) with
respect to the Senior Indenture, if, as a result of any such consolidation or
merger or such conveyance, transfer or lease, shares of voting stock of any
Significant Bank would become subject to a security interest not permitted
under the Senior Indenture, the Corporation or successor, as the case may be,
shall take such steps as shall be necessary effectively to secure the Senior
Debt Securities equally and ratably with (or prior to) all indebtedness secured
thereby; and (5) certain other conditions are met. (Section 801)
CONVERSION
The holders of Subordinated Debt Securities of a specified series that are
convertible into Capital Securities ("Subordinated Convertible Debt
Securities") may be entitled or, if so provided in the Applicable Prospectus
Supplement, may be required at such time or times specified in the Applicable
Prospectus Supplement relating to such Subordinated Convertible Debt
Securities, subject to prior redemption, repayment, or repurchase, to convert
any Subordinated Convertible Debt Securities of such series into Capital
Securities, at the conversion price set forth in such Applicable Prospectus
Supplement, subject to adjustment and to such other terms as are set forth in
such Applicable Prospectus Supplement. No separate consideration will be
received for any Capital Securities issued upon conversion of Subordinated
Convertible Debt Securities.
RISK FACTORS OF DEBT SECURITIES DENOMINATED IN FOREIGN CURRENCIES
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency market, the imposition of
foreign exchange controls, and potential illiquidity in the secondary market.
These risks will vary depending upon the currency involved. These risks may be
more fully described in the Applicable Prospectus Supplement.
CONCERNING THE TRUSTEE
Bankers Trust Company is Trustee under both the Senior Indenture and the
Subordinated Indenture. The Corporation and certain of its subsidiaries
maintain deposit accounts and conduct other banking transactions with Bankers
Trust Company in the ordinary course of business.
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DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the shares of Preferred Stock,
which sets forth certain general terms and provisions of the Preferred Stock to
which any Prospectus Supplement may relate, does not purport to summarize any
particular series of Preferred Stock. Certain terms of any offered series of
Preferred Stock will be described in the Applicable Prospectus Supplement
relating to such series of Preferred Stock. If so indicated in the Applicable
Prospectus Supplement, the terms of any series may differ from the terms set
forth below. The description of certain provisions of the Preferred Stock set
forth below does not purport to be complete and is subject to and qualified in
its entirety by reference to the Amended and Restated Articles of Incorporation
(the "Articles") and the Certificate of Amendment of the Amended and Restated
Articles of Incorporation of the Corporation that relates to a particular
series of Preferred Stock (the "Certificate") which will be filed with the
Secretary of State of the State of Ohio at or prior to the time of the sale of
the related series of Preferred Stock and which will be filed as an exhibit to
or incorporated by reference in the Registration Statement.
GENERAL
The Corporation is authorized by its Articles to issue from time to time up
to 25,000,000 shares of Preferred Stock, with a par value of $1 each. All
shares of Preferred Stock must be of equal rank and the express terms thereof
must be identical, except in respect of the terms that may be fixed by the
Board of Directors as described below, and each share of each series shall be
identical with all other shares of such series, except that in the case of a
series as to which dividends are cumulative, the dates from which dividends are
cumulative may vary to reflect differences in the dates of issue. The Preferred
Stock will, when issued against payment therefor, be fully paid and
nonassessable. The Corporation currently has issued and outstanding 1,280,000
shares of 10% Cumulative Preferred Stock. See "Preferred Stock Outstanding"
below for a discussion of the 10% Cumulative Preferred Stock.
The Board of Directors is authorized by the Articles to cause shares of
Preferred Stock to be issued in one or more series and with respect to each
such series to fix: (1) the designation of the series, which may be by
distinguishing number, letter, or title; (2) the authorized number of shares of
such series, which number the Board of Directors may, except to the extent
otherwise provided in the creation of the series, from time to time, increase
or decrease, but not below the number of shares thereof then outstanding; (3)
the dividend rate or rates (which may be fixed or adjustable) of the shares of
the series; (4) the dates on which dividends, if declared, shall be payable
and, in the case of series on which dividends are cumulative, the dates from
which dividends shall be cumulative; (5) the redemption rights and price or
prices, if any, for shares of the series, (6) the amount, terms, conditions,
and manner of operation of any retirement or sinking fund to be provided for
the purchase or redemption of shares of the series; (7) the amounts payable on
shares of the series in the event of any liquidation, dissolution, or winding
up of the affairs of the Corporation; (8) whether the shares of the series
shall be convertible into Common Shares or shares of any other series or class,
and, if so, the specification of such other class or series, the conversion
price or prices or rate or rates, any adjustment thereof, and all other terms
and conditions upon which such conversion may be made; and (9) the
restrictions, if any, upon the issue of any additional shares of the same
series or of any other class or series. The Board of Directors is authorized to
amend from time to time the Articles fixing, with respect to any unissued
shares of Preferred Stock, the matters described in clauses (1) through (9).
Each series of Preferred Stock will be offered on such of the above terms and
at such offering price as specified in the Applicable Prospectus Supplement.
As described under "Depositary Shares" below, the Corporation may, at its
option, elect to offer Depositary Shares (evidenced by depositary receipts)
which will represent a fraction to be specified in the Applicable Prospectus
Supplement relating to the particular series of Preferred Stock of a share of
the particular series of Preferred Stock issued and deposited with the
Depositary (as defined below), in lieu of offering full shares of such series
of the Preferred Stock.
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CERTAIN DEFINITIONS
For the purposes of this Description of Preferred Stock:
Whenever reference is made to shares "ranking prior to the Preferred Stock,"
such reference shall mean and include all shares of the Corporation in respect
of which the rights of the holders thereof either as to the payment of
dividends or as to distribution in the event of a liquidation, dissolution, or
winding up of the Corporation are given preference over the rights of the
holders of Preferred Stock.
Whenever reference is made to shares "on a parity with the Preferred Stock,"
such reference shall mean and include all shares of the Corporation in respect
of which the rights of the holders thereof as to the payment of dividends or as
to distributions in the event of a liquidation, dissolution, or winding up of
the Corporation rank on an equality or parity with the rights of the holders of
Preferred Stock.
Whenever reference is made to shares "ranking junior to the Preferred Stock,"
such reference shall mean and include all shares of the Corporation in respect
of which the rights of the holders thereof as to the payment of dividends and
as to distributions in the event of a liquidation, dissolution, or winding up
of the Corporation are junior or subordinate to the rights of the holders of
Preferred Stock.
DIVIDENDS
The holders of Preferred Stock of each series, in preference to the holders
of Common Shares and of any other class of shares of the Corporation ranking
junior to the Preferred Stock shall be entitled to receive, out of any funds
legally available for the payment of dividends and when and as declared by the
Board of Directors, cash dividends at the rates set forth in the Applicable
Prospectus Supplement, and no more, payable on the dividend payment dates fixed
for such series set forth therein (each, a "Dividend Payment Date"). If any
date specified as a Dividend Payment Date is not a business day, dividends, if
declared, on the Preferred Stock will be paid on the immediately succeeding
business day, without interest. Such rates may be fixed or variable. If
variable, the formula used for determining the dividend rate for each dividend
period will be set forth in the Applicable Prospectus Supplement. Dividends on
the Preferred Stock may be cumulative or non-cumulative as provided in the
Applicable Prospectus Supplement.
No full dividends may be paid upon, declared, or set apart for the payment of
dividends on shares ranking on a parity with or junior to the Preferred Stock
unless dividends shall have been paid or set apart for payment on the Preferred
Stock.
REDEMPTION
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Corporation or the holder thereof upon terms and at
the redemption prices set forth in the Applicable Prospectus Supplement
relating to such series.
RIGHTS UPON LIQUIDATION
The holders of shares of Preferred Stock of any series shall, in case of
liquidation, dissolution, or winding up of the Corporation, be entitled to
receive in full out of the assets of the Corporation, including its capital,
before any amount shall be paid or distributed among the holders of Common
Shares or any other shares ranking junior to the Preferred Stock, the amounts
set forth in the Applicable Prospectus Supplement with respect to shares of
such series, plus all accrued and unpaid dividends for such series, in
accordance with the terms set forth in the Applicable Prospectus Supplement.
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CONVERSION
The holders of specified series of Preferred Stock may be entitled or, if so
provided in the Applicable Prospectus Supplement, may be required, to convert
such shares into Common Shares or any other class or series of Capital
Securities or, in the case of Preferred Stock that is convertible at the option
of the Corporation, other debt securities of the Corporation, at such
conversion price or prices and on such other terms as may be set forth in the
Applicable Prospectus Supplement relating to such series of Preferred Stock.
VOTING RIGHTS
The holders of Preferred Stock shall not be entitled to vote upon matters
presented to the shareholders, except as provided herein or as required by law.
If the Corporation shall fail to pay full cumulative dividends on any series
of Preferred Stock or the 10% Cumulative Preferred Stock (if then outstanding)
for six quarterly dividend payment periods, whether or not consecutive, the
number of directors will be increased by two, and the holders of all
outstanding series of Preferred Stock and the 10% Cumulative Preferred Stock,
voting as a single class without regard to series, will be entitled to elect
such additional two directors until full cumulative dividends for all past
dividend payment periods on all series of Preferred Stock and the 10%
Cumulative Preferred Stock have been paid or declared and set apart for payment
or until non-cumulative dividends have been paid regularly for at least one
full year. Such right to vote separately as a class to elect directors shall,
when vested, be subject, always, to the same provisions for the vesting of such
right to elect directors separately as a class in the case of future dividend
defaults. At any time when such right to elect directors separately as a class
shall have so vested, the Corporation may, and upon the written request of the
holders of record of not less than twenty percent of the total number of shares
of the Preferred Stock and 10% Cumulative Preferred Stock of the Corporation
then outstanding shall, call a special meeting of shareholders for the election
of such directors. In the case of such a written request, such special meeting
shall be held within ninety days after the delivery of such request and, in
either case, at the place and upon the notice provided by law and in the
Regulations of the Corporation, provided that the Corporation shall not be
required to call such a special meeting if such request is received less than
120 days before the date fixed for the next ensuing annual meeting of
shareholders of the Corporation. Directors elected as aforesaid shall serve
until the next annual meeting of shareholders of the Corporation or until their
respective successors shall be elected and qualify. If, prior to the end of the
term of any director elected as aforesaid, a vacancy in the office of such
director shall occur during the continuance of a default in dividends on any
series of Preferred Stock by reason of death, resignation, or disability, such
vacancy shall be filled for the unexpired term by the appointment by the
remaining director or directors elected as aforesaid of a new director for the
unexpired term of such former director.
Under existing interpretations of the Federal Reserve Board and the OTS, if
the holders of any series of Preferred Stock (including, in this case, the 10%
Cumulative Preferred Stock) become entitled to vote for the election of
directors because dividends on such series are in arrears, 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 such holder otherwise exercises a
"controlling influence" over the Corporation) may then be subject to regulation
as a bank holding company in accordance with the BHCA, and as a savings and
loan holding company in accordance with the HOLA. In addition, at such time,
(i) any bank holding company or foreign bank with a U.S. presence may be
required to obtain the approval of the Federal Reserve Board under the BHCA to
acquire or retain 5% or more of such series and (ii) any person other than a
bank holding company may be required to obtain the approval of the Federal
Reserve Board and the OTS under the CBCA to acquire or retain 10% or more of
such series.
The affirmative vote or consent of the holders of at least two-thirds of the
then outstanding shares of Preferred Stock, given in person or by proxy, either
in writing or at a meeting called for the purpose at which the holders of
Preferred Stock shall vote separately as a class, shall be necessary to effect
any amendment, alteration, or repeal of any of the provisions of the
Corporation's Articles or the Regulations of the
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Corporation which would be substantially prejudicial to the voting powers,
rights, or preferences of the holders of Preferred Stock (but so far as the
holders of Preferred Stock are concerned, such action may be effected with such
vote or consent); provided, however, that neither the amendment of the
Corporation's Articles to authorize or to increase the authorized or
outstanding number of shares of any class ranking junior to or on a parity with
the Preferred Stock, nor the amendment of the Regulations so as to change the
number of directors of the Corporation shall be deemed to be substantially
prejudicial to the voting powers, rights, or preferences of the holders of
Preferred Stock (and any such amendment referred to in this proviso may be made
without the vote or consent of the holders of the Preferred Stock); and
provided further that if such amendment, alteration, or repeal would be
substantially prejudicial to the rights or preferences of one or more but not
all then outstanding series of Preferred Stock, the affirmative vote or consent
of the holders of at least two-thirds of the then outstanding shares of the
series so affected shall be required.
The affirmative vote or consent of the holders of at least two-thirds of the
then outstanding shares of Preferred Stock and, if the holders of 10%
Cumulative Preferred Stock are entitled to vote on such matter pursuant to
Section 5 of Part A of Article IV of the Articles, the 10% Cumulative Preferred
Stock, given in person or by proxy, either in writing or at a meeting called
for the purpose at which the holders of Preferred Stock and, if applicable, 10%
Cumulative Preferred Stock shall vote as a single class shall be necessary to
effect any one or more of the following:
(a) The authorization of, or the increase in the authorized number of,
any shares of any class ranking prior to the Preferred Stock; or
(b) The purchase or redemption for sinking fund purposes or otherwise of
less than all of the then outstanding Preferred Stock except in accordance
with a purchase offer made to all holders of record of Preferred Stock,
unless all dividends on all Preferred Stock then outstanding for all
previous dividend periods shall have been declared and paid or declared and
funds therefor set apart and all accrued sinking fund obligations
applicable thereto shall have been complied with.
PREEMPTIVE RIGHTS
No holder of Preferred Stock is entitled as a matter of right to subscribe
for or purchase any part of any issue of shares of the Corporation, of any
class whatsoever, or any part of any issue of securities convertible into
shares of the Corporation, of any class whatsoever, and whether issued for
cash, property, services, or otherwise.
REPURCHASE OF SHARES
Subject to the express terms of any series of Preferred Stock or the 10%
Cumulative Preferred Stock, the Corporation, by action of its Board of
Directors and without action by its shareholders, is authorized by its Articles
to purchase any shares of any series of Preferred Stock from time to time in
accordance with the provisions of the Ohio General Corporation Law. Such
purchases may be made either in the open market, or at public or private sales,
in such manner and amounts and at such price as the directors shall, from time
to time determine.
PREFERRED STOCK OUTSTANDING
The Corporation has issued and outstanding 1,280,000 shares of the 10%
Cumulative Preferred Stock, which is the only class or series of Preferred
Stock of the Corporation currently outstanding. Dividends, which are
cumulative, are payable on the 10% Cumulative Preferred Stock quarterly on
March 31, June 30, September 30, and December 31 of each year at the rate per
annum equal to 10% of the liquidation preference of $125, or $12.50, per share.
The 10% Cumulative Preferred Stock ranks prior to the Common Shares as to
payment of dividends and upon distribution in the event of a liquidation,
dissolution, or winding up of the Corporation. Unless full cumulative dividends
on the 10% Cumulative Preferred Stock have been paid for all past dividend
payment periods, no dividends (other than in Common Shares or another stock
ranking
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junior to the 10% Cumulative 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 upon the Common Shares or on any other stock of the
Corporation ranking junior to or on a parity with the 10% Cumulative Preferred
Stock as to dividends or upon liquidation. Except as expressly required by
applicable law, the holders of shares of 10% Cumulative Preferred Stock are not
entitled to vote on matters presented to shareholders except under certain
circumstances, including (a) if the Corporation fails to pay full cumulative
dividends on the 10% Cumulative Preferred Stock or on any class of Preferred
Stock for six quarterly dividend periods, whether or not consecutive, in which
case the number of directors of the Corporation will be increased by two and
the holders of all outstanding shares of 10% Cumulative Preferred Stock,
together with the holders of all other outstanding classes of Preferred Stock,
will be entitled to vote separately as a single class without regard to series
to elect such additional two Directors until full cumulative dividends for all
past dividend payment periods on all classes of Preferred Stock and the 10%
Cumulative Preferred Stock have been paid or declared and set apart for
payment, and (b) the adoption of any amendment to the Corporation's Articles
that would adversely affect the powers, preferences, privileges, or rights of
the shares of the 10% Cumulative Preferred Stock, subject to certain
exceptions.
The holders of shares of 10% Cumulative Preferred Stock have no preemptive
rights to acquire any additional shares of the Corporation.
The 10% Cumulative Preferred Stock is not redeemable prior to June 30, 1996.
On and after such date, the 10% Cumulative Preferred Stock will be redeemable
in cash at the option of the Corporation, in whole or in part, from time to
time upon not less than 30 nor more than 60 days' notice, with the prior
approval of the Federal Reserve Board (if such approval is required), at $125
per share plus all accrued and unpaid dividends to the date fixed for
redemption. Shares of the 10% Cumulative Preferred Stock that are redeemed will
be deemed retired.
The 10% Cumulative Preferred Stock is not convertible into shares of any
other class or series of the capital stock of the Corporation.
In the event of any voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation, the holders of shares of 10% Cumulative
Preferred Stock will be entitled to receive out of the assets of the
Corporation available for distribution to shareholders, before any distribution
of assets is made to holders of Common Shares or any other class of stock of
the Corporation ranking junior to the 10% Cumulative Preferred Stock upon
liquidation, liquidating distributions in the amount of $125 per share plus
accrued and unpaid dividends. If, upon any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation the amounts payable
with respect to the 10% Cumulative Preferred Stock and any other shares of
stock of the Corporation ranking as to any such distribution on a parity with
the 10% Cumulative Preferred Stock are not paid in full, the holders of shares
of the 10% Cumulative 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.
The 10% Cumulative Preferred Stock is evidenced by depositary shares, each of
which represents a one-fifth interest in a share of 10% Cumulative Preferred
Stock. The 10% Cumulative Preferred Stock is deposited under a Deposit
Agreement, dated July 27, 1991 between the Corporation and Society National
Bank, successor to The Chase Manhattan Bank, as depositary.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts (as defined below) does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
forms of Deposit
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Agreement and Depositary Receipt relating to each series of the Preferred
Stock, which are filed with the Commission as exhibits to the Registration
Statement of which this Prospectus is a part, copies of which may be obtained
from the Corporation upon request.
GENERAL
The Corporation may elect to offer fractional shares of Preferred Stock
rather than full shares of Preferred Stock. In such event, the Corporation will
cause depositary receipts ("Depositary Receipts") to be issued for Depositary
Shares, each of which will represent a fraction (to be set forth in the
Applicable Prospectus Supplement relating to a particular series of Preferred
Stock) of a share of a particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Corporation and a bank or trust company selected by the Corporation having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000, and any successor as depositary (the
"Depositary"). Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fraction of
a share of Preferred Stock represented by such Depositary Share, to all the
rights, preferences, and privileges of the Preferred Stock represented thereby,
including any and all dividend, voting, redemption, conversion, and liquidation
rights provided for in the Certificate.
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Depositary Receipts will be distributed to
those persons purchasing the fractional shares of Preferred Stock in accordance
with the terms of the offering.
Pending the preparation of definitive Depositary Receipts, the Depositary
will, upon the written order of the Corporation or any holder of Preferred
Stock, execute and deliver temporary Depositary Receipts which are
substantially identical to, and entitle the holders thereof to all the benefits
pertaining to, the definitive Depositary Receipts. Definitive Depositary
Receipts will be prepared thereafter without unreasonable delay, and temporary
Depositary Receipts will be exchangeable for definitive Depositary Receipts
upon surrender of the temporary Depositary Receipts at the Depositary's
principal office or such other office or offices, if any, as the Depositary may
designate, at the Corporation's expense and without charge to the holder.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute cash dividends or other cash distributions
received in respect of the deposited shares of Preferred Stock, including any
cash received upon redemption of any shares of Preferred Stock, to the record
holders of Depositary Receipts relating to such Preferred Stock in such amounts
as are, as nearly as practicable, in proportion to the numbers of Depositary
Shares evidenced by the Depositary Receipts held by such holders.
In the event of a distribution other than in cash on the deposited shares of
Preferred Stock, the Depositary will distribute property received by it to the
record holders of Depositary Receipts in such amounts as are, as nearly as
practicable, in proportion to the numbers of such Depositary Shares evidenced
by the Depositary Receipts held by such holders, in any manner that the
Depositary and the Corporation may deem equitable and practicable for
accomplishing such distribution. If the Depositary, after consultation with the
Corporation, determines that such distribution cannot be made proportionately
or that it is otherwise not feasible to make such distribution, it may, with
the approval of the Corporation, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the
public or private sale of the property received. The Depositary will distribute
or make available for distribution the net proceeds of any such sale to the
holders entitled thereto.
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REDEMPTION OF PREFERRED STOCK
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Corporation or the holder thereof, as set forth in
the Applicable Prospectus Supplement relating to such series of Preferred
Stock. Whenever the Corporation elects to redeem shares of Preferred Stock held
by the Depositary, the Depositary will redeem as of the same redemption date
the number of Depositary Shares representing shares of Preferred Stock so
redeemed, provided the Corporation shall have paid in full to the Depositary
the redemption price of the Preferred Stock to be redeemed. In the event of
such a redemption at the option of the Corporation, the Depositary Shares will
be redeemed from the proceeds received by the Depositary resulting from the
redemption of such Preferred Stock held by the Depositary. If fewer than all
the outstanding Depositary Shares are to be redeemed, the Depositary Shares to
be redeemed will be selected by the Depositary by lot or pro rata or by any
other equitable method, in each case as may be determined by the Corporation.
In addition, although Depositary Shares, as such, are not redeemable at the
option of the holder of Depositary Receipts evidencing Depositary Shares, such
holder may, if so specified in the Applicable Prospectus Supplement relating to
an offering of Depositary Shares, surrender Depositary Receipts with written
instructions to the Depositary to instruct the Corporation to cause the
redemption of any specified number of whole or fractional shares of Preferred
Stock represented by the Depositary Shares evidenced by such Depositary
Receipts. The Corporation will thereafter cause the redemption of the Preferred
Stock at the redemption price utilizing the same procedures as those provided
for delivery of Preferred Stock to effect such redemption.
In the event of redemption at the option of either the Corporation or the
holders of Depositary Receipts, the redemption price per Depositary Share will
be equal to the applicable fraction of the redemption price per share paid in
respect of the shares of the deposited Preferred Stock so redeemed, plus any
other money and other property, if any, represented by each such Depositary
Share, including an amount equal to any accrued and unpaid dividends thereon to
the date of such redemption.
Unless the Corporation defaults in the payment of the redemption price of any
Preferred Stock called for redemption by the Corporation or the holder thereof
and unless otherwise specified in the Certificate, (i) from and after the
redemption date, all dividends in respect of the shares of Preferred Stock
called for redemption will cease to accrue, the Depositary Shares so called for
redemption shall no longer be deemed outstanding, and, except as set forth in
clause (ii) below, all rights of holders of such Depositary Shares shall
terminate except for the right to receive the redemption price thereof, and
(ii) in the case of any redemption at the option of the Corporation or at the
option of the holder, any rights of conversion in respect of such shares of
Preferred Stock shall terminate on the close of business on the redemption
date.
CONVERSION OF PREFERRED STOCK AT THE OPTION OF THE CORPORATION
The holders of Depositary Shares may be obligated at any time or upon
maturity of the Preferred Stock represented by the Depositary Shares to convert
the Depositary Shares for the number of whole shares of Capital Securities or
other debt securities of the Corporation (as the case may be, in accordance
with the terms of such series of Preferred Stock) in proportion to the number
of shares of Preferred Stock represented by the Depositary Shares. Whenever the
Corporation exercises its option to convert shares of Preferred Stock held by
the Depositary in whole or in part, the Depositary will convert as of the same
conversion date the number of Depositary Shares representing shares of
Preferred Stock so converted provided the Corporation shall have issued and
deposited with the Depositary the Capital Securities or other debt securities
for the Preferred Stock to be converted and paid in full to the Depositary any
accrued and unpaid dividends thereon. In the event of such conversion at the
option of the Corporation, the Depositary Shares will be converted at a
conversion rate per Depositary Share equal to the applicable fraction of the
conversion rate per share then in effect in respect of the shares of deposited
Preferred Stock so converted as such conversion rate may be adjusted from time
to time as provided in the Certificate of Amendment, plus any other money and
other
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property, if any, represented by each such Depositary Share, including all
amounts paid by the Corporation in respect of dividends which on the conversion
date have accrued on the shares of Preferred Stock to be so converted and have
not theretofore been paid. If fewer than all the outstanding Depositary Shares
are to be converted, the Depositary Shares to be converted will be selected by
the Depositary by lot or pro rata or by any other equitable method, in each
case as may be determined by the Corporation.
From and after the dated fixed for conversion, all dividends in respect of
the shares of Preferred Stock called for conversion shall cease to accrue to
the extent set forth in the Certificate, any rights of conversion or redemption
at the option of the holders of the Depositary Shares represented by Depositary
Receipts evidencing the shares of Preferred Stock called for conversion shall
terminate at the close of business on such conversion date to the extent set
forth in the Certificate, the Depositary Shares called for conversion will no
longer be deemed to be outstanding, and all rights of the holders of the
Depositary Receipts evidencing the Depositary Shares will cease, except the
right to receive the securities payable upon such conversion and any money and
other property, if any, to which the holders of such Depositary Shares were
entitled upon such conversion upon surrender to the Depositary of the
Depositary Receipts evidencing such Depositary Shares.
CONVERSION OF PREFERRED STOCK AT THE OPTION OF THE HOLDER
The Depositary Shares, as such, are not convertible at the option of the
holder thereof into Common Shares or any other securities or property of the
Corporation. Nevertheless, if so specified in the Applicable Prospectus
Supplement relating to an offering of Depositary Shares, any holder of
Depositary Shares representing any series of Preferred Stock which is
convertible at the option of the holder, upon surrender of the Depositary
Receipts therefor and delivery of instructions to the Depositary, may cause the
Corporation to convert any specified number of shares of Preferred Stock
represented by the Depositary Shares evidenced by such Depositary Receipts into
the number of whole Common Shares or whole number of shares of any other class
or series of Capital Securities of the Corporation (as the case may be, in
accordance with the terms of such series of the Preferred Stock) as are
issuable, as provided in the Certificate upon conversion of such shares of
Preferred Stock at the conversion rate (as such term is defined in the
Certificate) then in effect, as such conversion rate may be adjusted by the
Corporation from time to time as provided in the Certificate. In the event that
a holder delivers Depositary Receipts to the Depositary for conversion which in
the aggregate are convertible either into less than one whole Common Share or
one whole share of any other class or series of Capital Securities or into any
number of whole Common Shares or whole shares of any other class or series of
Capital Securities plus an excess constituting less than one whole Common Share
or one whole share of any other class or series of Capital Securities, the
holder shall receive payment in lieu of such fractional Common Shares or
fractional shares of such Capital Securities.
WITHDRAWAL OF PREFERRED STOCK
Any holder of Depositary Receipts may, upon surrender of such Depositary
Receipts therefor to the Depositary (unless the related Preferred Stock has
previously been called for redemption or conversion at the option of the
Corporation), receive the number of whole shares of the related series of
Preferred Stock and any money and other property represented by such Depositary
Receipts. Holders of Depositary Receipts making such withdrawals will be
entitled to receive whole shares of Preferred Stock on the basis set forth in
the Applicable Prospectus Supplement for such series of Preferred Stock, but
holders of such whole shares of Preferred Stock will not thereafter be entitled
to deposit such Preferred Stock under the Deposit Agreement or to receive
Depositary Shares therefor. If the Depositary Shares represented by the
Depositary Receipts surrendered by the holder in connection with such
withdrawal exceed the number of Depositary Shares that represent the number of
whole shares of Preferred Stock to be withdrawn, the Depositary will deliver to
such holder at the same time a new Depositary Receipt evidencing such excess
number of Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of shares of the
Preferred Stock are entitled to vote, the Depositary will, as soon as
practicable thereafter, mail the information contained in such notice
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of meeting to the record holders of the Depositary Receipts representing the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Receipt on the record date (which will be the same date as the
record date of the Preferred Stock) will be entitled to instruct the Depositary
as to the exercise of the voting rights pertaining to the amount of Preferred
Stock represented by such holder's Depositary Shares. Upon the written request
of a record holder of such Depositary Receipt, the Depositary will, insofar as
practicable, vote or cause to be voted the amount of Preferred Stock
represented by such Depositary Shares evidenced by such Depositary Receipt in
accordance with such instructions, and the Corporation will agree to take all
reasonable actions which may be deemed necessary by the Depositary in order to
enable the Depositary to do so. The Depositary will abstain from voting shares
of the Preferred Stock to the extent it does not receive specific instructions
from the holder of Depositary Receipts evidencing the Depositary Shares
representing such Preferred Stock. The Depositary will not be required to
exercise discretion in voting any Preferred Stock represented by the Depositary
Shares evidenced by such Receipts.
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 and from time to time be
amended by agreement between the Corporation and the Depositary in any respect
that they may deem necessary or desirable. However, any amendment which
materially and adversely alters the rights of the holders of Depositary
Receipts or which would be materially and adversely inconsistent with the
rights granted to the holders of the Preferred Stock will not be effective
unless such amendment has been approved by the holders of at least a majority
of the Depositary Shares then outstanding.
The Deposit Agreement automatically terminates if (i) all outstanding
Depositary Shares have been redeemed, converted, or withdrawn; (ii) each share
of Preferred Stock has been converted into Common Shares or shares of any other
class or series of Capital Securities; or (iii) 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. The
Deposit Agreement also may be terminated by the Corporation at any time upon
not less than 60 days prior written notice to the Depositary, in which case the
Depositary will, upon a date not later than 30 days after the date of such
notice, deliver to the record holders, upon surrender of the Depositary
Receipts, such number of whole shares of Preferred Stock as are represented by
such Depositary Receipts. In the event that such Depositary Receipts represent
a fractional number of shares of Preferred Stock, the Depositary will aggregate
all interests in such fractional shares, and, with the approval of the
Corporation, adopt such method as it deems equitable and practicable for the
purpose of effecting the distribution of such interests, including the public
or private sale of the whole number of shares of Preferred Stock so aggregated,
or any part thereof, after which the Depositary will distribute or make
available for distribution to the holders of such Depositary Receipts, as the
case may be, the net proceeds of any such sale.
CHARGES OF DEPOSITARY AND OTHER TAXES AND CHARGES
The Corporation will pay all fees and expenses of the Depositary, and all
charges of the Depositary in connection with the initial deposit of the
Preferred Stock and the initial issuance of the Depositary Shares evidenced by
the Depositary Receipts, all withdrawals of shares of Preferred Stock by
holders of Depositary Shares, any redemption or conversion of the Preferred
Stock at the option of such holder and any redemption or conversion of the
Preferred Stock at the option of the Corporation. The Corporation will pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements. Holders of Depositary Shares will pay
such other transfer and other taxes and governmental charges as are expressly
provided in the Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Corporation notice
of its election to do so, and the Corporation may at any time remove the
Depositary by notice of such removal delivered to the
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Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and its acceptance of such appointment. Such
successor Depositary must be appointed within 60 days after delivery of the
notice of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Receipts all notices
and reports from the Corporation which are delivered to the Depositary in its
capacity as holder of Preferred Stock and which the Corporation is required to
furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Corporation will be liable to any holder of
any Depositary Receipt if it is prevented or delayed by reason of any present
or future law or regulation of the United States or of any other governmental
authority, or by reason of any present or future provision of the Articles or
the Certificate or by any other circumstance beyond its control in performing
its obligations under the Deposit Agreement or by reason of any exercise of, or
failure to exercise, any discretion provided for in the Deposit Agreement. The
obligations and liabilities of the Corporation to holders of Depositary
Receipts and the Depositary under the Deposit Agreement or any Depositary
Receipt will be limited to performance in good faith of such duties as are
specifically set forth in the Deposit Agreement and the Corporation and the
Depositary will not be obligated to appear in, prosecute, or defend any action,
suit, or other proceeding in respect of deposited shares of Preferred Stock,
Depositary Shares, or Depositary Receipts that in its opinion may subject it to
expense or liability unless satisfactory indemnity is furnished. The Depositary
and the Corporation may rely upon the written advice of counsel and the written
advice of and information provided by any accountant, any holders of Depositary
Receipts and any other persons believed by it in good faith to be competent to
give such advice or information and upon documents believed by it to be genuine
and to have been signed or presented by the proper party or parties.
In the event the 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 Depositary shall be entitled to act on such
claims, requests, or instructions received from the Corporation.
DESCRIPTION OF COMMON SHARES
The description of certain provisions of the Common Shares set forth below
does not purport to be complete and is subject to and qualified in its entirety
by reference to the Articles and the Regulations (i.e. By-Laws) of KeyCorp
which are exhibits to the Registration Statement.
GENERAL
The Corporation's Common Shares as of March 31, 1994 consisted of 900,000,000
authorized shares, with a par value of $1 each, of which there were 244,763,166
shares outstanding (exclusive of treasury shares). The Common Shares are traded
on the New York Stock Exchange. The transfer agent and registrar for the Common
Shares is Society National Bank.
Common Shares of the Corporation may be issued from time to time, in such
amounts and proportion and for such consideration as may be fixed by the Board
of Directors of the Corporation. No holder of Common Shares has any preemptive
or preferential rights to purchase or to subscribe for any shares of capital
stock or other securities which may be issued by the Corporation. The Common
Shares have no redemption or sinking fund provisions applicable thereto. Common
Shares do not have any conversion rights. The rights of holders of Common
Shares will be subject to, and may be adversely affected by, the rights of
holders of any Preferred Stock that may be issued in the future.
The Corporation may issue authorized but unissued Common Shares in connection
with several employee benefit and stock option and incentive plans maintained
by the Corporation or its subsidiaries, and the Corporation's Automatic
Dividend Reinvestment and Cash Payment Plan.
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The outstanding Common Shares are fully paid and non-assessable and future
issuances of Common Shares, when fully paid for, will be non-assessable except
that in both cases Section 1701.95 of the Ohio General Corporation Law provides
that a shareholder who knowingly receives any dividend, distribution, or
payment made contrary to law or the articles of a corporation shall be liable
to the Corporation for the amount received by him that is in excess of the
amount that could have been paid or distributed without violation of law or the
articles.
DIVIDENDS
When, as, and if dividends, payable in cash, stock, or other property, are
declared by the Board of Directors of the Corporation out of funds legally
available therefor, the holders of Common Shares are entitled to share equally,
share for share, in such dividends. The payment of dividends on the Common
Shares is subject to the prior payment of dividends on the Preferred Stock and
on the 10% Cumulative Preferred Stock.
VOTING
Except as described under "Outstanding Preferred Stock" above, holders of
Common Shares have exclusive voting rights of the Corporation and are entitled
to one vote for each share on all matters voted upon by the shareholders.
Holders of Common Shares do not have the right to cumulate their voting power.
LIQUIDATION
In the event of any liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Common Shares
are entitled to receive, on a share for share basis, any assets or funds of the
Corporation which are distributable to its holders of Common Shares upon such
events, subject to the prior rights of creditors of the Corporation and holders
of the Corporation's outstanding Preferred Stock and the 10% Cumulative
Preferred Stock.
SHAREHOLDER RIGHTS PLAN
In August 1989, the Corporation's Board of Directors declared a dividend
consisting of Rights to Purchase Common Shares ("Rights"). One of the Rights
was distributed with respect to each Common Share outstanding on September 12,
1989. Rights have been and will continue to be issued in respect to all Common
Shares that are issued after September 12, 1989 but before the earlier of the
expiration or redemption of the Rights or the occurrence of a Triggering Event
(as defined below), or upon the exercise of any employee stock option granted
prior to a Triggering Event. The description and terms of the Rights are set
forth in the Rights Agreement, dated as of August 25, 1989, between the
Corporation and First Chicago Trust Company of New York, as Rights Agent, as
amended by the First Amendment to Rights Agreement, dated as of February 21,
1991, between the Corporation and the First Chicago Trust Company of New York,
as Rights Agent, a Second Amendment to Rights Agreement, dated as of September
12, 1991, between the Corporation and First Chicago Trust Company of New York,
as Rights Agent, a letter of resignation of First Chicago Trust Company of New
York, dated June 26, 1992, a letter of the Corporation, dated June 26, 1992, to
Ameritrust Texas National Association (now Society National Bank), and a Third
Amendment to Rights Agreement, dated as of October 1, 1993, between the
Corporation and Society National Bank, as Rights Agent (such documents being
hereinafter collectively referred to as "Rights Agreement" which is filed as an
exhibit to the Registration Statement). The Rights are designed to protect the
interests of the Corporation and its shareholders against coercive takeover
tactics. The purpose of the Rights Agreement is to encourage potential
acquirors to negotiate with the Corporation's Board of Directors prior to
attempting a takeover and to give the Board leverage in negotiating on behalf
of all shareholders the terms of any proposed takeover. The Rights Agreement
may, but is not intended to, deter takeover proposals.
Each of the Rights initially represents the right to purchase one Common
Share for $65 (the "Purchase Price"). The Rights will become exercisable 20
days after the earlier of (1) the commencement of a tender offer or exchange
offer that would result in a person or group becoming an Acquiring Person (as
defined below), or (2) a public announcement that a person or group has become
the beneficial owner of 15% or more of the outstanding Common Shares (such
person or group being an "Acquiring Person").
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Until the Rights become exercisable, they will trade with the Common Shares,
and any transfer of Common Shares will also constitute a transfer of the
associated Rights. When the Rights become exercisable, they will begin to trade
separate and apart from the Common Shares. At that time, separate certificates
representing the Rights will be mailed to holders.
Twenty days after certain events occur ("Flip-in Events"), each of the Rights
will become the right to purchase one Common Share for the then par value per
share (now $1.00 per share), and the Rights beneficially owned by an Acquiring
Person will become void. The Flip-in Events are (1) the beneficial ownership by
a person or group of 15% or more of the outstanding Common Shares, unless the
Common Shares are acquired in a tender or exchange offer for all of the Common
Shares at a price and on other terms approved in advance by the Corporation's
Board of Directors, (2) certain self-dealing transactions between the
Corporation and an Acquiring Person, and (3) a reclassification or
recapitalization of the Corporation that has the effect of increasing by more
than 1% the percentage of the Common Shares owned by an Acquiring Person.
If, after a person or group becomes an Acquiring Person, the Corporation is
acquired in a merger or other business combination or 50% or more of its assets
or earning power is sold, each of the Rights will "flip-over" and become the
right to purchase common shares of the acquiror (a "Flip-over Event"). The
holder (other than the Acquiring Person) of each Right would, upon the
occurrence of a Flip-over Event, be entitled to purchase for the then par value
of a Common Share (now $1.00) the number of common shares of the acquiror
having a market price equal to the market price of a Common Share.
The Purchase Price and/or the number of Common Shares (or common shares of an
acquiror) to be purchased upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution in the event the Corporation: (1)
declares a dividend on the Common Shares payable in Common Shares, (2)
subdivides or combines the outstanding Common Shares, (3) issues any shares
other than Common Shares in a reclassification of the Common Shares or (4)
makes a distribution to all holders of Common Shares, of debt securities,
subscription rights, warrants, or other assets (except regular cash dividends).
With certain exceptions, no adjustment will be required until a cumulative
adjustment of at least 1% is required. The Corporation is not required to issue
fractional shares and, instead, may make a cash payment based on the market
price of the Common Shares.
The Corporation's Board of Directors may redeem the Rights for 1/2c each (the
"Redemption Price") at any time before a "Triggering Event" (which is defined
as the occurrence of a Flip-over Event or the 20th day after a Flip-in Event).
However, the Rights may not be redeemed while there exists an Acquiring Person
unless (1) Continuing Directors, as defined below, constitute a majority of the
Board of Directors and (2) a majority of the Continuing Directors approves the
redemption. "Continuing Directors" are defined as directors who were in office
prior to a person or group becoming an Acquiring Person or whose election to
office was recommended by a majority of the Continuing Directors and who are
not affiliated with the Acquiring Person. The Rights will expire on September
12, 1999, unless they are redeemed before that date.
Until the Rights are exercised, the holders of the Rights, as such, will have
no rights as shareholders of the Corporation, including the right to vote or
receive dividends. Upon exercise of the Rights, the holder of the Common Share
received upon the exercise thereof will be entitled to all the rights of any
other holder of Common Shares.
The provisions of the Rights Agreement may be amended by the Corporation's
Board of Directors to cure any ambiguity or correct any defect or inconsistency
or, prior to a Triggering Event, to make other changes that the Board of
Directors deems to be desirable and not adverse to the interests of the
Corporation and its shareholders.
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DESCRIPTION OF CAPITAL SECURITIES
The following description of Capital Securities is included in this
Prospectus because a Prospectus Supplement may provide that Capital Securities
will be issuable upon conversion at the option of the Corporation of a series
of Subordinated Debt Securities or Preferred Stock. Whenever Capital Securities
are so convertible for Subordinated Debt Securities, the Corporation will be
obligated to deliver Capital Securities with a Market Value (as defined below)
equal to the principal amount of such Subordinated Debt Securities. In
addition, the Corporation will unconditionally undertake to sell the Capital
Securities in a sale (the "Secondary Offering") on behalf of any holders who
elect to receive cash for the Capital Securities in which event the Corporation
will bear all expenses of the Secondary Offering, including underwriting
discounts and commissions. There can be no assurance, however, that there will
be a market for the Capital Securities when issued or at any time thereafter.
If the Corporation fails to deliver any Capital Securities when required to be
delivered, the Trustee may institute judicial proceedings for (i) specific
performance, (ii) money damages equal to the principal amount of the
Subordinated Debt Securities for which Capital Securities were to be converted
or (iii) any other proper remedy. If the Corporation fails to effect the
Secondary Offering, it will deliver to the holders Capital Securities and not
cash, upon exchange of the Subordinated Debt Securities. In such event, the
Corporation will have no specifically enforceable obligation to effect the
Secondary Offering, but will not be relieved of any liability for money damages
it would have for breach of its obligation to effect a Secondary Offering of
sufficient amounts of Capital Securities. The "Market Value" of any Capital
Securities means their sale price in the Secondary Offering. If the Corporation
does not effect the Secondary Offering, the Market Value of such Capital
Securities shall be their fair value when exchanged as determined by three
independent nationally recognized investment banking firms selected by the
Corporation.
Whenever Preferred Stock is convertible at the option of the Corporation into
Capital Securities, the Corporation will be obligated to deliver Capital
Securities in an amount either based upon a conversion price or with a required
conversion value. The conversion value will be determined by then market
prices, by an auction or bidding procedure or by such other method as set forth
in the Applicable Prospectus Supplement.
The staff of the Commission has advised that Rules 13e-4 and 14e-1 of the
Commission's rules and regulations relating to tender offers by issuers, as
currently in effect and interpreted, would be applicable to the conversion of
Capital Securities for Subordinated Debt Securities of any series and the
Secondary Offering. If, at the time of the conversion of Capital Securities for
Subordinated Debt Securities of any series and the Secondary Offering, Rule
13e-4 or Rule 14e-1 (or any successor rule or rules) applies to such
transactions, the Corporation will comply with such rule (or any successor rule
or rules) and will afford holders of such Subordinated Securities all rights
and will make all filings required by such rule (or successor rule or rules).
Rule 13e-4 and Rule 14e-1 may also be deemed to apply to Preferred Stock that
is convertible at the option of the Corporation.
The Capital Securities may consist of Common Shares, Perpetual Preferred
Stock (as defined below), or other capital securities of the Corporation
acceptable to its primary federal regulator. All Capital Securities which will
be issuable upon conversion of Subordinated Debt Securities or Preferred Stock
will, upon issuance, be duly authorized, validly issued and, if applicable,
fully paid and non-assessable.
The Corporation may select any preferred stock ("Perpetual Preferred Stock")
that is not convertible at the option of the Corporation, or at the option of
the holder, redeemable or repayable, otherwise than Common Shares or shares of
Perpetual Preferred Stock of another class or series or with the proceeds of
the sale of Common Shares or Perpetual Preferred Stock, as Capital Securities
to be issued upon conversion of Subordinated Debt Securities or Preferred
Stock. Any shares of Perpetual Preferred Stock to be so issued will have such
designations, preferences, dividend, and other rights, qualifications,
limitations, and restrictions as may be determined by the Corporation and
approved by the Board of Directors.
The Corporation may also select any other securities to be issued upon
conversion of Subordinated Debt Securities or Preferred Stock which qualify at
the time of conversion as Capital Securities as determined by the Corporation's
primary federal regulator. Such other Capital Securities will have such terms
as may be determined by the Corporation.
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DESCRIPTION OF SECURITIES WARRANTS
The Corporation may issue, separately or together with any Debt Securities,
Preferred Stock, Common Shares, or Depositary Shares, Securities Warrants for
the purchase of other Debt Securities, Preferred Stock, Common Shares, or
Depositary Shares (collectively, the "Underlying Securities"). The Securities
Warrants will be issued under a warrant agreement (a "Securities Warrant
Agreement") to be entered into between the Corporation and a bank or trust
company, as warrant agent (the "Securities Warrant Agent"), all as set forth in
the Applicable Prospectus Supplement relating to the particular issue of
Securities Warrants. The form of Securities Warrant Agreement, including the
form of certificates representing the Securities Warrants ("Securities Warrant
Certificates"), reflecting the alternative provisions to be included in the
Securities Warrant Agreements that will be entered into with respect to
particular offerings of Securities Warrants, is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Securities Warrant Agreement and the Securities Warrant Certificates, which are
filed as exhibits to the Registration Statement, do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all of
the provisions of the Securities Warrant Agreement and the Securities Warrant
Certificates, respectively, including the definitions therein of certain terms.
Wherever defined terms of the Securities Warrant Agreement are referred to, it
is intended that such defined terms shall be incorporated herein by reference.
GENERAL
The Applicable Prospectus Supplement relating to the particular issue of
Securities Warrants offered thereby will describe the terms of the offered
Securities Warrants, the Securities Warrant Agreement relating to the offered
Securities Warrants, and the Securities Warrant Certificates representing the
offered Securities Warrants, including the following where applicable: (1) if
the Securities Warrants are offered for separate consideration, the offering
price and the currency for which Securities Warrants may be purchased; (2) the
title, aggregate principal amount, currency, and terms of the series of Debt
Securities purchasable upon exercise of the Debt Warrants and the price at
which such Debt Securities may be purchased upon such exercise; (3) the title,
number of shares, stated value, and terms (including, without limitation,
liquidation, dividend, conversion, redemption, and voting rights) of the series
of Preferred Stock purchasable upon exercise of Preferred Stock Warrants and
the price at which such number of shares of Preferred Stock of such series may
be purchased upon such exercise; (4) the number of Common Shares purchasable
upon the exercise of Common Share Warrants and the price at which such number
of Common Shares may be purchased upon such exercise; (5) the number of
Depositary Shares purchasable upon the exercise of Depositary Share Warrants,
the terms of the Preferred Stock which the Depositary Shares represent and the
price at which such number of Depositary Shares may be purchased upon such
exercise; (6) the date, if any, on and after which the offered Securities
Warrants and the related Debt Securities, Preferred Stock, Common Shares and/or
Depositary Shares will be separately transferable; (7) the time or times at
which, or period or periods during which, the offered Securities Warrants may
be exercised and the final date on which the offered Securities Warrants may be
exercised (the "Expiration Date"); (8) a discussion of the specific United
States Federal income tax, accounting, and other considerations applicable to
the Securities Warrants; (9) the location where the offered Securities Warrants
represented by the Securities Warrant Certificates may be transferred and
registered; and (10) any other terms of the offered Securities Warrants.
Securities Warrant Certificates will be exchangeable on the terms specified
in the Applicable Prospectus Supplement for new Securities Warrant Certificates
of different denominations evidencing the same aggregate number of Warrants of
the same title, and may be transferred in whole or in part on the terms
specified in the Applicable Prospectus Supplement.
Prospective purchasers of Securities Warrants should be aware that special
U.S. federal income tax, accounting and other considerations may be applicable
to instruments such as Securities Warrants. The Applicable Prospectus
Supplement relating to any issue of Securities Warrants will describe such
considerations.
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EXERCISE OF WARRANTS
Each Securities Warrant will entitle the holder to purchase the principal
amount of or number of Underlying Securities provided for therein, at such
exercise price as shall in each case be set forth in, or be determinable from,
the Applicable Prospectus Supplement relating to the Securities Warrants, by
payment of such exercise price (the "Warrant Price") in full in the currency
and in the manner specified in the Applicable Prospectus Supplement. Securities
Warrants may be exercised at any time at or before 5:00 P.M., New York City
time on the Expiration Date (or such later date to which such Expiration Date
may be extended by the Corporation), and unexercised Securities Warrants will
become void at such time. Securities Warrants may be exercised at the corporate
trust office of the Securities Warrant Agent or any other office indicated in
the Applicable Prospectus Supplement relating to the Securities Warrants.
Upon receipt at the corporate trust office of the Securities Warrant Agent or
any other office indicated in the Applicable Prospectus Supplement of (i)
payment of the Warrant Price and (ii) the form of election to purchase set
forth on the reverse side of the Securities Warrant Certificate properly
completed and duly executed, the Corporation will, as soon as practicable,
issue the Underlying Securities purchasable upon such exercise. If fewer than
all of the Securities Warrants represented by such Securities Warrant
Certificate are exercised, a new Securities Warrant Certificate will be issued
for the remaining number of unexercised Securities Warrants.
MODIFICATIONS
The Warrant Agreement may be supplemented or amended by the Corporation and
the Warrant Agent from time to time, without the approval of any Holder (as
defined in the Warrant Agreement), in order to cure any ambiguity, to correct
or supplement any defective or inconsistent provision contained therein, or to
make any other provision in regard to matters or questions arising thereunder
that the Corporation and the Warrant Agent may deem necessary or desirable and
which will not adversely affect the interests of the Holders.
The Corporation and the Warrant Agent may also modify or amend the Warrant
Agreement and the Securities Warrant Certificates with the consent of the
Holders of not fewer than a majority in number of the then outstanding
unexercised Warrants affected by such modification or amendment, for any
purpose, provided that no such modification or amendment that shortens the
period of time during which the Warrants may be exercised, or otherwise
materially and adversely affects the exercise rights of the Holders or reduces
the percentage of Holders of outstanding Warrants the consent of which is
required for modification or amendment of the Warrant Agreement or the Warrants
may be made without the consent of each Holder affected thereby.
COMMON SHARE WARRANT ADJUSTMENTS
The terms and conditions on which the Warrant Price of and/or the number of
Common Shares covered by a Warrant to purchase Common Shares (a "Common Share
Warrant") are subject to adjustment will be set forth in the Warrant Agreement
and the Applicable Prospectus Supplement. Such terms will include provisions
for adjusting the Warrant Price and/or the number of Common Shares covered by
such Common Share Warrant; the events requiring such adjustment; the events
upon which the Corporation may, in lieu of making such adjustment, make proper
provision so that the holder of such Common Share Warrant, upon exercise
thereof, would be treated as if such holder had exercised such Common Share
Warrant prior to the occurrence of such events; and provisions affecting
exercise in the event of certain events affecting the Common Shares.
MERGER, CONSOLIDATION, SALE, OR OTHER DISPOSITIONS
If at any time there shall be a merger, consolidation, sale, conveyance,
transfer, lease, or other disposition of substantially all of the assets of the
Corporation, then the successor or assuming corporation shall succeed
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to and be substituted for the Corporation in, and the Corporation will be
relieved of any further obligation under, the Warrant Agreement or the
Warrants.
ENFORCEABILITY OF RIGHTS OF HOLDERS
The Warrant Agent will act solely as an agent of the Corporation in acting
under the Warrant Agreement and in connection with any Warrant Certificate. The
Warrant Agent shall have no duty or responsibility in case of any default by
the Corporation in the performance of its covenants or agreements contained in
the Warrant Agreement or in any Warrant Certificate. Each Holder may, without
the consent of the Warrant Agent, enforce by appropriate legal action, on its
own behalf, the Holder's right to exercise its Warrants in the manner provided
in the Warrant Agreement and its Warrant Certificate.
NO RIGHTS AS HOLDERS OF UNDERLYING SECURITIES
Prior to the exercise of any Securities Warrants to purchase Underlying
Securities, holders of such Securities Warrants will not have any of the rights
of holders of the Underlying Securities purchasable upon such exercise,
including, without limitation, the right to receive the payment of principal
of, or premium on, if any, or interest, if any, dividends or distributions of
any kind, if any, on Underlying Securities, the right to enforce any of the
covenants in the Indentures, if applicable, or the right to exercise any voting
rights.
PLAN OF DISTRIBUTION
The Corporation may sell Securities to one or more underwriters for public or
private offering and sale by them or may sell Securities to investors directly
or through agents (which agents may be affiliates of the Corporation) that
solicit or receive offers on behalf of the Corporation or through dealers or
through a combination of any such methods of sale.
The Applicable Prospectus Supplement will set forth the terms of the offering
of the particular series of Securities to which such Applicable Prospectus
Supplement relates, including (i) the name or names of any underwriters or
agents with whom the Corporation has entered into arrangements with respect to
the sale of such series of Securities, (ii) the initial public offering or
purchase price of such series of Securities, (iii) any underwriting discounts,
commissions, and other items constituting underwriters' compensation from the
Corporation and any other discounts, concessions, or commissions allowed or
reallowed or paid by any underwriters to other dealers, (iv) any commissions
paid to any agents, (v) the net proceeds to the Corporation and (vi) the
securities exchanges, if any, on which such series of Securities will be
listed.
Unless otherwise set forth in the Applicable Prospectus Supplement relating
to a particular series of Securities, the obligations of the underwriters to
purchase such series of Securities will be subject to certain conditions
precedent and each of the underwriters with respect to such series of
Securities will be obligated to purchase all of the Securities of such series
allocated to it if any such Securities 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.
The Securities may be offered and sold by the Corporation directly or through
agents designated by the Corporation from time to time. Unless otherwise
indicated in the Applicable Prospectus Supplement, each such agent will be
acting on a reasonable efforts basis for the period of its appointment. Any
agent participating in the distribution of Securities may be deemed to be an
"underwriter," as that term is defined in the Securities Act, of the Securities
so offered and sold. The Securities also may be sold to dealers at the
applicable price to the public set forth in the Applicable Prospectus
Supplement relating to a particular series of Securities who later resell to
investors. Such dealers may be deemed to be "underwriters" within the meaning
of the Securities Act.
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Underwriters, dealers, and agents may be entitled, under agreements entered
into with the Corporation, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act.
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 Securities Warrants in amounts, at prices and on terms
to be set forth in a Prospectus Supplement.
If so indicated in the Applicable Prospectus Supplement, the Corporation will
authorize underwriters, dealers, or agents to solicit offers by certain
institutions to purchase Securities of a series from the Corporation at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts (each a "Contract") providing for payment and
delivery at a future date. Each Contract will be subject only to those
conditions set forth in the Applicable Prospectus Supplement and the Applicable
Prospectus Supplement will set forth the commission payable for solicitation of
such offers.
Any of the underwriters, dealers, and agents of the Corporation and their
associates may be customers of, engage in transactions with, and 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
Applicable Prospectus Supplement.
LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for the
Corporation, as shall be indicated in the Applicable Prospectus Supplement, by
either the General Counsel or an Associate Counsel to the Corporation or by
Thompson, Hine and Flory, 1100 National City Bank Building, Cleveland, Ohio
44114, and for the Underwriters by Shearman & Sterling, 599 Lexington Avenue,
New York, New York 10022. Shearman & Sterling will rely as to all matters of
Ohio law on the opinion rendered on behalf of the Corporation. The General
Counsel or an Associate Counsel to the Corporation or Thompson, Hine and Flory,
as the case may be, will rely as to all matters of New York law on the opinion
of Shearman & Sterling. As of May 4, 1994, attorneys at Thompson, Hine and
Flory owned an aggregate of approximately 62,412 Common Shares. In the event
that either the General Counsel or an Associate Counsel to the Corporation
renders the opinion on behalf of the Corporation, the aggregate number of
shares owned by such General Counsel or Associate Counsel will be set forth in
the Applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements of old KeyCorp for the year ended
December 31, 1993, contained in and incorporated by reference into the
Corporation's Current Report on Form 8-K, filed March 16, 1994, the
consolidated financial statements of Society for the year ended December 31,
1993, appearing in the Corporation's Form 10-K, which have subsequently been
restated to give effect to the merger of old KeyCorp and Society, the
supplemental consolidated financial statements of KeyCorp for the year ended
December 31, 1993 appearing in the Corporation's Form 10-K, which, upon the
filing of the Corporation's Form 8-K on April 20, 1994, became the consolidated
financial statements of the Corporation and the consolidated financial
statements of the Corporation for the year ended December 31, 1993 contained in
and incorporated by reference into the Corporation's Current Report on Form 8-
K, filed April 20, 1994 (as restated to give effect to the merger of old
KeyCorp and Society), have been audited by Ernst & Young, independent auditors,
as set forth in their reports thereon included therein and incorporated herein
by reference in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses in connection with the issuance and distribution of the
securities being registered other than underwriting compensation are as
follows:
<TABLE>
<S> <C>
SEC Registration Fee............................................ $ 55,380
Fees of Rating Agencies.........................................
Printing and Engraving Expenses................................. 15,000
Legal Fees and Expenses......................................... 125,000
Accounting Fees and Expenses.................................... 20,000
Fees of Indenture Trustees ..................................... 8,000
Transfer Agent and Registrar Fees...............................
Blue Sky Fees and Expenses...................................... 25,000
Stock Exchange Listing Fees.....................................
Miscellaneous...................................................
--------
Total......................................................... $
========
</TABLE>
- --------
All the above amounts except the SEC registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Ohio law, Ohio corporations are authorized to indemnify directors,
officers, employees, and agents within prescribed limits and must indemnify
them under certain circumstances. Ohio law does not provide statutory
authorization for a corporation to indemnify directors, officers, employees,
and agents for settlements, fines, or judgments in the context of derivative
suits. However, it provides that directors (but not officers, employees, and
agents) are entitled to mandatory advancement of expenses, including attorneys'
fees, incurred in defending any action, including derivative actions, brought
against the director, provided the director agrees to cooperate with the
corporation concerning the matter and to repay the amount advanced if it is
proved by clear and convincing evidence that his act or failure to act was done
with deliberate intent to cause injury to the corporation or with reckless
disregard for the corporation's best interests.
Ohio law does not authorize payment of judgments to a director, officer,
employee, or agent after a finding of negligence or misconduct in a derivative
suit absent a court order. Indemnification is required, however, to the extent
such person succeeds on the merits. In all other cases, if a director, officer,
employee, or agent acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation,
indemnification is discretionary except as otherwise provided by a
corporation's articles, code of regulations, or by contract except with respect
to the advancement of expenses of directors.
Under Ohio law, a director is not liable for monetary damages unless it is
proved by clear and convincing evidence that his action or failure to act was
undertaken with deliberate intent to cause injury to the corporation or with
reckless disregard for the best interests of the corporation. There is,
however, no comparable provision limiting the liability of officers, employees,
or agents of a corporation. The statutory right to indemnification is not
exclusive in Ohio, and Ohio corporations may, among other things, procure
insurance for such persons.
The KeyCorp Regulations provide that KeyCorp shall indemnify to the fullest
extent permitted by law any person made or threatened to be made a party to any
action, suit, or proceeding by reason of the fact that he is or was a director,
officer, or employee of KeyCorp or of any other bank, corporation, partnership,
trust, or other enterprise for which he was serving as a director, officer, or
employee at the request of KeyCorp.
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Reference is made to the Form of Underwriting Agreement and the Distribution
Agreement for additional provisions for the indemnification of directors,
controlling persons, and certain officers of the Registrant by the
underwriters. The Forms of Underwriting Agreement and Distribution Agreement
are exhibits to the Registration Statement.
Except as stated above, neither the Amended and Restated Articles of
Incorporation of KeyCorp nor any other contract or arrangement to which KeyCorp
is a party provides for such indemnification. Under the terms of KeyCorp's
directors' and officers' liability and company reimbursement insurance policy,
directors and officers of KeyCorp are insured against certain liabilities,
including liabilities arising under the Securities Act.
KeyCorp is a party to Employment Agreements with, respectively, Victor J.
Riley, Jr., Robert W. Gillespie, and Roger Noall, and KeyCorp is party to
Change of Control Agreements with certain other executive officers (the
provisions of which became effective as a result of the merger of old KeyCorp
with and into Society), pursuant to which KeyCorp has agreed to indemnify the
officer, to the full extent permitted or authorized by Ohio law, if the officer
is made or threatened to be made a party to any action, suit, or proceeding by
reason of the officer's serving as an employee, officer, or director of KeyCorp
and/or any of its subsidiaries or any other company at the request of KeyCorp
or any of its subsidiaries, and KeyCorp has agreed to advance expenses incurred
by the officer in defending any such action, suit, or proceeding.
ITEM 16. EXHIBITS.
See Index to Exhibits.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) to remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration
II-2
<PAGE>
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby further undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act ("Act") in accordance
with the rules and regulations prescribed by the Commission under section
305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO, ON THIS SIXTEENTH DAY OF
MAY, 1994.
KeyCorp
/s/ Carter B. Chase
By___________________________________
CARTER B. CHASE
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL, AND SECRETARY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
TITLE AND DESCRIPTION
---------------------
<S> <C>
Victor J. Riley, Jr., Chairman of the Board, Chief Executive Officer, and
Director (Principal Executive Officer); James W. Wert, Chief Financial
Officer (Principal Financial Officer); Lee G. Irving, Executive Vice
President, Treasurer, and Chief Accounting Officer (Principal Accounting
Officer); H. Douglas Barclay, Director; William G. Bares, Director;
Albert C. Bersticker, Director; Thomas A. Commes, Director;
John C. Dimmer, Director; Lucie J. Fjeldstad, Director;
Henry S. Hemingway, Director; Charles R. Hogan, Director;
Lawrence A. Leser, Director; Steven A. Minter, Director;
M. Thomas Moore, Director; John C. Morley, Director;
Richard W. Pogue, Director; Robert A. Schumacher, Director;
Dennis W. Sullivan, Director; Peter G. Ten Eyck, II, Director; and
Nancy B. Veeder, Director.
</TABLE>
/s/ Carter B. Chase
By___________________________________
CARTER B. CHASE
ATTORNEY-IN-FACT
May 16, 1994
II-4
<PAGE>
KEYCORP
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
FORM S-3
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
(1)(a) Form of Underwriting Agreement.*
(1)(b) Form of Distribution Agreement.*
(4)(a) Amended and Restated Articles of Incorporation of KeyCorp.
Incorporated herein by reference to Exhibit 7 to Form 8-A/A filed
on February 25, 1994.
(4)(b) Regulations of KeyCorp. Incorporated herein by reference to
Exhibit 6 to Form 8-A/A filed on February 25, 1994.
(4)(c) Form of Senior Indenture, between KeyCorp and Bankers Trust
Company, as Trustee.*
(4)(d) Form of Subordinated Indenture between KeyCorp and Bankers Trust
Company, as Trustee.*
(4)(e) Form of Senior Debt Securities.*
(4)(f) Form of Subordinated Debt Securities.*
(4)(g) Form of Warrant Agreement.*
(4)(h) Form of Warrant Certificate.*
(4)(i) Form of Deposit Agreement.*
(4)(j) Form of Depositary Receipt.*
(4)(k) Rights Agreement, dated as of August 25, 1989, between Society
Corporation (renamed KeyCorp on March 1, 1994) and First Chicago
Trust Company of New York, as Rights Agent, including as Exhibit
A thereto the form of Rights Certificate. Incorporated herein by
reference to Exhibit 1 to Form 8-A filed on August 29, 1989.
(4)(l) Amendment No. 1 to Rights Agreement, dated February 21, 1991,
between Society Corporation (renamed KeyCorp on March 1, 1994)
and First Chicago Trust Company of New York, as Rights Agent.
Incorporated herein by reference to Exhibit 1 to Form 8-A filed
on February 28, 1991.
(4)(m) Amendment No. 2 to Rights Agreement, dated September 12, 1991,
between Society Corporation (renamed KeyCorp on March 1, 1994)
and First Chicago Trust Company of New York, as Rights Agent.
Incorporated herein by reference to Exhibit 4 to Schedule 13D
filed on September 23, 1991.
(4)(n) Amendment No. 3 to Rights Agreement, dated October 1, 1993,
between Society Corporation (renamed KeyCorp on March 1, 1994)
and Society National Bank, as Rights Agent. Incorporated herein
by reference to Exhibit 4 to Schedule 13D filed on October 12,
1993.
(5) Opinion of Thompson, Hine and Flory as to the legality of the
securities to be registered.*
(12) Computation of KeyCorp's Consolidated Ratios of Earnings to Fixed
Charges and Combined Fixed Charges and Preferred Stock Dividends.
(23)(a) Consent of Ernst & Young.
(23)(b) Consent of Thompson, Hine and Flory (included as part of Exhibits
(5)).*
(24)(a) Powers of Attorney.
(24)(b) Certified Resolutions of Board of Directors of KeyCorp.
(25) Form T-1 Statement of Eligibility and Qualifications under the
Trust Indenture Act of 1939 of Bankers Trust Company, as Trustee.
</TABLE>
- --------
* To be filed by amendment.
<PAGE>
Exhibit No. 12
KEYCORP
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Mar. 31, Year ended December 31,
--------------------------- --------------------------------
1994 1993 1993 1992
------------- ------------ --------------- ---------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Computation of Earnings:
Net income $208,638 $189,874 $ 709,926 $ 592,098
Add: Provision (credit) for income taxes 106,412 95,915 373,972 279,632
Less: Cumulative effect of accounting change 6,613
------------- ------------- --------------- ---------------
Income before income taxes 315,050 285,789 1,083,898 865,117
Fixed charges, excluding interest on deposits 75,120 86,956 344,585 324,365
------------- ------------- --------------- ---------------
Total earnings for computation,
excluding interest on deposits 390,170 372,745 1,428,483 1,189,482
Interest on deposits 293,517 316,919 1,233,331 1,468,974
------------- ------------- --------------- ---------------
Total earnings for computation,
including interest on deposits $683,687 $689,664 $2,661,814 $2,658,456
============= ============= =============== ===============
Computation of Fixed Charges:
Net rental expense $ 33,071 $ 32,115 $ 130,361 $ 130,973
============= ============= =============== ===============
Portion of net rental expense deemed
representative of interest $ 10,913 $ 10,598 $ 43,019 $ 43,221
Interest on short-term borrowed funds 33,621 42,932 174,664 174,059
Interest on long-term debt 30,586 33,426 126,902 107,085
------------- ------------- --------------- ---------------
Total fixed charges, excluding interest
on deposits 75,120 86,956 344,585 324,365
Interest on deposits 293,517 316,919 1,233,331 1,468,974
------------- ------------- --------------- ---------------
Total fixed charges, including interest
on deposits $368,637 $403,875 $1,577,916 $1,793,339
============= ============= =============== ===============
Combined Fixed Charges and Preferred Stock Dividends:
Preferred stock dividend requirement on
a pre-tax basis $ 6,040 $ 8,262 $ 27,630 $ 35,505
Total fixed charges, excluding interest
on deposits 75,120 86,956 344,585 324,365
------------- ------------- --------------- ---------------
Combined fixed charges and preferred stock
dividends, excluding interest on deposits 81,160 95,218 372,215 359,870
Interest on deposits 293,517 316,919 1,233,331 1,468,974
------------- ------------- --------------- ---------------
Combined fixed charges and preferred stock
dividends, including interest on deposits $374,677 $412,137 $1,605,546 $1,828,844
============= ============= =============== ===============
Ratio of Earnings to Combined Fixed Charges:
Excluding deposit interest 5.19x 4.29x 4.15x 3.67x
Including deposit interest 1.85x 1.71x 1.69x 1.48x
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends:
Excluding deposit interest 4.81x 3.91x 3.84x 3.31x
Including deposit interest 1.82x 1.67x 1.66x 1.45x
<CAPTION>
Year ended December 31,
---------------------------------------------------
1991 1990 1989
--------------- --------------- ---------------
(dollars in thousands)
<S> <C> <C> <C>
Computation of Earnings:
Net income $ 313,696 $ 256,098 $ 286,688
Add: Provision (credit) for income taxes 136,684 15,173 130,800
Less: Cumulative effect of accounting change 2,714
--------------- --------------- ---------------
Income before income taxes 450,380 268,557 417,488
Fixed charges, excluding interest on deposits 422,189 472,468 567,533
--------------- --------------- ---------------
Total earnings for computation,
excluding interest on deposits 872,569 741,025 985,021
Interest on deposits 2,135,651 2,230,759 2,078,692
--------------- --------------- ---------------
Total earnings for computation, $3,008,220 $2,971,784 $3,063,713
=============== =============== ===============
including interest on deposits
Computation of Fixed Charges:
Net rental expense $ 118,855 $ 107,615 $ 92,498
=============== =============== ===============
Portion of net rental expense deemed
representative of interest $ 38,450 $ 35,470 $ 30,454
Interest on short-term borrowed funds 288,220 339,876 418,408
Interest on long-term debt 95,519 97,122 118,671
--------------- --------------- ---------------
Total fixed charges, excluding interest
on deposits 422,189 472,468 567,533
Interest on deposits 2,135,651 2,230,759 2,078,692
--------------- --------------- ---------------
Total fixed charges, including interest
on deposits $2,557,840 $2,703,227 $2,646,225
=============== =============== ===============
Combined Fixed Charges and Preferred Stock Dividends:
Preferred stock dividend requirement on
a pre-tax basis $ 23,292 $ 7,484 $ 7,913
Total fixed charges, excluding interest
on deposits 422,189 472,468 567,533
--------------- --------------- ---------------
Combined fixed charges and preferred stock
dividends, excluding interest on deposits 445,481 479,952 575,446
Interest on deposits 2,135,651 2,230,759 2,078,692
--------------- --------------- ---------------
Combined fixed charges and preferred stock
dividends, including interest on deposits $2,581,132 $2,710,711 $2,654,138
=============== =============== ===============
Ratio of Earnings to Combined Fixed Charges:
Excluding deposit interest 2.07x 1.57x 1.74x
Including deposit interest 1.18x 1.10x 1.16x
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends:
Excluding deposit interest 1.96x 1.54x 1.71x
Including deposit interest 1.17x 1.10x 1.15x
</TABLE>
<PAGE>
EXHIBIT 23(a)
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in this Registration Statement (Form S-3) and related Prospectus of
KeyCorp dated May 16, 1994, and to the incorporation by reference therein of our
reports (a) dated March 1, 1994, with respect to the consolidated financial
statements for the year ended December 31, 1993 of KeyCorp (as restated to give
effect to the March 1, 1994 merger of KeyCorp and Society Corporation), included
in and incorporated by reference into the Corporation's Current Report on Form
8-K filed with the Commission on April 20, 1994, (b) dated January 20, 1994,
except for Note 2 as to which the date is March 1, 1994, with respect to the
consolidated financial statements for the year ended December 31, 1993 of
KeyCorp, which on March 1, 1994 merged with Society Corporation, subsequently
renamed KeyCorp, included in the Corporation's Current Report on Form 8-K filed
with the Commission on March 16, 1994, (c) dated January 28, 1994, except for
Note 2 as to which the date is March 1, 1994, with respect to the consolidated
financial statements for the year ended December 31, 1993 of Society
Corporation included in its Annual Report on Form 10-K filed with the
Securities and Exchange Commission (Society Corporation's financial statements
have subsequently been restated for the March 1, 1994 merger of KeyCorp and
Society Corporation), and (d) dated March 1, 1994, with respect to the
supplemental consolidated financial statements for the year ended December 31,
1993 of KeyCorp included in its Annual Report on Form 10-K filed with the
Securities and Exchange Commission. The supplemental consolidated financial
statements became the historical financial statements of KeyCorp upon the
filing of the Form 8-K dated April 20, 1994.
Ernst & Young
Cleveland, Ohio
May 9, 1994
<PAGE>
Exhibit No.24(a)
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ Victor J. Riley, Jr.
-------------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
May 9, 1994.
/s/ Lee G. Irving
--------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 15, 1994.
/s/ James W. Wert
-------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 19, 1994.
/s/ H. Douglas Barclay
-----------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ William G. Bares
--------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 15, 1994.
/s/ Albert C. Bersticker
-------------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ Thomas A. Commes
---------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ John C. Dimmer
---------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 19, 1994.
/s/ Lucie J. Fjeldstad
----------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ Henry S. Hemingway
-------------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ Charles R. Hogan
---------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ Lawrence A. Leser
----------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ Stephen A. Minter
---------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 15, 1994.
/s/ M. Thomas Moore
---------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ John C. Morley
-------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 15, 1994.
/s/ Richard W. Pogue
---------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 16, 1994.
/s/ Robert A. Schumacher
-------------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ Dennis W. Sullivan
-----------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 18, 1994.
/s/ Peter G. Ten Eyck, II
---------------------------------
<PAGE>
KEYCORP
-------
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director, or both an officer and director of
KeyCorp, an Ohio corporation, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, such registration statements or amendments to existing
registration statements (on Form S-3 or such other form or forms as are
applicable) to effect the shelf registration pursuant to Rule 415 of the
Securities and Exchange Commission of debt, equity, capital securities and
warrants to purchase such securities with an aggregate issue price of up to
$750,000,000 to be issued and sold from time to time in one or more public or
private offerings, hereby constitutes and appoints James W. Wert, Lee Irving,
and Carter B. Chase, and each of them, as attorney for the undersigned, with
full power of substitution and resubstitution for and in the name, place, and
stead of the undersigned, to sign and file the proposed registration statements
or amendments to existing registration statements and any and all amendments,
post-effective amendments, and exhibits thereto, and any and all applications
and other documents to be filed with the Securities and Exchange Commission
pertaining to such securities or such registration with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
to be done in the premises, hereby ratifying and approving the acts of such
attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
April 19, 1994.
/s/ Nancy B. Veeder
---------------------------
<PAGE>
[LETTERHEAD OF KEYCORP APPEARS HERE]
Exhibit (24)(b)
CERTIFICATION
-------------
I, Steven N. Bulloch, hereby certify that I am currently an Assistant
Secretary of KeyCorp, and that attached hereto is a true and correct copy of a
resolution adopted by the Board of Directors of the Corporation at a meeting
held March 17, 1994, and further that said resolution has not been rescinded
or amended and remains in full force and effect.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and the
seal of KeyCorp this 11th day of May, 1994.
{SEAL} /s/ Steven N. Bulloch
--------------------------
Steven N. Bulloch
Assistant Secretary
KeyCorp
- 1 -
<PAGE>
Resolution adopted by the Board of Directors of KeyCorp on March 17, 1994.
WHEREAS, the Corporation's Registration Statement No. 33-51652,
authorized by resolutions adopted by the Executive Committee of the Board of
Directors of the Corporation on January 17, 1991, July 17, 1992, and December
17, 1992, and filed on September 3, 1992 with the Securities and Exchange
Commission (the "Commission") for the shelf registration of its debt securities
has $200,000,000 of unissued subordinated debt remaining unsold and $189,400,000
of unissued medium-term notes remaining unsold, and
WHEREAS, the Corporation's Registration Statement No. 33-39734,
authorized by a resolution adopted by the Executive Committee of the Board of
Directors of the Corporation on January 17, 1991 and filed on May 17, 1991 with
the Commission for the shelf registration of its preferred stock has
$200,000,000 of unissued equity securities remaining unsold, and
WHEREAS, the Corporation wishes to consolidate the above-referenced
shelf registrations and to increase the amount of its securities registered by
$160,600,000 so that the total principal amount of securities available for
issuance under shelf registration will be $750,000,000, and
WHEREAS, the Corporation wishes to include additional types of both
debt and equity securities to its securities available for issuance under shelf
registration to provide enhanced and diversified financing capacity.
RESOLVED, that the Corporation is hereby authorized to issue, from
time to time, in one or more public or private offerings, securities with an
aggregate issue price of up to $750,000,000. The securities may be either: (a)
debt securities ("Debt Securities") which may be either senior or subordinated
indebtedness, including without limitation, medium-term notes; (b) warrants to
purchase Debt Securities ("Debt Warrants"); (c) Common Shares with a par value
of $1.00 each of the Corporation ("Common Shares") accompanied by rights to
purchase Common Shares ("Rights") under the Corporation's Rights Agreement,
dated August 25, 1989, as amended; (d) shares of the Corporation's preferred
stock with a par value of $1.00 each ("Preferred Stock"), which may be issued in
the form of depositary shares evidenced by depositary receipts ("Depositary
Shares"); (e) warrants to purchase Common Shares, Preferred Stock, or Depositary
Shares ("Stock Warrants"), or any combination of the foregoing, either
individually or as units consisting of one or more securities. Any issue of
subordinated Debt Securities (the "Subordinated Debt Securities") may be
exchangeable for Common Shares, perpetual preferred stock, or other equity
securities acceptable to the Corporation's primary federal banking regulator
("Capital Securities"), and any issue of Prefer-
- 2 -
<PAGE>
red Stock may be exchangeable for any class or series of Capital Securities, or
other debt securities of the Corporation. The Subordinated Debt Securities may
be subject to conversion by the Corporation into Capital Securities of the
Corporation. Preferred Stock may be subject to conversion by the Corporation
into any class or series of Capital Securities. The Debt Securities, the
Preferred Stock, the Depositary Shares, and the Common Shares are hereinafter
referred to collectively as "Warrant Exercise Items". The Debt Warrants and the
Stock Warrants are collectively referred to as the "Warrants" and the Debt
Securities, Warrants, Common Shares, Rights, Preferred Stock and Depositary
Shares are collectively referred to herein as "Securities". The Securities may
be offered and sold in either a single offering or a series of offerings in the
United States or elsewhere, may be denominated when issued in U.S. dollars or
any foreign currency, currency unit or composite currency ("Currency") and may
be issued on such terms as hereafter shall be determined by this Board of
Directors.
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized, for and on behalf of the Corporation, to prepare or cause to be
prepared and to execute and file with the Commission a Registration Statement on
Form S-3 (or on such other form or forms as are applicable) under the Securities
Act of 1933, as amended (the "1933 Act") pursuant to Rule 415 of the Commission
for the purpose of registering the offering of the Securities on a delayed or
continuous basis, and any amendments, post-effective amendments, or supplements
thereto, each a "Prospectus Supplement", and exhibits and other documents in
connection therewith.
FURTHER RESOLVED, that the Chief Financial Officer, Treasurer, General
Counsel and Secretary, or any one of them or any other officer of the
Corporation designated by any one of them be, and each of them hereby is,
appointed as the attorneys of the Corporation, with full power of substitution
and resubstitution, for and in the name, place or stead of the Corporation, to
sign and file (a) a Registration Statement on Form S-3 (or on such other form or
forms as are applicable), (b) any and all amendments, post-effective amendments
and exhibits thereto, and (c) any and all applications and other documents to be
filed with the Commission pertaining to such securities or such registration,
with full power and authority to do and perform any and all such acts and things
whatsoever requisite and necessary to effect such registration.
FURTHER RESOLVED, that the Debt Securities will be issued subject to
the terms and conditions of one or more indentures and the officers of the
Corporation are authorized to include the Senior Debt Securities under the
existing Senior Indenture, dated as of December 15, 1992, between the
Corporation and Morgan Guaranty Trust Company of New York, Trustee, and to
include the Subordinated Debt Securities under the existing Subordinated
Indenture, dated as of June 15, 1992, between the Corporation and Morgan
Guaranty Trust Company of New York, Trustee.
- 3 -
<PAGE>
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized, for and on behalf of the Corporation, in connection with any
offering of the Securities, to take any action which any of them may deem
necessary or advisable to effect the registration or qualification of the
Securities under the securities or blue sky laws of any of the States of the
United States of America or to carry out such offering, as contemplated by
resolutions heretofore adopted, and in connection therewith to execute,
acknowledge, verify, deliver, file, and publish all such applications, reports,
issuer's covenants, resolutions, and other papers and instruments, to post bonds
or otherwise give security as may be required under such laws and to take all
such further action as any of them may deem necessary or advisable in order to
maintain any such registration or qualification for as long as any such officer
may deem to be in the best interests of the Corporation.
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized, for and on behalf of the Corporation, to execute and file
irrevocable written consents to service of process in all States of the United
States of America where such consents may be required or advisable under the
securities law thereof in connection with the registration or qualification of
the Securities, and to appoint the appropriate person as agent of the
Corporation for the purpose of receiving and accepting such process.
FURTHER RESOLVED that, any form of additional resolution or
resolutions required by law or regulation in connection with the foregoing
resolutions, be and hereby are adopted, and that the Secretary or any Assistant
Secretary of the Corporation be and each of them is hereby authorized to certify
as having been adopted by the Board of Directors of the Corporation any such
form of resolution, and a copy of each form of resolution so certified shall be
attached to the minutes of this meeting.
FURTHER RESOLVED, that the officers of the Corporation be and each of
them are hereby authorized to take any and all action as may be necessary or
advisable to carry out the intent and purposes of the foregoing resolutions, and
that the signature of any such officer to any document shall be conclusive, as
to the approval of the Corporation and this Board of Directors of the form and
substance of such written instrument.
- 4 -
<PAGE>
______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER
THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ___________
______________________________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification n.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
_________________________________
KEYCORP
(Exact name of obligor as specified in the charter)
OHIO 34-6542451
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
127 PUBLIC SQUARE
CLEVELAND, OHIO 44114
(Address of principal executive offices) (Zip Code)
______________________________
750,000,000 DEBT SECURITIES
(Title of the indenture securities)
______________________________________________________________________________
<PAGE>
-2-
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990 and Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated June 23, 1992 - Incorporated herein
by reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-48267.
Exhibit 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed with
Form T-1 Statement, Registration No. 33-21047.
Exhibit 3 - Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement, Registration
No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust Company, dated as
amended on September 21, 1993. - Incorporated herein by
reference to Exhibit 4 filed with Form T-1 Statement,
Registration No. 33-48267.
<PAGE>
-3-
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference to
Exhibit 4 filed with Form T-1 Statement, Registration No.
22-18864.
Exhibit 7 - A copy of the latest report of condition of Bankers
Trust Company dated as of March 31, 1993 - (Copy
attached).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trustee Indenture Act of 1939 the
trustee, Bankers Trust Company, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
The City of New York, and State of New York, on the 16th day of May, 1994.
BANKERS TRUST COMPANY
By: /s/ Jenna Rossheim
----------------------------
Jenna Rossheim
Assistant Vice President
<PAGE>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/93
Address: 130 Liberty Street ST-BK: 36-4840
City, State Zip: New York, NY 10006 FFIEC 031
FDIC Certificate No.: |0|0|6|2|3| Page RC-1
- -----------
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1993
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
---------
C400
---------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------ ---------------------
<S> <C> <C>
ASSETS /////////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): /////////////////////
a. Noninterest-bearing balances and currency and coin(1).................................. 0081 1,795,000 1.a.
b. Interest-bearing balances(2)........................................................... 0071 2,182,000 1.b.
2. Securities (from Schedule RC-B)............................................................ 0390 5,184,000 2.
3. Federal funds sold and securities purchased under agreements to resell in domestic offices /////////////////////
of the bank and of its Edge and Agreement subsidiaries, and in IBFs: /////////////////////
a. Federal funds sold..................................................................... 0276 2,300,000 3.a.
b. Securities purchased under agreements to resell........................................ 0277 663,000 3.b.
4. Loans and lease financing receivables: /////////////////////
-------------------------
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 18,056,000 ///////////////////// 4.a.
b. LESS: Allowance for loan and lease losses................... RCFD 3123 1,249,000 ///////////////////// 4.b.
c. LESS: Allocated transfer risk reserve....................... RCFD 3128 0 ///////////////////// 4.c.
------------------------- /////////////////////
d. Loans and leases, net of unearned income, /////////////////////
allowance, and reserve (item 4.a minus 4.b and 4.c).................................... 2125 16,807,000 4.d.
5. Assets held in trading accounts............................................................ 2146 30,384,000 5.
6. Premises and fixed assets (including capitalized leases)................................... 2145 687,000 6.
7. Other real estate owned (from Schedule RC-M)............................................... 2150 261,000 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)... 2130 181,000 8.
9. Customers' liability to this bank on acceptances outstanding............................... 2155 455,000 9.
10. Intangible assets (from Schedule RC-M)..................................................... 2143 10,000 10.
11. Other assets (from Schedule RC-F).......................................................... 2160 7,225,000 11.
12. Total assets (sum of items 1 through 11)................................................... 2170 68,134,000 12.
---------------------
</TABLE>
- ------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/93
Address: 130 Liberty Street ST-BK: 36-4840
City, State Zip: New York, NY 10006 FFIEC 031
FDIC Certificate No.: 0 0 6 7 3 Page RC-2
- - - - -
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands ///////// Bil Mil Thou
- ------------------------------------------------------------------------------------------------ ----------------------
<S> <C> <C>
LIABILITIES //////////////////////
13. Deposits: //////////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I)...... RCON 2200 9,397,000 13.a.
-----------------------
(1) Noninterest-bearing(1).................................... RCON 6631 3,250,000 ////////////////////// 13.a.(1)
(2) Interest-bearing.......................................... RCON 6636 6,147,000 ////////////////////// 13.a.(2)
-----------------------
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, //////////////////////
part II)............................................................................... RCFN 2200 13,529,000 13.b.
-----------------------
(1) Noninterest-bearing....................................... RCFN 6631 738,000 ////////////////////// 13.b.(1)
(2) Interest-bearing.......................................... RCFN 6636 12,791,000 ////////////////////// 13.b.(2)
-----------------------
14. Federal funds purchased and securities sold under agreements to repurchase in domestic //////////////////////
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: //////////////////////
a. Federal funds purchased................................................................ RCFD 0278 6,973,000 14.a.
b. Securities sold under agreements to repurchase......................................... RCFD 0279 145,000 14.b.
15. Demand notes issued to the U.S. Treasury................................................... RCON 2840 0 15.
16. Other borrowed money....................................................................... RCFD 2850 18,440,000 16.
17. Mortgage indebtedness and obligations under capitalized leases............................. RCFD 2910 6,000 17.
18. Bank's liability on acceptances executed and outstanding................................... RCFD 2920 455,000 18.
19. Subordinated notes and debentures.......................................................... RCFD 3200 1,278,000 19.
20. Other liabilities (from Schedule RC-G)..................................................... RCFD 2930 13,981,000 20.
21. Total liabilities (sum of items 13 through 20)............................................. RCFD 2948 64,204,000 21.
//////////////////////
22. Limited-life preferred stock and related surplus........................................... RCFD 3282 0 22.
EQUITY CAPITAL //////////////////////
23. Perpetual preferred stock and related surplus.............................................. RCFD 3838 250,000 23.
24. Common stock............................................................................... RCFD 3230 702,000 24.
25. Surplus (exclude all surplus related to preferred stock)................................... RCFD 3839 498,000 25.
26. a. Undivided profits and capital reserves................................................. RCFD 3532 2,756,000 26.a.
b. LESS: Net unrealized loss on marketable equity securities............................. RCFD 0297 (41,000) 26.b.
27. Cumulative foreign currency translation adjustments........................................ RCFD 3284 (317,000) 27.
28. Total equity capital (sum of items 23 through 27).......................................... RCFD 3210 3,930,000 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, //////////////////////
and 28).................................................................................... RCFD 3300 68,134,000 29.
----------------------
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the
statement below that describes the most comprehensive
level of auditing work performed for the bank by Number
independent external auditors as of any date during ---------------
1992................................................... RCFD 6724 N/A M.1.
---------------
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -----------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
ANNEX B
BY-LAWS
September 21, 1993
Bankers Trust Company
New York
<PAGE>
BY-LAWS
of
Bankers Trust Company
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be
held at the office of the Company in the Borough of Manhattan, City of New
York, on the third Tuesday in January of each year, for the election of
directors and such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board or the President to call such meetings
whenever requested in writing to do so by stockholders owning a majority of
the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the President, or in
their absence, the senior officer present, shall preside at meetings of the
stockholders and shall direct the proceedings and the order of business. The
Secretary shall act as secretary of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate
powers exercised by a Board of Directors consisting of such number of
directors, but not less than ten nor more than twenty-five, as may from time
to time be fixed by resolution adopted by a majority of the directors then in
office, or by the stockholders. In the event of any increase in the number
of directors, additional directors may be elected, within the limitations so
fixed, either by the stockholders or, with the limitations imposed by law, by
a majority of directors then in office. One-third of the number of directors,
as fixed from time to time, shall constitute a quorum. Any one or more
members of the Board of Directors or any Committee thereof, may participate in
a meeting of the Board of Directors or Committee thereof by means of a
conference telephone or similar communications equipment which allows all
persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at such a
meeting. All directors hereafter elected shall hold office until the next
annual meeting of the stockholders and until their successors are elected and
have qualified. No person who shall have attained age 70 shall be eligible to
be elected or re-elected a director.
<PAGE>
No Officer-Director who shall have attained the age of 65, or earlier
relinquishes his responsibilities and title, shall be eligible to serve as a
director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board
of Directors may be filled by the affirmative vote of a majority of the
directors then in office, and the directors so elected shall hold office for
the balance of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board
of Directors. In his absence, such other director as the Board of Directors
from time to time may designate shall preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time
to time on the third Tuesday of the month. If the day appointed for holding
such regular meetings shall be a legal holiday, the regular meeting to be held
on such day shall be held on the next business day thereafter. Special
meetings of the Board of Directors may be called upon at least one day's notice
whenever it may be deemed proper by the Chairman of the Board or, in his
absence, by such other director as the Board of Directors may have designated
pursuant to Section 3 of this Article, and shall be called upon like notice
whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members of committees
shall be fixed from time to time by resolution of the Board of Directors.
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of
not less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the
Executive Committee. In his absence such other member of the Committee as the
Committee from time to time may designate shall preside at such meetings.
The executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented
to the Board of Directors at its next subsequent meeting. All acts done and
powers and authority conferred by the Executive Committee from time to time
shall be and be deemed to be, and may be certified as being, the act and under
the authority of the Board of Directors.
<PAGE>
A majority of the Committee shall constitute a quorum, but the Committee may
act only by the concurrent vote of not less than one-third of its members, at
least one of whom must be a director other than an officer. Any one or more
directors, even though not members of the Executive Committee, may attend any
meeting of the Committee, and the members or members of the Committee present,
even though less than a quorum, may designate any one or more of such
directors as a substitute or substitutes for any absent member or members of
the Committee, and each such substitute or substitutes shall be counted for
quorum, voting, and all other purposes as a member or members of the
Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may
from time to time be fixed by resolution adopted by the Board of Directors.
The Chairman shall be designated by the Board of Directors, who shall also
from time to time fix a quorum for meetings of the Committee. Such Committee
shall conduct the annual director's examination of the Company as required by
the New York State Banking Law; shall review the reports of all examinations
made of the Company by public authorities and report thereon to the Board of
Directors; and shall report to the Board of Directors such other matters as it
deems advisable with respect to the Company, its various departments and the
conduct of its operations.
In the performance of its duties, the Audit Committee may employ or retain,
from time to time, expert assistants, independent of the officers or personnel
of the Company, to make studies of the Company's assets and liabilities as the
Committee may request and to make an examination of the accounting and
auditing methods of the Company and its system of internal protective controls
to the extent considered necessary or advisable in order to determine that the
operations of the Company including its fiduciary departments, are being
audited by the General Auditor in such a manner as to provide prudent and
adequate protection. The Committee also may direct the General Auditor to
make such investigation as it deems necessary or advisable with respect to the
Company, its various departments and the conduct of its operations. The
Committee shall hold regular quarterly meetings and during the intervals
thereof shall meet at other times on call of the Chairman.
SECTION 3. The Board of Directors shall have the power to appoint any other
Committees as may seem necessary, and from time to time to suspend or continue
the powers and duties of such Committees. Each Committee appointed pursuant
to this Article shall serve at the pleasure of the Board of Directors.
<PAGE>
ARTICLE IV
OFFICERS
SECTION 1. The officers of the Company shall be a Chairman of the Board, a
President, one or more Vice Chairman, one or more Executive Vice Presidents,
Managing Directors, and Senior Vice Presidents, one or more First Vice
Presidents, Vice Presidents, and General Managers, a Controller, a Treasurer,
a General Auditor, one or more Deputy Auditors, a General Credit Auditor, a
General Counsel, one or more Associate General Counsels, and a Secretary, all
of whom shall be elected by the Board of Directors, and such officers as shall
from time to time be elected by the Board of Directors or the Executive
Committee or appointed by the Chairman of the Board, or in his absence, the
President.
SECTION 2. The Chairman of the Board shall be the chief executive officer of
the Company and as such shall have, subject to the supervision and direction
of the Board of Directors or the Executive Committee, all of the powers vested
in such chief executive officer by law or by these By-Laws, or which usually
attach or pertain so such office. The other officers shall have, subject to
the supervision and direction of the Board of Directors or the Executive
Committee or the Chairman of the Board the powers vested by law or by these
By-Laws in them as holders of their respective officers and, in addition,
shall perform such other duties as shall be assigned to them by the Board of
Directors or the Executive Committee or the Chairman of the Board.
The General Auditor shall be responsible to the Chairman of the Board and,
through the Audit Committee, to the Board of Directors for the determination
of the program of the internal audit function and the evaluation of the
adequacy of the system of internal controls. He shall perform such other
duties as the Chairman of the Board may prescribe and shall make such
examinations and reports as may be required by the Audit Committee. The
General Auditor shall have unrestricted access to all records and premises and
shall delegate such authority to his subordinates. He shall have the duty to
report to the Chairman of the Board on all matters concerning the internal
audit program and the adequacy of the system of internal controls of the
Company which he deems advisable or which the Chairman of the Board may
request. Additionally, the General Auditor shall have the duty of reporting
independently of all officers of the Company to the Audit Committee at least
quarterly on any matters concerning the internal audit program and the
adequacy of the system of internal controls of the Company which should be
brought to the attention of the directors except those matters responsibility
for which has been vested in the officer in charge of Credit Audit. Should
the General Auditor deem any matter to be of special immediate importance, he
shall report thereon forthwith to the Audit Committee.
The General Credit Auditor shall be responsible to the Chairman of the Board
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chairman of the
Board may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
<PAGE>
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved
from time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of
the Board or any persons authorized for this purpose by the Chairman of the
Board, shall appoint or engage all other employees and agents and fix their
compensation. The employment of all such employees and agents shall continue
during the pleasure of the Board of Directors or the Executive Committee or the
Chairman of the Board of any such authorized person; and the Board of
Directors, the Executive Committee, the Chairman of the Board or any such
authorized person may discharge any such employees and agents at will.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018
of the New York Banking Law, indemnify any person who is or was made, or
threatened to be made, a party to an action or proceeding, whether civil or
criminal, whether involving any actual or alleged breach of duty, neglect or
error, any accountability, or any actual or alleged misstatement, misleading
statement or other act or omission and whether brought or threatened in any
court or administrative or legislative body or agency, including an action by
or in the right of the Company to procure a judgment in its favor and an
action by or in the right of any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer of the Company
is servicing or served in any capacity at the request of the Company by reason
of the fact that he, his testator or intestate, is or was a director or officer
of the Company, or is serving or served such other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise in any
capacity, against judgments, fines, amounts paid in settlement, and costs,
charges and expenses, including attorneys' fees, or any appeal therein;
provided, however, that no indemnification shall be provided to any such person
if a judgment or other final adjudication adverse to the director or officer
established that (i) his acts were committed in bad faith or were the result
of active and deliberate dishonesty and, in either case, were material to the
cause of action so adjudicated, or (ii) he personally gained in fact a
financial profit or other advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided
by, the New York Banking Law or other rights created by (i) a resolution of
stockholder, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
<PAGE>
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or
proceeding referred to in Section 1, upon receipt of a written undertaking by
or on behalf of such person to repay such amount(s) if a judgment or other
final adjudication adverse to the director or officer established that (i) his
acts were committed in bad faith or were the results of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 4. Any director or officer of the Company serving (i) another
corporation, of which a majority of the shares entitled to vote in the
election of its directors is held by the Company, or (ii) any employee benefit
plan of the Company or any corporation referred to in clause (i), in any
capacity shall be deemed to be doing so at the request of the Company. In all
other cases, the provisions of this Article V will apply (i) only if the
person serving another corporation or any partnership, joint venture, employee
benefit plan or other enterprise so served at the specific request of the
Company, evidenced by a written communication signed by the Chairman of the
Board or the President, and (ii) only if and to the extent that, after making
such efforts as the Chairman of the Board or the President shall deem adequate
in the circumstances, such person shall be unable to obtain indemnification
from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect
at the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement
of expense pursuant to this Article V (i) is a contract right pursuant to
which the person entitled thereto may bring suit as if the provisions hereof
were set forth in a separate written contract between the Company and the
director or officer, (ii) is intended to be retroactive and shall be available
with respect to events occurring prior to the adoption hereof, and (iii) shall
continue to exist after the rescission or restrictive modification hereof with
respect to events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of or
reimbursement or advancement of expenses to the claimant is proper in the
circumstances, nor an actual determination by the Company (including its Board
of Directors, independent legal counsel, or its stockholders) that the
claimant is not entitled to indemnification or to the reimbursement or
advancement of expenses, shall be a defense to the action or create a
presumption that the claimant is not so entitled.
<PAGE>
SECTION 8. A person who has been successful, on he merits or otherwise, in
the defense of a civil or criminal action or proceeding of the character
described in Section 1 shall be entitled to indemnification only a provided in
Sections 1 and 3, notwithstanding any provision of the New York Banking Law to
the contrary.
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the Company, the
counterpart dies of which shall be in charge of the Secretary of the Company
and such officers as the Chairman of the Board or the Secretary may from time
to time direct in writing, to be affixed to certificates of stock and other
documents in accordance with the directions of the Board of Directors or the
Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases on a specified
occasion and for a specified transaction or transactions, for the use of a
printed or engraved facsimile seal of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of share shall only be made upon the
books of the Company by the registered holder in person, or by power of
attorney, duly executed, witnessed and filed with the Secretary or other
proper officer of the Company, on the surrender of the certificate or
certificates of such shares properly assigned for transfer.
ARTICLE VII
CONSTRUCTION
SECTION 1. The masculine gender, when appearing in these By-Laws, shall be
deemed to include the feminine gender.
<PAGE>
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by the Board of
Directors at any meeting, or by stockholders at any annual or special meeting,
provided notice thereof has been given.
I, ________________________________, [Assistant] Secretary of Bankers Trust
Company, New York, New York, hereby certify that the foregoing is a complete,
true and correct copy of the By-Laws of Bankers Trust Company, and that the
same are in full force and effect at this date.
--------------------------------
[ASSISTANT] SECRETARY
DATED:
-------------------
