<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 33-51984
AND 33-50333
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 8, 1993
$300,000,000
THE BANK OF NEW YORK COMPANY, INC.
8.50% SUBORDINATED NOTES DUE DECEMBER 15, 2004
------------------
The Notes will mature on December 15, 2004 and will not be redeemable
prior to maturity. There will be no sinking fund in respect of the Notes.
Interest on the Notes is payable semi-annually on June 15 and December 15,
beginning June 15, 1995. The Notes are subordinated in right of payment to all
Senior Indebtedness of the Company. The Notes will be issued only in fully
registered form in denominations of $1,000 and integral multiples thereof. See
"Description of Notes." Payment of the principal of the Notes may be
accelerated only in the case of certain events involving the bankruptcy,
insolvency or reorganization of the Company. There is no right of acceleration
of payment of the Notes in the case of a default in the performance of any
covenant of the Company, including payment of principal or interest. See
"Description of Debt Securities--Defaults" in the Prospectus. The Notes will
be represented by one or more permanent Global Notes registered in the name of
a nominee of The Depository Trust Company, as Depositary. Interests in the
Global Notes will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary and its participants. Except as
described under "Description of Notes--Book-Entry System," owners of
beneficial interests in the Global Notes will not be entitled to receive Notes
in definitive form and will not be considered Holders of Notes.
THE NOTES ARE NOT DEPOSITS, SAVINGS ACCOUNTS OR OTHER OBLIGATIONS OF A BANK
OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public(1) Discount(2) Company(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note............................... 99.41% .527% 98.883%
- --------------------------------------------------------------------------------
Total.................................. $298,230,000 $1,581,000 $296,649,000
- --------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
1. Plus accrued interest, if any, from December 13, 1994.
2. The Company has agreed to indemnify the Underwriter against or make
contributions relating to certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
3. Before deducting expenses payable by the Company estimated at $200,000.
------------------
The Notes are offered subject to receipt and acceptance by the Underwriter,
to prior sale and to the Underwriter's right to reject any order in whole or
in part and to withdraw, cancel or modify the offer without notice. It is
expected that delivery of the Notes will be made at the offices of the
Underwriter in New York, New York, or through the facilities of The Depository
Trust Company, on or about December 13, 1994, against payment therefor in
immediately available funds.
------------------
UBS SECURITIES INC.
December 6, 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RECENT DEVELOPMENTS
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 which
was enacted in September, 1994, authorizes (i) bank holding companies to engage
in interstate acquisitions of banks beginning one year after the date of its
enactment, (ii) interstate branching through interstate bank mergers beginning
June 1, 1997 (subject to the ability of states to "opt-in" and thereby permit
such mergers earlier or to "opt-out" and thereby prohibit them), (iii) de novo
interstate branching provided that such action is specifically authorized by
the law of the state in which the branch is to be located and (iv) banks to
receive deposits, close and service loans, and receive payments on loans and
other obligations as agent for a bank affiliate in the same or a different
state beginning September 29, 1995. One effect of this legislation, subject to
the state authority described above, will be to permit the Company to merge two
or more of its banking subsidiaries which, as a result, may create greater
efficiency in its operations.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS
The Company's ratios of earnings to fixed charges for the nine months ended
September 30, 1994 and the year ended December 31, 1993 were 3.83 and 3.61,
respectively, excluding interest on deposits and 1.98 and 1.85, respectively,
including interest on deposits. The Company's ratios of earnings to combined
fixed charges and preferred stock dividend requirements for the nine months
ended September 30, 1994 and the year ended December 31, 1993, were 3.63 and
3.23, respectively, excluding interest on deposits and 1.94 and 1.78,
respectively, including interest on deposits.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes (as defined
below) offered hereby (referred to in the Prospectus as "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of Debt Securities set forth in the
Prospectus, to which description reference is hereby made. Capitalized terms
not otherwise defined herein shall have the meanings given to them in the
Prospectus.
GENERAL
The 8.50% Subordinated Notes due December 15, 2004 (the "Notes") will be
issued by The Bank of New York Company, Inc. (the "Company") as a series of
unsecured Subordinated Debt Securities under the Subordinated Indenture, which
is more fully described in the accompanying Prospectus. The Notes will be
limited to $300,000,000 aggregate principal amount and will mature on December
15, 2004. The Notes will bear interest at the rate of 8.50% per annum from
December 13, 1994, or from the most recent Interest Payment Date to which
interest has been paid or provided for, payable semi-annually on June 15 and
December 15 of each year, commencing June 15, 1995, to the persons in whose
names the Notes (or any predecessor Notes) are registered at the close of
business on the June 1 or December 1, as the case may be, next preceding such
Interest Payment Date. The Notes will not be redeemable prior to the maturity
thereof. There will be no sinking fund in respect of the Notes.
S-2
<PAGE>
The covenant defeasance provisions of the Indenture described under
"Description of Debt Securities--Defeasance and Covenant Defeasance" in the
Prospectus will apply to the Notes.
The payment of the principal of and interest on the Notes will, to the extent
set forth in the Subordinated Indenture, be subordinated in right of payment to
the prior payment in full of all Senior Indebtedness (as defined in the
Subordinated Indenture). The Company's obligations under the Notes shall rank
pari passu in right of payment with other Subordinated Debt Securities and with
the Existing Subordinated Indebtedness, subject to the obligations of the
Holders of Notes to pay over any Excess Proceeds to Entitled Persons in respect
of Other Financial Obligations as provided in the Subordinated Indenture.
Indebtedness of the Company senior to the Notes, at September 30, 1994,
totalled approximately $662,199,000. The Subordinated Indenture does not limit
or prohibit the incurrence of additional Senior Indebtedness. See "Description
of Debt Securities--Subordination of Subordinated Debt Securities" in the
Prospectus.
BOOK-ENTRY SYSTEM
The Notes will be represented by one or more permanent Global Notes
(collectively, the "Global Note") registered in the name of a nominee of The
Depository Trust Company, as Depositary under the Subordinated Indenture (the
"Depositary"). The provisions set forth under "Description of Securities--
Permanent Global Debt Securities" in the Prospectus will be applicable to the
Notes. Accordingly, beneficial interests in the Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Owners of beneficial interests in the Global
Note will not be entitled to receive Notes in definitive form and will not be
considered Holders of Notes unless (i) the Depositary notifies the Company in
writing that it is no longer willing or able to act as a depositary or if the
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes
in definitive form or (iii) any event shall have happened and be continuing
which, after notice or lapse of time, or both, would constitute an Event of
Default with respect to the Notes. In such circumstances, upon surrender by the
Depositary or a successor depositary of the Global Note, Notes in definitive
form will be issued to each person that the Depositary or a successor
depositary identifies as the beneficial owner of the related Notes. Upon such
issuance, the Trustee is required to register such Notes in the name of, and
cause the same to be delivered to, such person or persons (or the nominee
thereof). Such Notes would be issued in fully registered form without coupons,
in denominations of $1,000 and integral multiples thereof.
The Depositary has advised the Company and the Underwriter as follows: The
Depositary is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered under the Exchange Act. The Depositary was created
to hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including the
Underwriter), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own the Depositary.
Access to the Depositary'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
Depositary agrees with and represents to its participants that it will
administer its book-entry system in accordance with its rules and by-laws and
requirements of law.
Principal and interest payments on the Notes registered in the name of the
Depositary's nominee will be made to the Depositary's nominee as the registered
owner of the Global Note. Under the terms of the Subordinated Indenture, the
Company and the Trustee will treat the persons in whose names the Notes are
registered as the owners of such Notes for the purpose of receiving payment of
principal and
S-3
<PAGE>
interest on such Notes and for all other purposes whatsoever. Therefore,
neither the Company, the Trustee nor any paying agent has any direct
responsibility or liability for the payment of principal or interest on the
Notes to owners of beneficial interests in the Global Note. The Depositary has
advised the Company and the Trustee that its current practice is to credit the
accounts of the participants with payments of principal or interest on the date
payable in amounts proportionate to their respective holdings in principal
amount of beneficial interests in the Global Note as shown in the records of
the Depositary, unless the Depositary has reason to believe that it will not
receive payment on such date. The Depositary's current practice is to credit
such accounts, as to interest, in next-day funds and, as to principal, in same-
day funds. Payments by participants and indirect participants to owners of
beneficial interests in the Global Note will be governed by standing
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 the participants or indirect participants.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
(the "Underwriting Agreement") between the Company and UBS Securities Inc. (the
"Underwriter"), the Underwriter has agreed to purchase from the Company, and
the Company has agreed to sell to the Underwriter at the public offering price
set forth on the cover page of this Prospectus Supplement less the underwriting
discount, all of the Notes.
The Underwriting Agreement provides that the obligations of the Underwriter
are subject to certain conditions precedent and that the Underwriter will be
obligated to purchase all the Notes offered hereby if any Notes are purchased.
The Underwriter proposes to offer the Notes directly to the public initially
at the public offering price set forth on the cover of this Prospectus
Supplement and to certain dealers at such price less a concession not in excess
of 0.35% of the principal amount of the Notes. The Underwriter may allow and
such dealers may reallow a concession not in excess of 0.25% of such principal
amount. After the initial public offering, the offering price and other selling
terms may be changed by the Underwriter.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Underwriter may be required to make
in respect thereof.
The Company has been advised by the Underwriter that the Underwriter
presently intends to make a market in the Notes, as permitted by applicable
laws and regulations. The Underwriter is not obligated, however, to make a
market in the Notes and any such market making may be discontinued at any time
at the sole discretion of the Underwriter. Accordingly, no assurance can be
given as to the liquidity of, or trading markets for, the Notes.
The Underwriter may engage in transactions with and perform services for the
Company and its affiliates in the ordinary course of their respective
businesses, including, without limitation, other investment banking services.
The Company has agreed, with certain limited exceptions, not to offer, sell,
contract to sell or otherwise dispose of debt securities of the Company
substantially similar to the Notes which mature more than one year after the
closing for the offering of the Notes, until the earlier of the completion of
the offering of the Notes or the closing of the offering for the Notes, without
the prior written consent of the Underwriter.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by Paul A.
Immerman, Esq., Senior Counsel of The Bank of New York and for the Underwriter
by Milbank, Tweed, Hadley & McCloy, New York, New York.
S-4
<PAGE>
PROSPECTUS
THE BANK OF NEW YORK COMPANY, INC.
DEBT SECURITIES
PREFERRED STOCK
The Bank of New York Company, Inc. (the "Company") intends to issue from time
to time in one or more series its unsecured debt securities, which may be
either senior (the "Senior Debt Securities") or subordinated (the "Subordinated
Debt Securities," and collectively with the Senior Debt Securities, the "Debt
Securities"), shares of Preferred Stock, no par value (the "No Par Preferred
Stock"), and shares of Class A Preferred Stock, par value $2.00 per share (the
"Class A Preferred Stock" and, together with the No Par Preferred Stock, being
collectively referred to as the "Preferred Stock"). The Preferred Stock may be
issued in the form of depositary shares evidenced by depositary receipts (the
"Depositary Shares"). The Debt Securities and Preferred Stock will have an
aggregate initial offering price not to exceed $1,000,000,000 or the equivalent
thereof in one or more foreign currencies, including composite currencies such
as the European Currency Unit ("ECU"). The Debt Securities, Preferred Stock and
Depositary Shares offered hereby (collectively, with any Common Stock, par
value $7.50 per share (the "Common Stock") or Capital Securities (as defined
below) issuable upon conversion of or in exchange for Preferred Stock, the
"Securities") may be offered, separately or together, in separate series in
amounts, at prices and on terms to be determined at the time of sale and to be
set forth in a supplement to this Prospectus (a "Prospectus Supplement").
The Senior Debt Securities when issued will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company, and the Subordinated
Debt Securities when issued will be subordinated as described herein under
"Description of Debt Securities--Subordination of Subordinated Debt
Securities."
The specific terms of the Securities in respect of which this Prospectus is
being delivered, such as, where applicable (i) in the case of Debt Securities,
the specific designation, aggregate principal amount, denominations, maturity,
premium, if any, rate (which may be fixed or variable) and time of payment of
interest, if any, terms for redemption at the option of the Company or the
holder, if any, terms for sinking or purchase fund payments, if any, currency
or currencies of denomination and payment, if other than U.S. dollars, the
securities exchanges, if any, on which the Debt Securities are to be listed and
any other terms in connection with the offering and sale of the Debt Securities
in respect of which this Prospectus is being delivered, as well as the initial
public offering price, and the principal amounts, if any, to be purchased by
underwriters and (ii) in the case of No Par Preferred Stock or Class A
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 into Capital Securities or other
preferred stock or for exchange for Capital Securities or other Debt
Securities, the securities exchanges, if any, on which such Preferred Stock is
to be listed, the initial public offering price, and the number of shares, if
any, to be purchased by the underwriters, will be as set forth in the
accompanying Prospectus Supplement. The Prospectus Supplement will also contain
information, where applicable, about certain United States federal income tax
considerations relating to the Securities covered by the Prospectus Supplement.
All or a portion of the Debt Securities may be issued in permanent global form.
The Securities may be sold to underwriters for public offering pursuant to
terms of offering fixed at the time of sale. In addition, the Securities may be
sold by the Company directly or through dealers or agents designated from time
to time, which agents may be affiliates of the Company. The Prospectus
Supplement will also set forth with respect to the sale of the Securities in
respect of which this Prospectus is being delivered the names of the
underwriters, dealers or agents, if any, together with the terms of offering,
the compensation of such underwriters and the net proceeds to the Company. Any
underwriters, dealers or agents participating in the offering may be deemed
"underwriters" within the meaning of the Securities Act of 1933 (the
"Securities Act").
----------------
THE SECURITIES WILL BE UNSECURED OBLIGATIONS OF THE COMPANY AND WILL NOT BE
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK
SUBSIDIARY OF THE COMPANY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
THE DATE OF THIS PROSPECTUS IS OCTOBER 8, 1993.
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR THE
PROSPECTUS SUPPLEMENT, AND ANY INFORMATION OR REPRESENTATIONS NOT CONTAINED IN
THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT
IMPLY THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
AVAILABLE INFORMATION
As permitted by the rules and regulations of the Securities and Exchange
Commission (the "SEC"), this Prospectus omits certain information contained in
the Registration Statement of which this Prospectus is a part. For such
information, reference is made to the Registration Statement and the exhibits
thereto. Statements made in this Prospectus as to the contents of any contract,
agreement or other document are not necessarily complete; with respect to each
such contract, agreement or other document filed as an exhibit to the
Registration Statement or incorporated by reference therein, reference is made
to such contract, agreement or other document for a more complete description
of the matter involved, and each such statement is qualified in its entirety by
such reference. In addition, the Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy and information
statements and other information with the SEC. The Registration Statement and
such reports, proxy and information statements and other information may be
inspected and copied at prescribed rates at the Public Reference Room of the
SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional
offices at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and Seven World Trade Center, 13th floor, New York, New
York 10048. Such reports, proxy and information statements and other
information concerning the Company can also be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, on
which exchange securities of the Company are listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into the Prospectus the
following documents:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, as amended by Amendment No. 1 on Form 8, filed April 2,
1993;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1993, and June 30, 1993; and
(3) The Company's Current Reports on Form 8-K filed January 15, 1993,
January 29, 1993, April 5, 1993, April 15, 1993, April 30, 1993, June 4,
1993, June 15, 1993, June 22, 1993, July 14, 1993, August 12, 1993 and
September 16, 1993.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering of the Securities hereunder are hereby incorporated
by reference in this Prospectus and shall be deemed a part hereof from the date
of the filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated herein by reference shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon request of any such person, a copy of all or any
of the foregoing documents incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference into such documents). Requests for such copies should be directed
to The Bank of New York Company, Inc., 48 Wall Street, New York, New York
10286, Attention: Jacqueline R. McSwiggan, Assistant Secretary, telephone
number (212) 495-1727.
2
<PAGE>
THE COMPANY
The Company is a bank holding company subject to the Bank Holding Company Act
of 1956, as amended. Its principal wholly-owned banking subsidiaries are The
Bank of New York (the "Bank"), The Bank of New York (Delaware) and The Bank of
New York National Association ("BNYNA"). The Company provides a complete range
of banking and other financial services to corporations and individuals
worldwide through five basic businesses: Corporate Banking, Retail Banking,
Securities Processing, Trust and Investment Management and Financial Market
Services. At June 30, 1993, the Company had consolidated total assets of
approximately $41.0 billion, consolidated total deposits of approximately $27.8
billion and consolidated shareholders' equity of approximately $3.6 billion. On
the basis of consolidated total assets at June 30, 1993, the Company was the
sixteenth largest bank holding company in the United States.
The Bank, which was founded in 1784, was New York's first bank and is the
oldest in the country still operating under its original name. The Bank is a
state-chartered New York banking corporation and a member of the Federal
Reserve System. Based on assets at June 30, 1993, the Bank ranked as the tenth
largest bank in the United States. At June 30, 1993, the Bank had 291 offices
in the State of New York and 23 branches and representative offices overseas.
The Bank conducts a national and international wholesale banking business and a
retail banking business in the metropolitan New York City area, and provides a
comprehensive range of corporate and personal trust, securities processing and
investment services.
The Bank of New York (Delaware), a Delaware chartered insured non-member
bank, began operations in late 1983. As of December 31, 1992, it was the
seventh largest issuer of bank credit cards in the United States. It also
provides selected banking services to corporations, primarily in the mid-
Atlantic states.
On August 11, 1993 the Company acquired National Community Banks, Inc.
("NCB"), headquartered in West Paterson, New Jersey. The merger was accounted
for by the pooling-of-interests method. At June 30, 1993, NCB had consolidated
total assets of approximately $4.1 billion, consolidated total deposits of
approximately $3.7 billion and consolidated shareholders' equity of
approximately $254 million. The 10,730,668 outstanding shares of NCB's common
stock were converted into approximately 10,300,000 shares of the Company's
Common Stock, and the 1,149,750 outstanding shares of NCB preferred stock were
converted into an equivalent amount of the Company's Class A Preferred Stock.
Restated financial statements of the Company reflecting the acquisition of NCB
are included in the Company's Current Report on Form 8-K filed September 16,
1993.
BNYNA is the banking subsidiary of NCB. BNYNA conducts a full service
commercial banking business in New Jersey focusing on consumers and small to
mid-sized businesses with annual sales of $1 million to $25 million.
The Company has its principal executive offices at 48 Wall Street, New York,
New York 10286, telephone number (212) 495-1784.
CERTAIN REGULATORY CONSIDERATIONS
The Company is a legal entity separate and distinct from its insured banks
and other subsidiaries. There are various legal limitations on the extent to
which these banks and other subsidiaries can finance or otherwise supply funds
to the Company and certain of its affiliates.
3
<PAGE>
DIVIDENDS
The Bank is subject to dividend limitations under the Federal Reserve Act and
the New York Banking Law. BNYNA is subject to dividend limitations under the
National Bank Act. Under these statutes, prior regulatory approval is required
for a bank to pay dividends (i) in any year that would exceed net profits to
date for such year combined with retained net profits for the prior two years
or (ii) in an amount greater than "undivided profits then on hand" less "bad
debts" (generally loans six months or more past due).
Under the first of these two standards, in 1993 the Bank can declare
dividends of $225 million plus net profits earned in 1993 and BNYNA can declare
dividends of $17 million plus net profits earned in 1993. As of June 30, 1993,
neither bank was restrained from paying dividends under the second of these two
standards. BNYNA has agreed with the Comptroller of the Currency that its
dividend payout ratio for any quarter will not exceed 50% of net income, and
that it will provide the Comptroller of the Currency with advance notification
of any dividend declaration if its leverage ratio is less than 6%. As of June
30, 1993, BNYNA's leverage ratio was 6.29%.
In addition to these statutory tests, each bank's primary federal regulator
(the Federal Reserve Board, in the case of the Bank, and the Comptroller of the
Currency, in the case of BNYNA) could prohibit a dividend by such bank if such
regulator determined that the payment would constitute an unsafe or unsound
banking practice. Bank regulators have indicated that, generally, banks should
pay dividends only to the extent of earnings from continuing operations.
The dividend policy of The Bank of New York (Delaware) is to declare
dividends that, at a minimum, allow it to meet capital guidelines established
by the Federal Deposit Insurance Corporation ("FDIC").
Consistent with its policy regarding bank holding companies serving as a
source of financial strength for their subsidiary banks, the Federal Reserve
Board has stated that, as a matter of prudent banking, a bank holding company
generally should not maintain a rate of cash dividends unless its net income
available to common stockholders has been sufficient to fund fully the
dividends, and the prospective rate of earnings retention appears consistent
with the bank holding company's capital needs, asset quality and overall
financial condition. In the first six months of 1993, the Company's net income
available to common stockholders was $243 million and it declared common stock
dividends totaling $62 million.
CAPITAL
Bank regulators have adopted risk-based capital guidelines for bank holding
companies and banks. The minimum ratio of qualifying total capital to risk-
weighted assets (including certain off-balance sheet items, such as standby
letters of credit) is 8%. At least half of the total capital is to be comprised
of common stock, retained earnings, noncumulative perpetual preferred stocks,
minority interests and for bank holding companies, a limited amount of
qualifying cumulative perpetual preferred stock, less certain intangibles
including goodwill ("Tier I capital"). The remainder ("Tier II capital") may
consist of other preferred stock, certain other instruments, and limited
amounts of subordinated debt and the loan and lease loss allowance.
In addition, the Federal Reserve Board has established minimum Leverage Ratio
(Tier I capital to average total assets) guidelines for bank holding companies
and banks. These guidelines provide for a minimum leverage ratio of 3% for bank
holding companies and banks that meet certain specified criteria, including
that they have the highest regulatory rating. All other banking organizations
will be required to maintain a leverage ratio of 3% plus an additional cushion
of at least 100 to 200 basis points. The guidelines also provide that banking
organizations experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels, without significant reliance on intangible assets.
Furthermore, the guidelines indicate that the 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 Tier I capital,
less intangibles not deducted from Tier I capital, to average total assets. The
Federal Reserve Board has not advised the Company of any specific minimum
leverage ratio applicable to it.
4
<PAGE>
Federal banking agencies have proposed regulations that would modify existing
rules related to risk-based and leverage capital ratios. The Company does not
believe that the aggregate impact of these modifications would have a
significant impact on its capital position.
Bank regulators continue to indicate their desire to raise capital
requirements applicable to banking organizations beyond their current levels.
However, management is unable to predict whether and when higher capital
requirements would be imposed and, if so, at what level and on what schedule.
Certain consolidated ratios of the Company are included in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993, and ratios
restated for the merger with NCB are included in the Company's Current Report
on Form 8-K filed September 16, 1993.
FDICIA
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"),
which was enacted in December 1991, substantially revised the depository
institution regulatory and funding provisions of the Federal Deposit Insurance
Act ("FDIA") and made revisions to several other federal banking statutes.
Among other things, FDICIA requires the federal banking regulators to take
prompt corrective action in respect of FDIC-insured depository institutions
that do not meet minimum capital requirements. FDICIA establishes five capital
tiers: "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized." Under
applicable regulations, an FDIC-insured bank is defined to be well capitalized
if it maintains a Leverage Ratio of at least 5%, a risk-adjusted Tier I Capital
Ratio of at least 6% and a Total Capital Ratio of at least 10% and is not
otherwise in a "troubled condition" as specified by its appropriate federal
regulatory agency. A bank is generally considered to be adequately capitalized
if it is not defined to be well capitalized but meets all of its minimum
capital requirements, i.e., 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 a Leverage
Ratio of 4% or greater. A bank will be considered undercapitalized if it fails
to meet any minimum required measure, significantly undercapitalized if it is
significantly below such measure and critically undercapitalized if it
maintains a level of tangible equity capital equal to or less than 2% of total
assets. A bank may be deemed to be in a capitalization category that is lower
than is indicated by its actual capital position if it receives an
unsatisfactory examination rating.
FDICIA generally prohibits an FDIC-insured depository institution from making
any capital distribution (including payment of dividends) or paying any
management fee to its holding company if the depository institution would
thereafter be undercapitalized. Undercapitalized depository institutions will
be subject to restrictions on borrowing from the Federal Reserve System,
effective December 19, 1993. In addition, undercapitalized depository
institutions are subject to growth limitations and are required to submit
capital restoration plans. For an undercapitalized depository institution's
capital restoration plan to be acceptable, its holding company must guarantee
the capital plan up to an amount equal to the lesser of 5% of the depository
institution's assets at the time it becomes undercapitalized or the amount of
the capital deficiency when the institution fails to comply with the plan. In
the event of the parent holding company's bankruptcy, such guarantee would take
priority over the parent's general unsecured creditors. 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 depository institution's capital. If a depository institution
fails to submit an acceptable plan, it is treated as if it is significantly
undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized depository institutions are subject to appointment
of a receiver or conservator.
At June 30, 1993, the Bank, The Bank of New York (Delaware) and BNYNA were
well capitalized. At June 30, 1993, the Bank had a leverage ratio of 6.85%, a
risk-based total capital ratio of 12.04% and a risk-based Tier I capital ratio
of 7.49%; The Bank of New York (Delaware) had a leverage ratio of 7.94%, a
risk-based total capital ratio of 11.48% and a risk-based Tier I capital ratio
of 7.58% and BNYNA had a leverage
5
<PAGE>
ratio of 6.29%, a risk-based total capital ratio of 12.38% and a risk-based
Tier I capital ratio of 11.10%. BNYNA has agreed with the Comptroller of the
Currency that it will maintain a Leverage Ratio of not less than 6%.
Other legislation, including various proposals to revise the bank regulatory
system and limit the investments that a depository institution may make with
insured funds, is from time to time introduced in Congress. Any such
legislation or proposals may have an adverse effect on the Company's earnings.
BROKERED DEPOSITS
The FDIC has adopted regulations under FDICIA governing the receipt of
brokered deposits. Under the regulations, a bank cannot accept a rollover or
renew brokered deposits unless (i) it is well capitalized or (ii) it is
adequately capitalized and receives a waiver from the FDIC. A bank that cannot
receive brokered deposits also cannot offer "pass-through" insurance on certain
employee benefit accounts. Whether or not it has obtained such a waiver, an
adequately capitalized bank may not pay an interest rate on any deposits in
excess of 75 basis points over certain prevailing market rates specified by
regulation. There are no such restrictions on a bank that is well capitalized.
Because the Bank and The Bank of New York (Delaware) were well capitalized as
of June 30, 1993, the Company believes the brokered deposits regulation will
have no material effect on the funding or liquidity of the Bank and The Bank of
New York (Delaware). BNYNA does not accept brokered deposits.
FDIC INSURANCE ASSESSMENTS
The Bank, The Bank of New York (Delaware) and BNYNA are subject to FDIC
deposit insurance assessments. As required by FDICIA, the FDIC has adopted a
risk-based premium schedule which has increased the assessment rates for most
FDIC-insured depository institutions. Under the schedule, the premiums
initially range from $.23 to $.31 for every $100 of deposits. Each financial
institution is assigned to one of three capital groups--well capitalized,
adequately capitalized or undercapitalized-- and further assigned to one of
three subgroups within a capital group, on the basis of supervisory evaluations
by the institution's primary federal and, if applicable, state supervisors and
other information relevant to the institution's financial condition and the
risk posed to the applicable insurance fund. The actual assessment rate
applicable to a particular institution will, therefore, depend in part upon the
risk assessment classification so assigned to the institution by the FDIC.
The FDIC is authorized to raise insurance premiums in certain circumstances.
Any increase in premiums would have an adverse effect on the Company's
earnings.
Under the FDIA, insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe and unsound practices, is in
an unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by a bank's
federal regulatory agency.
DEPOSITOR PREFERENCE
The recently adopted Omnibus Budget Reconciliation Act of 1993 provides for a
national depositor preference on amounts realized from the liquidation or other
resolution of any depository institution insured by the FDIC. That act requires
claims to be paid in the following order of priority: the receiver's
administrative expenses; deposits; other general or senior liabilities of the
institution; obligations subordinated to depositors or general creditors; and
obligations to shareholders. Under an FDIC interim rule, which became effective
August 13, 1993, "administrative expenses of the receiver" are defined as those
incurred by the receiver in liquidating or resolving the affairs of a failed
insured depository institution. The FDIC has requested comments on the interim
rule by October 12, 1993.
FIRREA
A depository institution insured by the FDIC can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC in connection
with (i) the default of a commonly controlled institution
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<PAGE>
or (ii) any assistance provided by the FDIC to a commonly controlled, FDIC-
insured depository institution in danger of default. "Default" is defined
generally as the appointment of a conservator or receiver, and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a "default" is likely to occur in the absence of regulatory assistance.
OTHER
The Federal Reserve Act limits amounts of, and requires collateral on,
extensions of credit by the Company's insured bank subsidiaries to the Company
and, with certain exceptions, its nonbank affiliates; also, there are
restrictions on the amounts of investment by such banks in stock and other
securities of the Company and such affiliates, and restrictions on the
acceptance of their securities as collateral for loans by such banks.
Extensions of credit by insured bank subsidiaries to each of the Company and
such affiliates are limited to 10% of such bank subsidiary's capital and
surplus, and in the aggregate for the Company and all such affiliates to 20%.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement, the Company will use
the net proceeds from the sale of the Securities offered hereby for general
corporate purposes, including investments in, or extensions of credit to, the
Bank and, to a lesser extent, other existing or future subsidiaries. Pending
such use, the net proceeds may be temporarily invested in short-term
obligations. The precise amounts and timing of the application of proceeds used
for general corporate purposes will depend upon funding requirements of the
Company and its subsidiaries and the availability of other funds. The Company
expects, on a recurring basis, to engage in additional financing of a character
and amount to be determined as the need arises.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS
For the last five years and the six-month period ended June 30, 1993, the
consolidated ratios of earnings to fixed charges and earnings to combined fixed
charges and preferred stock dividend requirements of the Company, computed as
set forth below, were as follows:
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ------------------------
1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges
Excluding Interest on Deposits............ 3.48 2.70 1.55 1.53 1.14 2.10
Including Interest on Deposits............ 1.77 1.44 1.10 1.13 1.04 1.24
Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements:
Excluding Interest on Deposits............ 3.05 2.36 1.37 1.44 1.08 1.98
Including Interest on Deposits............ 1.70 1.38 1.07 1.11 1.02 1.22
</TABLE>
- --------
Note: The ratios have been restated to reflect the acquisition of NCB.
For purposes of computing both the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividend requirements,
earnings represent net income (loss) before extraordinary items plus applicable
income taxes and fixed charges. Fixed charges, excluding interest on deposits,
include interest expense (other than on deposits) and the proportion deemed
representative of the interest factor of rent expense, net of income from
subleases. Fixed charges, including interest on deposits, include all interest
expense and the proportion deemed representative of the interest factor of rent
expense, net of income from subleases. Pretax earnings required for preferred
stock dividends were computed using tax rates for the applicable year.
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions. The particular terms of the Debt
Securities offered by any Prospectus Supplement will be described therein. The
Senior Debt Securities are to be issued under an Indenture, dated as of July
18, 1991 (the "Senior Indenture"), between the Company and Bankers Trust
Company, as Trustee (the "Senior Trustee"). The Subordinated Debt Securities
are to be issued under an Indenture, dated as of October 1, 1993, (the
"Subordinated Indenture"), between the Company and NationsBank of Georgia,
National Association, as Trustee (the "Subordinated Trustee"). The Senior
Indenture is incorporated as an exhibit to the Registration Statement of which
this Prospectus is a part by reference to the Company's Registration Statement
on Form S-3 (No. 33-51984) and the Subordinated Indenture is an exhibit to the
Registration Statement of which this Prospectus is a part. The two Indentures
are sometimes referred to collectively as the "Indentures," and the two
Trustees are sometimes referred to collectively as the "Trustees." The
following summaries of certain provisions of the Senior Debt Securities, the
Subordinated Debt Securities and the Indentures do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
the provisions of the Indenture applicable to a particular series of Debt
Securities (the "Applicable Indenture"), including the definitions therein of
certain terms. Wherever particular sections, articles or defined terms of the
Indentures are referred to, it is intended that such sections, articles or
defined terms shall be incorporated herein by reference. Section and article
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.
GENERAL
The Indentures do not limit the aggregate principal amount of the Debt
Securities or of any particular series of Debt Securities which may be issued
thereunder and provide that Debt Securities may be issued from time to time in
series. The Senior Debt Securities will be unsecured and unsubordinated
obligations of the Company. The Subordinated Debt Securities will be unsecured
subordinated obligations of the Company.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for a description of the following
terms or additional provisions of the Debt Securities: (1) the title of the
Debt Securities; (2) whether the Debt Securities are Senior Debt Securities or
Subordinated Debt Securities; (3) any limit on the aggregate principal amount
of the Debt Securities; (4) the price (expressed as a percentage of the
aggregate principal amount thereof) at which the Debt Securities will be
issued; (5) the Person to whom any interest on a Debt Security of such series
will be payable, if other than the Person in whose name that Debt Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest; (6) the date or dates on which the
principal of the Debt Securities will be payable; (7) the rate or rates (or the
formula pursuant to which such rate or rates shall be determined) per annum at
which the Debt Securities will bear interest, if any; (8) the date or dates
from which any such interest will accrue and the dates on which such payment of
any such interest will be payable and the record dates for such interest
payment dates; (9) the place or places where the principal of (and premium, if
any) and interest on the Debt Securities of a series shall be payable; (10) the
period or periods within which, the price or prices at which, and the terms and
conditions upon which, the Debt Securities may be redeemed in whole or in part,
at the option of the Company; (11) the obligation, if any, of the Company to
redeem, repay, or purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a Holder thereof and the period or
periods within which, the price or prices at which, and the terms and
conditions upon which, such Debt Securities shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation; (12) the
denominations in which such Debt Securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof; (13) the currency or
currencies in which payment of principal and premium, if any, and interest on
the Debt Securities will be payable, if other than United States dollars; (14)
if the principal of (and premium, if any) or interest, if any, on such Debt
Securities is to be payable, at the election of the Company or a Holder
thereof, in a currency or currencies other than that in which such Debt
Securities are stated to be payable, the currency or currencies in which
payment of the principal of (and premium, if any) or interest, if any, on such
Debt
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<PAGE>
Securities as to which such election is made will be payable, and the period or
periods within which, and the terms and conditions upon which, such election
may be made; (15) the index, if any, with reference to which the amount of any
payment of principal of (and premium, if any) or interest on the Debt
Securities will be determined; (16) the portion of the principal amount of such
Debt Securities which will be payable upon declaration of acceleration of the
Maturity thereof, if other than the principal amount thereof; (17) any
additional Events of Default or, in the case of Subordinated Debt Securities,
Default, solely with respect to the Debt Securities; (18) whether the
provisions of the Applicable Indenture described under "Defeasance and Covenant
Defeasance" will be applicable to such Debt Securities; (19) whether any of the
Debt Securities are to be issuable in permanent global form; (20) any
additional restrictive covenants included solely for the benefit of the Debt
Securities; (21) if the Debt Securities are Subordinated Debt Securities,
whether the provisions in the Subordinated Indenture described under
"Subordination of Subordinated Debt Securities" or other subordination
provisions will be applicable to such Subordinated Debt Securities; and (22)
any additional terms of the Debt Securities not inconsistent with the
provisions of the Applicable Indenture. (Sections 301 and 901). With respect to
Debt Securities sold through underwriters or agents, the maturities and
interest rates of such Debt Securities may be fixed by the Company from time to
time, in which case such maturities and rates will not be set forth in the
Prospectus Supplement relating thereto.
Unless otherwise provided in the Prospectus Supplement relating thereto,
principal of (and premium, if any) and interest on the Debt Securities will be
payable, and the Debt Securities will be exchangeable and transfers thereof
will be registrable, at the office or agency of the Bank in the Borough of
Manhattan, The City of New York, except that, at the option of the Company,
interest may be paid by mailing a check to the address of the Person entitled
thereto as it appears in the Security Register. (Sections 202, 305 and 1002).
Unless otherwise indicated in the Prospectus Supplement relating thereto, the
Debt Securities will be issued only in registered form without coupons and in
denominations of $1,000 and integral multiples thereof. (Section 302). No
service charge will be made for any transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. (Section
305). The Indentures also provide that the Debt Securities of any series, if so
specified with respect to a particular series, may be issued in permanent
global form. See "Permanent Global Debt Securities."
Debt Securities may be issued as Original Issue Discount Debt Securities to
be sold at a substantial discount below their principal amount. Special Federal
income tax, accounting and other considerations applicable thereto will be
described in the Prospectus Supplement relating thereto. "Original Issue
Discount Debt Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon the declaration of
acceleration of the maturity thereof upon the occurrence and continuance of an
Event of Default. (Section 101).
If the Debt Securities are denominated in whole or in part in any currency
other than United States dollars, if the principal of (and premium, if any) or
interest, if any, on the Debt Securities are to be payable at the election of
the Company or a Holder thereof, in a currency or currencies other than that in
which such Debt Securities are to be payable, or if any index is used to
determine the amount of payments of principal of, premium, if any, or interest
on any series of the Debt Securities, special Federal income tax, accounting
and other considerations applicable thereto will be described in the Prospectus
Supplement relating thereto.
Because the Company is a holding company, its rights and the rights of its
creditors, including the Holders of the Debt Securities, to participate in the
assets of any Subsidiary upon the latter's liquidation or recapitalization will
be subject to the prior claims of the Subsidiary's creditors (including, in the
case of the Bank, The Bank of New York (Delaware) and BNYNA, their depositors),
except to the extent that the Company may itself be a creditor with recognized
claims against the Subsidiary. See also "The Company" and "Certain Regulatory
Considerations."
The Indentures do not contain any provisions that would provide protection to
Holders of the Debt Securities against a sudden and dramatic decline in credit
quality of the Company resulting from any takeover, recapitalization or similar
restructuring.
9
<PAGE>
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The payment of the principal of and interest on the Subordinated Debt
Securities will, to the extent set forth in the Subordinated Indenture, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Subordinated Indenture). In certain events of
insolvency, the payment of the principal of and interest on the Subordinated
Debt Securities will, to the extent set forth in the Subordinated Indenture,
also be effectively subordinated in right of payment to the prior payment in
full of all Other Financial Obligations (as defined in the Subordinated
Indenture). Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy, insolvency or
similar proceedings of the Company, the holders of all Senior Indebtedness will
first be entitled to receive payment in full of all amounts due or to become
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment in respect of the principal of or interest on
the Subordinated Debt Securities. If upon any such payment or distribution of
assets to creditors, there remain, after giving effect to such subordination
provisions in favor of the holders of Senior Indebtedness, any amounts of cash,
property or securities available for payment or distribution in respect of
Subordinated Debt Securities (as defined in the Subordinated Indenture, "Excess
Proceeds") and if, at such time, any Entitled Persons in respect of Other
Financial Obligations have not received payment in full of all amounts due or
to become due on or in respect of such Other Financial Obligations, then such
Excess Proceeds shall first be applied to pay or provide for the payment in
full of such Other Financial Obligations before any payment or distribution may
be made in respect of the Subordinated Debt Securities. In the event of the
acceleration of the maturity of any Debt Securities, the holders of all Senior
Indebtedness will first be entitled to receive payment in full of all amounts
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment upon the principal of or interest on the
Subordinated Debt Securities. No payments on account of principal of or
interest on the Subordinated Debt Securities or on account of the purchase or
acquisition of Subordinated Debt Securities may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or if any judicial proceeding shall be pending with respect to
any such default. (Article Thirteen of the Subordinated Indenture).
By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of insolvency, creditors of the Company who are not
holders of Senior Indebtedness or of the Subordinated Debt Securities may
recover less, ratably, than Holders of Senior Indebtedness and may recover
more, ratably, than the Holders of the Subordinated Debt Securities. By reason
of the obligation of the Holders of Subordinated Debt Securities to pay over
any Excess Proceeds to Entitled Persons in respect of Other Financial
Obligations, in the event of insolvency, holders of Existing Subordinated
Indebtedness (as defined in the Subordinated Indenture) may recover less,
ratably, than Entitled Persons in respect of Other Financial Obligations and
may recover more, ratably, than the Holders of Subordinated Debt Securities.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Senior
Indebtedness is defined in the Subordinated Indenture as (a) the principal of
(and premium, if any), and interest on all indebtedness of the Company for
money borrowed, whether outstanding on the date of execution of the
Subordinated Indenture or thereafter created, assumed or incurred, except (i)
such indebtedness as is by its terms expressly stated to be junior in right of
payment to the Subordinated Debt Securities and (ii) such indebtedness as is by
its terms expressly stated to rank pari passu with the Subordinated Debt
Securities and (b) any deferrals, renewals or extensions of any such Senior
Indebtedness; provided, however, that Senior Indebtedness shall not include
Existing Subordinated Indebtedness. (Section 101 of the Subordinated
Indenture). The term "indebtedness for money borrowed" when used with respect
to the Company is defined to mean any obligation of, or any obligation
guaranteed by, the Company for the repayment of borrowed money, whether or not
evidenced by bonds, debentures, notes or other written instruments, and any
deferred obligation of, or any such obligation guaranteed by, the Company for
the payment of the purchase price of property or assets. (Section 101 of the
Subordinated Indenture).
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<PAGE>
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Existing
Subordinated Indebtedness means the Company's $200,000,000 Floating Rate
Subordinated Capital Notes due 1997, $250,000,000 7 1/2% Convertible
Subordinated Debentures due 2001, $350,000,000 7 5/8% Subordinated Notes due
2002, $250,000,000 7 7/8% Subordinated Notes due 2002 and $300,000,000 6 5/8%
Subordinated Notes due 2003 and Irving Bank Corporation's $200,000,000 Floating
Rate Subordinated Capital Notes due May 1997 assumed by the Company. (Section
101 of the Subordinated Indenture).
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Other
Financial Obligations means all obligations of the Company to make payment
pursuant to the terms of financial instruments, such as (i) securities
contracts and foreign currency exchange contracts, (ii) derivative instruments,
such as swap agreements (including interest rate and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange rate agreements, options, commodity futures
contracts, commodity option contracts and (iii) in the case of both (i) and
(ii) above, similar financial instruments, other than (A) obligations on
account of Senior Indebtedness and (B) obligations on account of indebtedness
for money borrowed ranking pari passu with or subordinate to the Subordinated
Debt Securities. Unless otherwise specified in the Prospectus Supplement
relating to the particular series of Subordinated Debt offered thereby,
Entitled Persons means any person who is entitled to payment pursuant to the
terms of Other Financial Obligations. (Section 101 of the Subordinated
Indenture).
Indebtedness of the Company senior to the Subordinated Debt Securities, at
June 30, 1993, totalled approximately $800,748,000 (which amount would be the
same on a pro forma basis assuming the NCB acquisition had occurred on June 30,
1993).
The Company's obligations under the Subordinated Debt Securities shall rank
pari passu in right of payment with each other and with the Existing
Subordinated Indebtedness, subject to the obligations of the Holders of
Subordinated Debt Securities to pay over any Excess Proceeds to Entitled
Persons in respect of Other Financial Obligations as provided in the
Subordinated Indenture.
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Indebtedness, which may include indebtedness that is senior
to the Subordinated Debt Securities, but subordinate to other obligations of
the Company, including obligations of the Company in respect of Other Financial
Obligations. The Senior Debt Securities, when issued, will constitute Senior
Indebtedness.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
PERMANENT GLOBAL DEBT SECURITIES
If any Debt Securities of a series are to be issued in permanent global form,
the Prospectus Supplement relating thereto will describe the circumstances, if
any, under which beneficial owners of interests in any such permanent global
Debt Security may exchange such interests for Debt Securities of such series
and of like tenor and principal amount in any authorized form and denomination.
Principal of and any premium and interest on a permanent global Debt Security
will be payable in the manner described in the Prospectus Supplement relating
thereto. (Section 204).
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide, if such provision is made applicable to the Debt
Securities of any series pursuant to Section 301 of the Applicable Indenture
(which will be indicated in the Prospectus Supplement applicable
11
<PAGE>
thereto), that the Company may elect either (A) to defease and be discharged
from any and all obligations with respect to such Debt Securities then
outstanding (including, in the case of Subordinated Debt Securities, the
provisions described under "Subordination of Subordinated Debt Securities" and
except for the obligations to register the transfer or exchange of such Debt
Securities, to replace temporary or mutilated, destroyed, lost or stolen Debt
Securities, to maintain an office or agency in respect of the Debt Securities
and to hold moneys for payment in trust) ("defeasance") or (B) to be released
from its obligations with respect to such Debt Securities then outstanding
under Section 1005 and Section 1006 of the Senior Indenture and only Section
1005 of the Subordinated Indenture (and any other sections applicable to such
Debt Securities that are determined pursuant to Section 301 to be subject to
covenant defeasance), the occurrence of an event of default specified in, in
the case of Senior Debt Securities, Section 501(4) of the Senior Indenture, and
in the case of Subordinated Debt Securities, Section 503(C) of the Subordinated
Indenture (with respect to Section 1005 and Section 1006 of the Senior
Indenture and Section 1005 of the Subordinated Indenture or any other section
applicable to such Debt Securities that are determined pursuant to Section 301
to be subject to covenant defeasance), or, in the case of Senior Debt
Securities, Section 501(5) of the Senior Indenture, and in the case of
Subordinated Debt Securities, Section 503(D) of the Subordinated Indenture,
(Section 1005 of the Indentures containing the covenant to pay taxes and other
claims, Section 1006 of the Senior Indenture containing the restrictions
described under "Limitation on Disposition of Stock of the Bank" and Sections
501(4) and 501(5) of the Senior Indenture and Sections 503(C) and 503(D) of the
Subordinated Indenture containing the provisions described under "Defaults"
relating to covenant defaults and cross-defaults, respectively) and, in the
case of Subordinated Debt Securities, the provisions described under
"Subordination of Subordinated Debt Securities" ("covenant defeasance"), upon
the deposit with the Senior Trustee or Subordinated Trustee (or other
qualifying trustee), in trust for such purpose, of money, and/or U.S.
Government Obligations which through the payment of principal and interest in
accordance with their terms will provide money, in an amount sufficient,
without reinvestment, to pay the principal of (and premium, if any) and
interest on such Debt Securities to maturity or redemption, as the case may be,
and any mandatory sinking fund or analogous payments thereon. As a condition to
defeasance or covenant defeasance, the Company must deliver to the Senior
Trustee or Subordinated Trustee an Opinion of Counsel (as specified in the
Applicable Indenture) to the effect that the Holders of such Debt Securities
will not recognize income, gain or loss for Federal income tax purposes as a
result of such defeasance or covenant defeasance and will be subject to 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. Such opinion, in the case of defeasance under clause (A) above, must
refer to and be based upon a ruling of the Internal Revenue Service issued to
the Company or published as a revenue ruling or upon a change in applicable
Federal income tax law, in any such case after the date of the Applicable
Indenture.
Under current Federal income tax law, defeasance would likely be treated as a
taxable exchange of such Debt Securities for interests in the defeasance trust.
As a consequence a Holder would recognize gain or loss equal to the difference
between the Holder's cost or other tax basis for such Debt Securities and the
value of the Holder's proportionate interest in the defeasance trust, and
thereafter would be required to include in income a proportionate share of the
income, gain and loss of the defeasance trust. Under current Federal income tax
law, covenant defeasance would ordinarily not be treated as a taxable exchange
of such Debt Securities. Purchasers of such Debt Securities should consult
their own advisors with respect to the tax consequences to them of such
defeasance and covenant defeasance, including the applicability and effect of
tax laws other than the Federal income tax law.
The Company may exercise its defeasance option with respect to such Debt
Securities notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its defeasance option, payment of such Debt
Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of such Debt
Securities may not be accelerated by reference to the covenants noted under
clause (B) above. However, if such an acceleration were to occur, the
realizable value at the acceleration date of the money and U.S. Government
Obligations in the defeasance trust could be less than the principal and
interest then due on such Debt Securities, in that the required deposit in the
defeasance
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trust is based upon scheduled cash flows rather than market value, which will
vary depending upon interest rates and other factors. (Article 13 and Article
14 of the Senior Indenture and the Subordinated Indenture, respectively).
The Prospectus Supplement may further describe the provisions, if any,
applicable to defeasance or covenant defeasance with respect to the Debt
Securities of a particular series.
LIMITATION ON DISPOSITION OF STOCK OF THE BANK OF NEW YORK
The Senior Indenture contains a covenant by the Company that, so long as any
of the Senior Debt Securities issued pursuant to it are Outstanding, but
subject to the rights of the Company in connection with its consolidation with
or merger into another Person or a sale of the Company's assets, neither the
Company nor any Intermediate Subsidiary will sell, assign, transfer, grant a
security interest in or otherwise dispose of any shares of, or securities
convertible into, or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of the Bank (except to the Company or an Intermediate
Subsidiary), nor will the Company or any Intermediate Subsidiary permit the
Bank to issue any shares of, or securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of, Voting Stock of the
Bank, unless (a) any such sale, assignment, transfer, grant of a security
interest or other disposition is made for fair market value, as determined by
the Board of Directors of the Company or any Intermediate Subsidiary, and (b)
the Company and any one or more Intermediate Subsidiaries will collectively own
at least 80% of the issued and outstanding Voting Stock of the Bank (or any
successor to the Bank) free and clear of any security interest after giving
effect to such transaction. The foregoing, however, shall not preclude the Bank
from being consolidated with or merged into another domestic banking
corporation, if after such merger or consolidation the Company, any successor
thereto in a permissible merger, or any one or more Intermediate Subsidiaries
own at least 80% of the Voting Stock of the resulting bank and immediately
after giving effect thereto no Event of Default and no event which would become
an Event of Default shall have occurred and be continuing. "Intermediate
Subsidiary" is defined in the Senior Indenture as a Subsidiary (i) that is
organized under the laws of any domestic jurisdiction and (ii) of which all the
shares of each class of capital stock issued and outstanding, and all
securities convertible into, and options, warrants and rights to subscribe for
or purchase shares of, such capital stock, are owned directly by the Company,
free and clear of any security interest. The Company will further covenant that
it will not permit any Intermediate Subsidiary that owns any shares of, or
securities convertible into, or options, warrants or rights to subscribe for or
purchase shares of, Voting Stock of the Bank to cease to be an Intermediate
Subsidiary. (Section 1006 of the Senior Indenture).
DEFAULTS
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 for
30 days in payment of interest on any Senior Debt Security of that series; (b)
default in payment of principal of (or premium, if any), on any Senior Debt
Security of that series at Maturity; (c) default in the deposit of any sinking
fund payment, when and as due by the terms of a Senior Debt Security of that
series; (d) failure by the Company for 60 days after due notice in performance
or the breach of any covenant or warranty in the Senior Indenture or any Senior
Debt Security of a particular series (other than a covenant or warranty
included in the Senior Indenture solely for the benefit of a series of Senior
Debt Securities other than that series); (e) (i) failure by the Company or the
Bank to pay indebtedness for money borrowed (including Debt Securities of other
series) in an aggregate principal amount exceeding $25,000,000 at the later of
final maturity or upon the expiration of any applicable period of grace with
respect to such principal amount; or (ii) acceleration of the maturity of any
indebtedness of the Company or the Bank for borrowed money, in excess of
$25,000,000, if such failure to pay or acceleration results from a default
under the instrument giving rise to, or securing, such indebtedness and is not
annulled within 30 days after due notice, unless such default is contested in
good faith by appropriate proceedings; (f) certain events of bankruptcy,
insolvency or reorganization of the Company or the Bank; and (g) any other
Event of Default provided with respect to Senior Debt Securities of that
series. (Section 501).
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If any Event of Default 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 not less than 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 Senior Debt
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all Senior Debt Securities of that series to be due
and payable immediately (provided that no such declaration is required upon
certain events of bankruptcy), but upon certain conditions such declaration may
be annulled and past defaults (except, unless theretofore cured, a default in
payment of principal of (or premium, if any), or interest on the Senior Debt
Securities of that series and certain other specified defaults) may be waived
by the Holders of a majority in principal amount of the Outstanding Senior Debt
Securities of that series on behalf of the Holders of all Senior Debt
Securities of that series. (Sections 502 and 513).
The Subordinated Indenture
The Subordinated Indenture defines an Event of Default with respect to any
series of Subordinated Debt Securities as being certain events involving the
bankruptcy, insolvency or reorganization of the Company. (Section 501). If any
Event of Default with respect to Subordinated Debt Securities of any series at
the time Outstanding occurs and is continuing, either the 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 Subordinated Debt 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 (provided that no
such declaration is required upon certain events of bankruptcy), but upon
certain conditions such declaration may be annulled and past defaults (except,
unless theretofore cured, a default in payment of principal of (or premium, if
any), or interest on the Subordinated Debt Securities of that series and
certain other specified defaults) may be waived by the Holders of a majority in
principal amount of the Outstanding Subordinated Debt Securities of that series
on behalf of the Holders of all Subordinated Debt Securities of that series.
(Sections 502 and 513).
The Subordinated Indenture does not provide for any right of acceleration of
the payment of principal of a series of Subordinated Debt Securities upon a
default in the payment of principal or interest or in the performance of any
covenant or agreement in the Subordinated Debt Securities of the particular
series or in the Subordinated Indenture. The Subordinated Indenture defines a
Default with respect to Subordinated Debt Securities of any series as any one
of the following events: (A) an Event of Default; (B) default for 30 days in
payment of interest on any Subordinated Debt Security of that series; (C)
default in payment of principal of (or premium, if any), on any Subordinated
Debt Security of that series at Maturity; (D) default in the deposit of any
sinking fund payment, when and as due by the terms of a Subordinated Debt
Security of that series; (E) failure by the Company for 60 days after due
notice in performance or the breach of any covenant or warranty in the
Subordinated Indenture or any Subordinated Debt Security of a particular series
(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); (F)(i) failure by the Company or the Bank to pay indebtedness for
money borrowed (including Subordinated Debt Securities of other series) in an
aggregate principal amount exceeding $25,000,000 at the later of final maturity
or upon the expiration of any applicable period of grace with respect to such
principal amount; or (ii) acceleration of the maturity of any indebtedness of
the Company or the Bank for borrowed money in excess of $25,000,000, if such
failure to pay or acceleration results from a default under the instrument
giving rise to, or securing, such indebtedness and is not annulled within 30
days after due notice, unless such default is contested in good faith by
appropriate proceedings; and (G) any other Default with respect to Subordinated
Debt Securities of that series. In case a Default shall occur and be
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders by appropriate judicial proceedings as
the Trustee deems most effectual. (Section 503).
Senior and Subordinated Indentures
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Debt Securities for
the particular provisions relating to acceleration of the
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Maturity of a portion of the principal amount of such Original Issue Discount
Debt Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Indentures provide that the Senior Trustee or Subordinated Trustee will,
within 90 days after the occurrence of a default with respect to Debt
Securities of any series at the time Outstanding with respect to which it is
trustee, give to the Holders of the Outstanding Debt Securities of that series
notice of such default known to it if uncured or not waived, provided that,
except in the case of default in the payment of principal of (or premium, if
any), or interest on any Debt Security of that series, or in the payment of any
sinking fund instalment which is provided, such Trustee will be protected in
withholding such notice if such Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of the Outstanding
Debt Securities of such series; and, provided further, that such notice shall
not be given until 60 days after the occurrence of a default with respect to
Outstanding Debt Securities of any series in the performance or breach of a
covenant in the Applicable Indenture other than for the payment of the
principal of (or premium, if any), or interest on any Debt Security of such
series or the deposit of any sinking fund payment with respect to the Debt
Securities of such series. The term default with respect to any series of
Outstanding Debt Securities for the purpose only of this provision means the
happening of any of the Events of Default or, in the case of the Subordinated
Indenture, Defaults, specified in the Applicable Indenture and relating to such
series of Outstanding Debt Securities. (Section 602).
The Indentures provide that, subject to the duty of the Trustees during
default to act with the required standard of care, the Trustees will not be
under an obligation to exercise any of their rights or powers under the
Indentures at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustees reasonable security or indemnity.
(Sections 601 and 603). The Indentures provide that the Holders of a majority
in principal amount of Outstanding Debt Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee for that series, or exercising any trust or other power conferred
on such Trustee, provided that such Trustee may decline to act if such
direction is contrary to law or the Applicable Indenture and may take any other
action deemed proper which is not inconsistent with such direction. (Section
512).
The Indentures include a covenant that the Company will file annually with
the Trustees a certificate of no default, or specifying any default that
exists. (Section 1007 of the Senior Indenture and Section 1004 of the
Subordinated Indenture).
MODIFICATION OF THE INDENTURES
Modification and amendments of each of the Senior Indenture and the
Subordinated Indenture may be made by the Company and the Trustee under the
Applicable Indenture, only with the consent of the Holders of not less than a
majority in principal amount of each series of Outstanding Debt Securities
issued under such Indenture and affected thereby, by executing supplemental
indentures adding any provisions to or changing or eliminating any of the
provisions of the Applicable Indenture or modifying the rights of the Holders
of Outstanding Debt Securities of such series (including the modification of
the subordination provisions in a manner adverse to Holders in the case of the
Subordinated Indenture), except that no such supplemental indenture may (a)
change the Stated Maturity of the principal of, or any instalment of principal
of or interest on, any Debt Security; (b) reduce the principal amount of, or
any premium or the rate of interest on, any Debt Security; (c) reduce the
amount of principal of an Original Issue Discount Security payable upon
acceleration of the Maturity thereof; (d) adversely affect any right of
repayment at the option of the Holder of any Debt Security; (e) reduce the
amount of, or postpone the date fixed for, the payment of any sinking fund or
analogous obligation; (f) change the place or currency of payment of principal
of (or premium, if any) or interest on, any Debt Security; (g) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Debt Security on or after the Stated Maturity (or, in the case of redemption,
on or after the Redemption Date); (h) reduce the percentage in principal amount
of Outstanding Debt Securities of any series, the consent of the Holders of
which is required for modification or amendment of the Applicable Indenture,
for waiver of compliance with certain provisions of the Applicable Indenture or
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for waiver of certain covenant defaults; (i) modify the provisions of the
Applicable Indenture relating to modification and amendment of the Applicable
Indenture; or (j) in the case of the Subordinated Indenture, modify the
subordination provisions adverse to the holders of Senior Indebtedness without
such holders' consent. The Indentures provide, however, that each of the
amendments and modifications listed in clauses (a) through (i) and, in the case
of the Subordinated Indenture, (j) above may be made with the consent of the
Holder of each Outstanding Security affected thereby. (Section 902 of the
Indentures and Section 907 of the Subordinated Indenture).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Debt Securities
under the Indentures, may consolidate with or merge into any other Person or
convey, transfer or lease its assets substantially as an entirety to any
Person, or, in the case of the Subordinated Indenture, permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties substantially as an entirety to the Company, provided that: (i) if
applicable, the successor is a Person, organized under the laws of any domestic
jurisdiction; (ii) the successor Person, if other than the Company, assumes the
Company's obligations on the Debt Securities and under the Indentures; (iii)
after giving effect to the transaction no Event of Default, or, in the case of
the Subordinated Indenture, Default, and no event which, after notice or lapse
of time, would become an Event of Default, or, in the case of the Subordinated
Indenture, Default, shall have occurred and be continuing; and (iv) certain
other conditions are met. (Section 801). Upon any consolidation or merger into
any other Person or any conveyance, transfer or lease of the Company's assets
substantially as an entirety to any Person, the successor Person shall succeed
to, and be substituted for, the Company under the Indentures, and the Company,
except in the case of a lease, shall be relieved of all obligations and
covenants under the Indentures and the Debt Securities to the extent it was the
predecessor Person.
OUTSTANDING DEBT SECURITIES
The Indentures provide that, in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver under the
Applicable Indenture, (i) the portion of the principal amount of an Original
Issue Discount Debt Security that shall be deemed to be Outstanding for such
purposes shall be that portion of the principal amount thereof that would be
due and payable as of the date of such determination upon the declaration of
acceleration of the maturity thereof upon the occurrence and continuance of an
Event of Default, (ii) the portion of the principal amount of a Debt Security
denominated in a foreign currency or currencies that shall be deemed to be
Outstanding for such purpose shall be the U.S. dollar equivalent, determined on
the date of original issuance of such Debt Security, of the principal amount of
such Debt Security (or, in the case of an Original Issue Discount Debt
Security, the U.S. dollar equivalent on the date of original issuance of such
Debt Security of the amount determined as provided in (i) above), and (iii)
Debt Securities owned by the Company or any of its Affiliates shall not be
deemed to be Outstanding. (Section 101).
CONCERNING THE TRUSTEES
Bankers Trust Company and NationsBank of Georgia, National Association are
the Trustees under the Senior Indenture and the Subordinated Indenture,
respectively. The Company has issued medium-term notes under the Senior
Indenture. Bankers Trust Company is also trustee under the Indenture, dated as
of November 15, 1986, relating to the Company's 7 3/8% Notes due February 1994.
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DESCRIPTION OF PREFERRED STOCK
The following summary contains a description of certain general terms of the
Company's Preferred Stock to which any Prospectus Supplement may relate.
Certain terms of any series of Preferred Stock offered by any Prospectus
Supplement will be described in the Prospectus Supplement relating thereto. If
so indicated in the Prospectus Supplement, the terms of any series may differ
from the terms set forth below. The description of certain provisions of the
Company's Preferred Stock does not purport to be complete and is subject to and
qualified in its entirety by reference to the provisions of the Company's
Certificate of Incorporation, as amended (the "Certificate"), and the
Certificate of Amendment (the "Certificate of Amendment") relating to each
particular series of Preferred Stock which will be filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement of
which this Prospectus is a part at or prior to the time of the issuance of such
Preferred Stock.
GENERAL
Under the Company's Certificate, the Board of Directors of the Company is
authorized, without further stockholder action, to provide for the issuance of
up to 5,000,000 shares of preferred stock, without par value, (the "No Par
Preferred Stock") and 5,000,000 shares of Class A Preferred Stock, par value
$2.00 per share (the "Class A Preferred Stock" and, together with the No Par
Preferred Stock, being collectively referred to as the "Preferred Stock"). The
No Par Preferred Stock and Class A Preferred Stock may be issued in one or more
series, with such designations of titles; dividend rates; special or relative
rights in the event of liquidation, distribution or sale of assets or
dissolution or winding up of the Company; any sinking fund provisions; any
redemption or purchase account provisions; any conversion provisions; and any
voting rights thereof, as shall be set forth as and when established by the
Board of Directors of the Company. The shares of any series of Preferred Stock
will be, when issued, fully paid and non-assessable and holders thereof will
have no preemptive rights in connection therewith.
The liquidation preference of any series of Preferred Stock is not
necessarily indicative of the price at which shares of such series of Preferred
Stock will actually trade at or after the time of their issuance. The market
price of any series of Preferred Stock can be expected to fluctuate with
changes in market and economic conditions, the financial condition and
prospects of the Company and other factors that generally influence the market
prices of securities.
RANK
Any series of the No Par Preferred Stock or Class A Preferred Stock will,
with respect to dividend rights and rights on liquidation, winding up and
dissolution rank (i) senior to all classes of common stock of the Company and
with all equity securities issued by the Company, the terms of which
specifically provide that such equity securities will rank junior to the No Par
Preferred Stock or Class A Preferred Stock, as the case may be (collectively
referred to as the "Junior Securities"); (ii) on a parity with all equity
securities issued by the Company, the terms of which specifically provide that
such equity securities will rank on a parity with the No Par Preferred Stock or
Class A Preferred Stock, as the case may be, including the Company's Adjustable
Rate Cumulative Preferred Stock, Cumulative Adjustable Rate Preferred Stock,
8.60% Cumulative Preferred Stock and 7.75% Cumulative Convertible Preferred
Stock (collectively referred to as the "Parity Securities"); and (iii) junior
to all equity securities issued by the Company, the terms of which specifically
provide that such equity securities will rank senior to the No Par Preferred
Stock or Class A Preferred Stock, as the case may be (collectively referred to
as the "Senior Securities"). All shares of No Par Preferred Stock and Class A
Preferred Stock will, regardless of series, be of equal rank. As used in any
Certificate of Amendment for these purposes, the term "equity securities" will
not include debt securities convertible into or exchangeable for equity
securities.
DIVIDENDS
Holders of each series of Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors of the Company out of funds
legally available therefor, cash dividends at such rates and on such
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dates as are set forth in the Prospectus Supplement relating to such series of
Preferred Stock. Dividends will be payable to holders of record of Preferred
Stock as they appear on the books of the Company (or, if applicable, the
records of the Depositary referred to below under "Description of Depositary
Shares") on such record dates as shall be fixed by the Board of Directors.
Dividends on any series of Preferred Stock may be cumulative or non-cumulative.
The Company's ability to pay dividends on its Preferred Stock and Common Stock
is subject to policies established by the Federal Reserve Board. See "Certain
Regulatory Considerations--Dividends."
No full dividends may be declared or paid or funds set apart for the payment
of dividends on any Parity Securities unless dividends shall have been paid or
set apart for such payment on the No Par Preferred Stock and Class A Preferred
Stock. If full dividends are not so paid, the No Par Preferred Stock and Class
A Preferred Stock shall share dividends pro rata with the Parity Securities.
CONVERSION
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, on which shares of that series are convertible into shares of
another series of Preferred Stock or Capital Securities. The Capital Securities
of the Company are described below under "Description of Capital Securities."
For any series of Preferred Stock which is convertible, the Company shall at
all times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued No Par Preferred Stock or Class A
Preferred Stock, as the case may be, or Capital Securities or shares held in
its treasury or both, for the purpose of effecting the conversion of the shares
of such series of Preferred Stock, the full number of shares of No Par
Preferred Stock, Class A Preferred Stock or Capital Securities, as the case may
be, then deliverable upon the conversion of all outstanding shares of such
series.
No fractional shares or scrip representing fractional shares of Preferred
Stock or Capital Securities will be issued upon the conversion of shares of any
series of convertible Preferred Stock. Each holder to whom fractional shares
would otherwise be issued will instead be entitled to receive, at the Company's
election, either (a) a cash payment equal to the current market price of such
holder's fractional interest or (b) a cash payment equal to such holder's
proportionate interest in the net proceeds (following the deduction of
applicable transaction costs) from the sale promptly by an agent, on behalf of
such holders, of shares of Preferred Stock or Capital Securities representing
the aggregate of such fractional shares.
The holders of any series of shares of Preferred Stock at the close of
business on a dividend payment record date will be entitled to receive the
dividend payable on such shares (except that holders of shares called for
redemption on a redemption date occurring between such record date and the
dividend payment date shall not be entitled to receive such dividend on such
dividend payment date but instead will receive accrued and unpaid dividends to
such redemption date) on the corresponding dividend payment date
notwithstanding the conversion thereof or the Company's default in payment of
the dividend due. Except as provided above, the Company will make no payment or
allowance for unpaid dividends, whether or not in arrears, on converted shares
or for dividends on the shares of No Par Preferred Stock, Class A Preferred
Stock or Capital Securities issued upon conversion.
EXCHANGEABILITY
The holders of shares of Preferred Stock of any series may be obligated at
any time or at maturity to exchange such shares for Capital Securities or debt
securities of the Company. The terms of any such exchange and any such Capital
Securities or other debt securities will be described in the Prospectus
Supplement relating to such series of Preferred Stock.
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REDEMPTION
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Company or the holder thereof upon terms and at the
redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event of partial redemptions of Preferred Stock, whether by mandatory
or optional redemption, the shares to be redeemed will be determined by lot or
pro rata, as may be determined by the Board of Directors of the Company or by
any other method determined to be equitable by the Board of Directors.
On and after a redemption date, unless the Company defaults in the payment of
the redemption price, dividends will cease to accrue on shares of Preferred
Stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
Under current regulations, bank holding companies may not exercise any option
to redeem shares of preferred stock included as Tier I capital without the
prior approval of the Federal Reserve Board. Ordinarily, the Federal Reserve
Board would not permit such a redemption unless (1) the shares are redeemed
with the proceeds of a sale by the bank holding company of common stock or
perpetual preferred stock or (2) the Federal Reserve Board determines that the
bank holding company's condition and circumstances warrant the reduction of a
source of permanent capital.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of each series of Preferred Stock that ranks senior to the
Junior Securities will be entitled to receive out of assets of the Company
available for distribution to shareholders, before any distribution is made on
any Junior Securities, including Common Stock, distributions upon liquidation
in the amount set forth in the Prospectus Supplement relating to such series of
Preferred Stock, plus an amount equal to any accrued and unpaid dividends. If
upon any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Preferred Stock of any series
and any other Parity Securities are not paid in full, the holders of the
Preferred Stock of such series and the Parity Securities will share ratably in
any such distribution of assets of the Company in proportion to the full
liquidation preferences to which each is entitled. After payment of the full
amount of the liquidation preference to which they are entitled, the holders of
such series of Preferred Stock will not be entitled to any further
participation in any distribution of assets of the Company.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of Preferred Stock or except as expressly required by
applicable law, the holders of shares of Preferred Stock will have no voting
rights.
Under regulations adopted by the Federal Reserve Board, if the holders of
shares of any series of Preferred Stock of the Company become entitled to vote
for the election of directors, 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% if it otherwise exercises a "controlling influence" over the Company) may
then be subject to regulation as a bank holding company in accordance with the
Bank Holding Company Act of 1956, as amended. In addition, at such time as such
series is deemed a class of voting securities, (i) any other bank holding
company may be required to obtain the approval of the Federal Reserve Board to
acquire or retain 5% or more of such series, and (ii) any person other than a
bank holding company may be required to file with the Federal Reserve Board
under the Change in Bank Control Act to acquire or retain 10% or more of such
series.
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PREFERRED STOCK OUTSTANDING
As of the date hereof, the Company has issued and outstanding 3,650,200
shares of No Par Preferred Stock and 1,149,750 shares of Class A Preferred
Stock with an aggregate liquidation preference of $317,053,750. The Company has
outstanding the following series of No Par Preferred Stock: Adjustable Rate
Cumulative Preferred Stock (2,000,000 shares); Cumulative Adjustable Rate
Preferred Stock (1,466,200 shares); and 8.60% Cumulative Preferred Stock
(184,000 shares). The 7.75% Cumulative Convertible Preferred Stock (1,149,750
shares) is the only series of Class A Preferred Stock outstanding. The shares
of outstanding No Par Preferred Stock and Class A Preferred Stock are fully
paid and non-assessable. The Company has also authorized a series of No Par
Preferred Stock in connection with its preferred stock purchase rights plan.
See "Description of Preferred Stock Purchase Rights."
Holders of shares of Adjustable Rate Cumulative Preferred Stock, Cumulative
Adjustable Rate Preferred Stock, 8.60% Cumulative Preferred Stock and 7.75%
Cumulative Convertible Preferred Stock are entitled to cumulative dividends,
when declared by the Company's Board of Directors.
In the event of any voluntary or involuntary liquidation, distribution or
sale of assets, dissolution, or winding up of the Company, the holder of a
share of outstanding Preferred Stock will be entitled to receive prior to any
payment upon the Company's Common Stock, cash in the amount of $50 in the case
of Adjustable Rate Cumulative Preferred Stock and Cumulative Adjustable Rate
Preferred Stock, $625 in the case of 8.60% Cumulative Preferred Stock and $25
in the case of the 7.75% Cumulative Convertible Preferred Stock.
Holders of Adjustable Rate Cumulative Preferred Stock, Cumulative Adjustable
Rate Preferred Stock, 8.60% Cumulative Preferred Stock and 7.75% Cumulative
Convertible Preferred Stock have no general voting rights but have the right to
vote in certain events. Under the terms of the Cumulative Adjustable Rate
Preferred Stock, if and when a default in preference dividends on the
Cumulative Adjustable Rate Preferred Stock exists, the holders of No Par
Preferred Stock of all series, voting separately as a single class, immediately
shall be entitled to elect two members of the Company's Board of Directors.
Under the terms of the Adjustable Rate Cumulative Preferred Stock and 8.60%
Cumulative Preferred Stock, if at the time of any annual meeting of
shareholders for the election of directors a default in preference dividends on
any series of No Par Preferred Stock exists, the number of directors
constituting the Company's Board of Directors shall be increased by two, and
the holders of No Par Preferred Stock of all series shall have the right at
such meeting, voting together as a single class without regard to series, to
the exclusion of the holders of Common Stock, to elect two directors of the
Company to fill such newly created directorships. When an amount equal to at
least six quarterly dividends payable on the 7.75% Cumulative Convertible
Preferred Stock is in arrears, the number of directors of the Company will be
increased by two and the holders of 7.75% Cumulative Convertible Preferred
Stock, voting separately as a class with the holders of any one or more other
series of Preferred Stock of the Company ranking on a parity with the 7.75%
Cumulative Convertible Preferred Stock either as to payment of dividends or
upon liquidation, dissolution or winding up and upon which like voting rights
have been conferred and are exercisable, will be entitled at the next annual
meeting of shareholders of the Company and each subsequent annual meeting of
shareholders to elect two directors to fill such vacancies. In each case, such
right shall continue until there are no dividends in arrears upon the Company's
No Par Preferred Stock or Class A Preferred Stock.
The holders of Adjustable Rate Cumulative Preferred Stock, Cumulative
Adjustable Rate Preferred Stock and 8.60% Cumulative Preferred Stock do not
have any conversion or exchange rights. The shares of Adjustable Rate
Cumulative Preferred Stock and Cumulative Adjustable Rate Preferred Stock are
subject to redemption at the option of the Company. The 8.60% Cumulative
Preferred Stock will be subject to redemption at the option of the Company on
or after December 1, 1997. The 7.75% Cumulative Convertible Preferred Stock
will be redeemable at the option of the Company on or after July 1, 1996 and is
convertible into the Company's Common Stock. The conversion rights of the 7.75%
Cumulative Convertible Preferred Stock will terminate at the close of business
on the tenth day preceding the date fixed for redemption of shares of such
series.
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<PAGE>
The Cumulative Adjustable Rate Preferred Stock and the Depositary Shares
representing interests in the 8.60% Cumulative Preferred Stock are listed on
the NYSE.
The Bank of New York is the Transfer Agent, Registrar and Dividend
Disbursement Agent for the Company's No Par Preferred Stock and Class A
Preferred Stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below 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 Agreement
and Depositary Receipt relating to the Preferred Stock, incorporated as
exhibits to the Registration Statement of which this Prospectus is a part by
reference to the Amendment No. 1 to the Company's Registration Statement on
Form S-3 (No. 33-51984).
GENERAL
The Company may, at its option, elect to offer fractional shares of Preferred
Stock, rather than full shares of Preferred Stock. In the event such option is
exercised, the Company will issue receipts for Depositary Shares, each of which
will represent a fraction (to be set forth in the Prospectus Supplement
relating to a particular series of Preferred Stock) of a share of a particular
series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000 (the "Depositary"). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption, conversion and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional shares
of Preferred Stock in accordance with the terms of the offering. The forms of
Deposit Agreement and Depositary Receipt are incorporated by reference as
exhibits to the Registration Statement of which this Prospectus is a part, and
the following summary is qualified in its entirety by reference to such
exhibits.
Pending the preparation of definitive Depositary Receipts, the Depositary
may, upon the written order of the Company or any holder of deposited Preferred
Stock, execute and deliver temporary Depositary Receipts which are
substantially identical to, and entitle the holders thereof to all the rights
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 at
the Company's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash distributions
received in respect of the deposited Preferred Stock to the record holders of
Depositary Shares relating to such Preferred Stock in proportion to the numbers
of such Depositary Shares owned by such holders.
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<PAGE>
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto. If the Depositary determines that it is not feasible to make
such distribution, it may, with the approval of the Company, sell such property
and distribute the net proceeds from such sale to such holders.
REDEMPTION OR EXCHANGE OF STOCK
If a series of Preferred Stock represented by Depositary Shares is to be
redeemed or exchanged, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of Preferred Stock held by the Depositary, or exchanged for the
Capital Securities or other debt securities to be issued in exchange for the
Preferred Stock (as the case may be, in accordance with the terms of such
series of Preferred Stock). The Depositary Shares will be redeemed or exchanged
by the Depositary at a price per Depositary Share equal to the applicable
fraction of the redemption price per share or market value of Capital
Securities or other debt securities per Depositary Share paid in respect of the
shares of Preferred Stock so redeemed or exchanged. Whenever the Company
redeems or exchanges shares of Preferred Stock held by the Depositary, the
Depositary will redeem or exchange as of the same date the number of Depositary
Shares representing shares of Preferred Stock so redeemed or exchanged. If
fewer than all the Depositary Shares are to be redeemed or exchanged, the
Depositary Shares to be redeemed or exchanged will be selected by the
Depositary by lot or pro rata or by any other equitable method as may be
determined by the Company.
WITHDRAWAL OF STOCK
Any holder of Depositary Shares may, upon surrender of the Depositary
Receipts at the corporate trust office of the Depositary (unless the related
Depositary Shares have previously been called for redemption), receive the
number of whole shares of the related series of Preferred Stock and any money
or other property represented by such Depositary Receipts. Holders of
Depositary Shares making such withdrawals will be entitled to receive whole
shares of Preferred Stock on the basis set forth in the related 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 Receipts therefor.
If the Depositary Shares 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 DEPOSITED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
deposited Preferred Stock are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such series of Preferred Stock. Each record
holder of such Depositary Shares on the record date (which will be the same
date as the record date for the relevant series of Preferred Stock) will be
entitled to instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of the Preferred Stock represented by such holder's
Depositary Shares. The Depositary will endeavor, insofar as practicable, to
vote the amount of such series of Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and the Company 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 Shares representing
such Preferred Stock.
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<PAGE>
CONVERSION RIGHTS
Any holder of Depositary Shares, upon surrender of the Depositary Receipts
therefor and delivery of instructions to the Depositary, may cause the Company
to convert any specified number of whole or fractional shares of Preferred
Stock represented by the Depositary Shares into the number of whole shares of
Capital Securities or other Preferred Stock (as the case may be, in accordance
with the terms of such series of the Preferred Stock) of the Company obtained
by dividing the aggregate liquidation preference of such Depositary Shares by
the Conversion Price (as such term is defined in the Certificate of Amendment)
then in effect, as such Conversion Price may be adjusted by the Company from
time to time as provided in the Certificate of Amendment. 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 share of such
Capital Securities or other Preferred Stock or into any number of whole shares
of such Capital Securities or other Preferred Stock plus an excess constituting
less than one whole share of such Capital Securities or other Preferred Stock,
the holder shall receive payment in lieu of such fractional share.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the holders of Depositary Shares
representing Preferred Stock of any series will not be effective unless such
amendment has been approved by the holders of at least 66 2/3% of the
Depositary Shares then outstanding representing Preferred Stock of such series.
Every holder of an outstanding Depositary Receipt at the time any such
amendment becomes effective, or any transferee of such holder, shall be deemed,
by continuing to hold such Depositary Receipt, or by reason of the acquisition
thereof, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. The Deposit Agreement automatically terminates if
(i) all outstanding Depositary Shares have been redeemed; or (ii) each share of
Preferred Stock has been converted into Capital Securities or other preferred
stock or has been exchanged for Capital Securities or other debt 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 Company and
such distribution has been distributed to the holders of Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay all charges of the Depositary in connection with the initial deposit
of the relevant series of Preferred Stock and any redemption or exchange of
such Preferred Stock. Holders of Depositary Receipts will pay other transfer
and other taxes and governmental charges and such other charges or expenses 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 Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
23
<PAGE>
MISCELLANEOUS
The Depositary will forward all reports and communications from the Company
which are delivered to the Depositary and which the Company is required to
furnish to the holders of the deposited Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares, Depositary
Receipts or shares of Preferred Stock unless satisfactory indemnity is
furnished. They may rely upon written advice of counsel or accountants, or upon
information provided by holders of Depositary Receipts or other persons
believed to be competent and on documents believed to be genuine.
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 350,000,000 shares of Common Stock, par
value $7.50 per share. As of August 31, 1993, 93,257,942 shares of Common Stock
were outstanding. The Common Stock is listed on the New York Stock Exchange.
The holders of the Common Stock of the Company are entitled to receive
dividends, when, as and if declared by the Board of Directors out of any funds
legally available therefor, and are entitled upon liquidation to receive pro
rata the net assets of the Company after satisfaction in full of the prior
rights of creditors of the Company and holders of any preferred stock. The
principal source of funds for payment of dividends by the Company is dividends
paid by its subsidiary banks. See "Certain Regulatory Considerations--
Dividends."
The holders of the Common Stock are entitled to one vote for each share held
on all matters as to which shareholders are entitled to vote. The holders of
the Common Stock do not have cumulative voting rights, any preferential or
preemptive right with respect to any securities of the Company or any
conversion rights. The Common Stock is not subject to redemption. The
outstanding shares of Common Stock are fully paid and non-assessable.
The Bank of New York is the Transfer Agent, Registrar and Dividend
Disbursement Agent for the Common Stock of the Company.
The New York Business Corporation Law was amended in December 1985 to
restrict certain business combinations. The statute prohibits certain New York
corporations from engaging in a merger or other business combination with a
holder of 20% or more of the corporation's outstanding voting stock ("acquiring
person") for a period of five years following acquisition of the stock unless
the merger or other business combination, or the acquisition of the stock, is
approved by the corporation's board of directors prior to the date of the stock
acquisition. The statute also prohibits consummation of such a merger or other
business combination at any time unless the transaction has been approved by
the corporation's board of directors or by a majority of the outstanding voting
stock not beneficially owned by the acquiring person or certain "fair price"
conditions have been met. Under the provisions of the statute, the Company may
amend its by-laws by a vote of the shareholders to elect not to be governed by
this statute. At this time, the by-laws of the Company have not been so
amended.
DESCRIPTION OF CAPITAL SECURITIES
GENERAL
A Prospectus Supplement may provide that Capital Securities will be issuable
in exchange for or upon conversion of Preferred Stock of any series. "Capital
Securities" may consist of Common Stock, perpetual
24
<PAGE>
preferred stock or, if permitted by the Company's primary federal banking
regulator (currently the Federal Reserve Board), other securities of the
Company. The Prospectus Supplement relating to a series of Preferred Stock
which is exchangeable for or convertible into Capital Securities will contain a
description of the Capital Securities.
TENDER OFFER RULES
Rules 13e-4 and 14e-1 of the SEC's rules and regulations relating to tender
offers by issuers, as currently in effect and interpreted, may be applicable to
exchanges or conversions such as that of Capital Securities for Preferred Stock
of any series. If, at the time of any such exchange or conversion, Rule 13e-4
or Rule 14e-1 (or any successor rule or rules) applies to such transactions,
the Company will comply with such rule (or any successor rule or rules) and
will afford holders of such Preferred Stock all rights and will make all
filings required by such rule (or successor rule or rules).
DESCRIPTION OF PREFERRED STOCK PURCHASE RIGHTS
On December 10, 1985, the Company adopted a preferred stock purchase rights
plan which was subsequently amended as of June 13, 1989 and April 30, 1993 (as
amended, the "Plan"). Under the Plan a dividend was declared in the form of one
right (a "Right" and, collectively, the "Rights") for each outstanding share of
Common Stock. The dividend was declared with respect to both the shares then
outstanding and shares issued thereafter but before the Separation Date (as
defined below). Acquirors of any shares of Common Stock issued upon conversion
of or exchange for any shares of Preferred Stock will receive one Right for
each share of Common Stock unless the Separation Date has previously occurred.
The certificates representing any such shares of Common Stock so issued will
bear a legend to the effect that the certificates also evidence the Rights.
Subject to adjustment upon the occurrence of certain events described below,
each Right entitles the holder thereof to purchase one/one-thousandth of a
share of a new series of the Company's No Par Preferred Stock (the "Purchase
Rights Preferred Stock") for $200 (the "Exercise Price"), 10 days after a
person or group (an "Acquiring Person") acquires 20% or more of the Company's
Common Stock or certain actions are taken in respect of such an acquisition.
The first date on which the right to purchase the Purchase Rights Preferred
Stock could be exercised is referred to herein as the Separation Date.
The Exercise Price, the number of Rights outstanding and the Redemption Price
(as defined below) will be adjusted in the event (i) of a stock dividend on, or
subdivision or combination of, the Common Stock or (ii) that the Company issues
in a reclassification, merger or consolidation any shares of capital stock in
respect of or in lieu of existing Common Stock.
If there is a merger or other business combination between the Company and an
Acquiring Person, or if certain other events occur involving an Acquiring
Person, each Right (if not previously exercised) would entitle the holder to
purchase $200 in market value of the Acquiring Person's stock (or, in certain
events, the stock of another company) for $100.
In addition, if a Separation Date occurs other than as a result of a merger,
business combination or other event referred to above, each Right (if not
previously exercised and other than Rights beneficially owned by an Acquiring
Person) would entitle the holder to purchase $200 in market value of the
Company's Common Stock for $100.
Prior to the Separation Date, the Rights cannot be transferred apart from the
Common Stock and are represented solely by the Common Stock certificates. If
the Separation Date occurs, separate certificates representing the Rights will
be mailed to holders of the Common Stock as of such date, and the Rights could
then begin to trade separately from the Common Stock.
25
<PAGE>
The Rights are redeemable by the Company at $.05 per Right (the "Redemption
Price"), subject to adjustment upon the occurrence of certain events, at any
time prior to the occurrence of the Separation Date. The Rights will expire
automatically 24 months after certain interstate banking legislation is
effective.
The Rights do not have any voting rights and are not entitled to dividends.
The terms of the Rights may be amended without the consent of the holders,
provided the amendment does not adversely affect the interests of the holders.
Each share of Purchase Rights Preferred Stock will have a liquidation
preference of $200,000 ($200 for every one/one-thousandth of a share of
Purchase Rights Preferred Stock) and have a dividend rate equal to the
dividends on 1,000 shares of Common Stock. The Purchase Rights Preferred Stock
will have no sinking fund, but is redeemable at the option of the Company two
years after the Separation Date at the liquidation preference per share. The
Purchase Rights Preferred Stock will have certain limited voting rights.
The Rights may have certain anti-takeover effects. The Rights may cause
substantial dilution to an Acquiring Person if it attempts to merge with, or
engage in certain other transactions with, the Company. The Rights should not,
however, interfere with any merger or other business combination approved by
the Company's Board of Directors prior to the occurrence of a Separation Date
because the Rights may be redeemed prior to such time. Moreover, these effects
will not extend appreciably beyond the advent of meaningful interstate banking
in which the Company is entitled to participate.
The foregoing description of the Rights is qualified in its entirety by
reference to the complete terms of the Rights as set forth in the Rights
Agreement, dated as of December 10, 1985, as amended by the First Amendment,
dated as of June 13, 1989 (the "First Amendment"), and by the Second Amendment,
dated as of April 30, 1993 (the "Second Amendment"), between the Company and
The Bank of New York, as Rights Agent. The Rights Agreement and the First
Amendment and Second Amendment thereto are incorporated by reference as
exhibits to the Registration Statement of which this Prospectus is a part. A
copy of the Rights Agreement, as so amended, can be obtained as described under
"Available Information" or upon written request to the Rights Agent, The Bank
of New York, 101 Barclay Street, New York, New York 10007, Attention:
Shareholder Relations Department-11th Floor.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Company by
Sullivan & Cromwell, New York, New York and for the underwriters by Milbank,
Tweed, Hadley & McCloy, New York, New York.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries,
incorporated in this prospectus by reference from the Company's Annual Report
on Form 10-K have been audited by Deloitte & Touche, independent auditors, as
stated in their report, which is incorporated herein by reference, and have
been so incorporated by reference in reliance upon such report of such firm
given upon their authority as experts in accounting and auditing.
The consolidated financial statements of NCB and its subsidiary, incorporated
in this prospectus by reference from the Company's Current Report on Form 8-K,
filed April 5, 1993, have been audited by Arthur Andersen & Co., independent
auditors, as stated in their report which is incorporated herein by reference
and have been incorporated herein by reference in reliance upon such report
given upon the authority of that firm as experts in accounting and auditing.
26
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters, acting as
principals for their own accounts or as agents, and also may sell Securities
directly to other purchasers. If one or more underwriters are utilized in the
sale of Securities, the Company will execute an underwriting agreement with
such underwriters setting forth, among other things, certain terms of the sale
and offering.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Company may also offer
and sell Securities in exchange for one or more of its outstanding series of
debt securities. The Prospectus Supplement describes the method of distribution
of the Offered Securities.
In connection with the sale of Securities, underwriters and agents may
receive compensation both from the Company, in the form of discounts,
concessions or commissions, and from purchasers of Securities for whom they may
act as agents. The underwriters and agents that participate in the distribution
of Securities and, in certain cases, direct purchasers from the Company, may be
deemed to be "underwriters" within the meaning of, and any discounts or
commissions received by them and any profit on the resale of Securities by them
may be deemed to be underwriting discounts and commissions under, the
Securities Act. Any such underwriters will be identified and any such
compensation will be described in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against or in respect of certain liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments required to be made in respect thereof.
Certain of the underwriters and their associates may be customers of,
including borrowers from, engage in transactions with, and perform services
for, the Company and the Bank in the ordinary course of business.
27
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNEC-
TION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. NEITHER THE DE-
LIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICA-
TION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE
AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SO-
LICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recent Developments....................................................... S-2
Consolidated Ratios of Earnings to Fixed Charges and Combined Fixed
Charges and Preferred Stock Dividend Requirements........................ S-2
Description of Notes...................................................... S-2
Underwriting.............................................................. S-4
Validity of Notes......................................................... S-4
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Company............................................................... 3
Certain Regulatory Considerations......................................... 3
Use of Proceeds........................................................... 7
Consolidated Ratios of Earnings to Fixed Charges and Combined Fixed
Charges and Preferred Stock Dividend Requirements........................ 7
Description of Debt Securities............................................ 8
Description of Preferred Stock............................................ 17
Description of Depositary Shares.......................................... 21
Description of Common Stock............................................... 24
Description of Capital Securities......................................... 24
Description of Preferred Stock Purchase Rights............................ 25
Validity of Securities.................................................... 26
Experts................................................................... 26
Plan of Distribution...................................................... 27
</TABLE>
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$300,000,000
THE BANK OF NEW YORK
COMPANY, INC.
8.50% SUBORDINATED NOTES
DUE DECEMBER 15, 2004
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PROSPECTUS SUPPLEMENT
DECEMBER 6, 1994
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UBS SECURITIES INC.
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