<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1997
REG. NOS. 333-40837,
333-40837-01,
333-40837-02 AND
333-40837-03
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------- BNY CAPITAL III
BNY CAPITAL IV
THE BANK OF NEW YORK COMPANY, INC. BNY CAPITAL V
(EXACT NAME OF REGISTRANT AS (EXACT NAME OF EACH REGISTRANT AS
SPECIFIED IN ITS CHARTER) SPECIFIED IN ITS TRUST AGREEMENT)
NEW YORK DELAWARE
(STATE OR OTHER JURISDICTION (STATE OR OTHER JURISDICTION OF
OFINCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION OF
13-2614959 EACH REGISTRANT)
(I.R.S. EMPLOYER IDENTIFICATION 13-7103736
NO.) 13-7103737
13-7103738
(I.R.S. EMPLOYER IDENTIFICATION
NO.)
48 WALL STREET C/O THE BANK OF NEW YORK COMPANY,
NEW YORK, NEW YORK 10286 INC.
(212) 495-1784 48 WALL STREET
(ADDRESS, INCLUDING ZIP CODE, AND NEW YORK, NEW YORK 10286
TELEPHONE NUMBER, INCLUDING AREA (212) 495-1784
CODE, OF REGISTRANT'S PRINCIPAL (ADDRESS, INCLUDING ZIP CODE, AND
EXECUTIVE OFFICES) TELEPHONE NUMBER, INCLUDING AREA
CODE, OF EACH REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
----------------
PHEBE C. MILLER, SECRETARY
THE BANK OF NEW YORK COMPANY, INC.
ONE WALL STREET
NEW YORK, NEW YORK 10286
TEL: (212) 635-1643 FAX: (212) 635-1698
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE OF EACH REGISTRANT)
WITH COPIES TO:
MARK J. WELSHIMER, ESQ. JONATHAN R. ROD, ESQ.
SULLIVAN & CROMWELL MILBANK, TWEED, HADLEY & MCCLOY
125 BROAD STREET ONE CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10004 NEW YORK, NEW YORK 10005
TEL: (212) 558-4000 TEL: (212) 530-5000
FAX: (212) 558-3588 FAX: (212) 530-5219
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: from time to
time after the Registration Statement becomes effective.
----------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
(table and footnotes continued on next page)
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- --------------------------------------------------------------------------------
<PAGE>
(continued from previous page)
---------------
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Junior Subordinated
Deferrable Interest
Debentures of The Bank
of New York Company,
Inc.(2)............... $500,000,000 $ $500,000,000 N/A
- -----------------------------------------------------------------------------------------------
Preferred Securities of
BNY Capital III,
BNY Capital IV and BNY
Capital V............. $500,000,000 $ $500,000,000 $151,515.15
- -----------------------------------------------------------------------------------------------
The Bank of New York
Company, Inc.
Guarantees with respect
to Preferred
Securities(3)(4)...... N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------
Total.................. $500,000,000(5) 100% $500,000,000(5) $151,515.15(6)
- -----------------------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures will be purchased
by BNY Capital III, BNY Capital IV and BNY Capital V with the proceeds of
the sale of the Preferred Securities.
(3) No separate consideration will be received for The Bank of New York
Company, Inc. Guarantees.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of The Bank of New York Company, Inc., the
rights of holders of Junior Subordinated Deferrable Interest Debentures of
The Bank of New York Company, Inc., under the Indenture, the rights of
holders of Preferred Securities of BNY Capital III, BNY Capital IV and BNY
Capital V under each Trust Agreement, the rights of holders of the
Preferred Securities under the Guarantees and the Expense Agreements
which, taken together fully, irrevocably and unconditionally guarantee the
respective obligations of BNY Capital III, BNY Capital IV and BNY Capital
V under the Preferred Securities.
(5) Such amount represents the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at their principal amount and the
issue price rather than the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at an original issue discount. Such
amount represents the initial public offering price of the BNY Capital
III, BNY Capital IV and BNY Capital V Preferred Securities.
(6) Previously paid.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO +
+WHICH IT RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN +
+OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN +
+WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO +
+REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED ,
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED DECEMBER , 1997
,000,000 PREFERRED SECURITIES
BNY CAPITAL III
% PREFERRED SECURITIES, SERIES D
(LIQUIDATION AMOUNT $ PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
THE BANK OF NEW YORK COMPANY, INC.
-----------
The % Preferred Securities, Series D (the "Series D Preferred
Securities"), offered hereby represent beneficial interests in BNY Capital III,
a statutory business trust created under the laws of the State of Delaware (the
"Series D Issuer"). The Bank of New York Company, Inc., a New York corporation
(the "Corporation"), will be the owner of all of the beneficial interests
represented by common securities of the Series D Issuer ("Series D Common
Securities" and,
(Continued on next page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE S-5 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES D PREFERRED SECURITIES.
-----------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING THE SERIES D
OFFERING PRICE COMMISSION(1) ISSUER(2)(3)
-------------- ------------- ------------
<S> <C> <C> <C>
Per Preferred Security............... $ (2) $
Total................................ $ (2) $
</TABLE>
- -----
(1) The Series D Issuer and the Corporation have each agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Series D Preferred
Securities will be invested in the Series D Subordinated Debentures, the
Corporation has agreed to pay to the Underwriters as compensation
("Underwriters' Compensation") for their arranging the investment therein
of such proceeds $. per Series D Preferred Securities (or $ in the
aggregate). See "Underwriting."
(3) Expenses of the offering which are payable by the Corporation are estimated
to be $ .
(4) The Series D Issuer has granted the Underwriters an option exercisable for
10 days to purchase up to an additional Series D Preferred Securities at
the initial public offering price per Series D Preferred Securities solely
to cover over-allotments, if any. If such option is exercised in full, the
total initial public offering price and proceeds to the Series D Issuer
will be $ and $ , respectively, and the total Underwriters'
Compensation paid by the Corporation for arranging the investment will be
$ . See "Underwriting".
-----------
The Series D Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Series D Preferred Securities will be ready for delivery in
book-entry form only through the facilities of The Depository Trust Company in
New York, New York, on or about , 199 , against payment therefor in
immediately available funds.
-----------
The date of this Prospectus Supplement is December , 1997.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES D
PREFERRED SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
----------------
(cover page continued)
collectively with the Series D Preferred Securities, the "Series D
Securities"). The First National Bank of Chicago is the Property Trustee of
the Series D Issuer. The Series D Issuer exists for the sole purpose of
issuing the Series D Securities and investing the proceeds thereof in $
initial principal amount of % Junior Subordinated Deferrable Interest
Debentures, Series D (the "Series D Subordinated Debentures"), to be issued by
the Corporation and engaging in only those other activities necessary or
incidental thereto. The Series D Subordinated Debentures will mature on ,
20 , which date may be (i) shortened to a date not earlier than , 2002
or (ii) extended to a date not later than , 2046, in each case if certain
conditions are met. The Corporation has committed to the Board of Governors of
the Federal Reserve System (the "Federal Reserve") not to exercise its right
to shorten the Stated Maturity of the Series D Subordinated Debentures without
having received the prior approval of the Federal Reserve to do so, if then
required under applicable Federal Reserve capital guidelines or policies. The
Series D Preferred Securities will have a preference under certain
circumstances with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise over the Series D Common Securities. See
"Description of Preferred Securities--Subordination of Common Securities" in
the accompanying Prospectus.
Holders of the Series D Preferred Securities will be entitled to receive
preferential cumulative cash distributions accruing from the date of original
issuance and payable quarterly in arrears on the last day of March, June,
September and December of each year, commencing , 199 , at the annual
rate of % of the Liquidation Amount of $ per Series D Preferred Securities
("Distributions"). Subject to certain exceptions, as described herein, the
Corporation has the right to defer payment of interest on the Series D
Subordinated Debentures at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each deferral period (each,
an "Extension Period"), provided that no Extension Period may extend beyond
the Stated Maturity of the Series D Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all interest then
accrued and unpaid (together with interest thereon at the rate of % per
annum, compounded quarterly, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period subject to the
requirements set forth herein. If interest payments on the Series D
Subordinated Debentures are so deferred, Distributions on the Series D
Preferred Securities will also be deferred and the Corporation will not be
permitted, subject to certain exceptions described herein, to declare or pay
any cash distributions with respect to the Corporation's capital stock or debt
securities that rank pari passu with or junior to the Series D Subordinated
Debentures. During an Extension Period, interest on the Series D Subordinated
Debentures will continue to accrue (and the amount of Distributions to which
holders of the Series D Preferred Securities are entitled will accumulate) at
the rate of % per annum, compounded quarterly from the relevant payment date
for such interest, and holders of Series D Preferred Securities will be
required to accrue interest income for United States federal income tax
purposes. See "Certain Terms of Series D Subordinated Debentures--Option to
Defer Interest Payments" and "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount."
The Series D Subordinated Debentures are unsecured and subordinated to all
Senior Debt (as defined in the accompanying Prospectus). Substantially all of
the Corporation's existing indebtedness constitutes Senior Debt. Because the
Corporation is a holding company, the right of the Corporation to participate
in any distribution of assets of any subsidiary, including The Bank of New
York and The Bank of New York (Delaware), upon such subsidiary's liquidation
or reorganization or otherwise is subject to the prior claims of creditors of
that subsidiary except to the extent that the Corporation may itself be
recognized as a creditor of that subsidiary. Accordingly, the Series D
Subordinated Debentures (and therefore the Series D Preferred Securities) will
be effectively
S-2
<PAGE>
(cover page continued)
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders thereof should look only to the assets of the
Corporation for payments on the Series D Subordinated Debentures. See
"Description of Subordinated Debentures--Subordination" in the accompanying
Prospectus.
The Corporation has, through the Series D Guarantee, the Trust Agreement,
the Series D Subordinated Debentures, the Indenture and the Expense Agreement
(each as defined herein), taken together, fully, irrevocably and
unconditionally guaranteed all of the Series D Issuer's obligations under the
Series D Preferred Securities. See "Relationship Among the Preferred
Securities, the Corresponding Junior Subordinated Debentures, the Expense
Agreement and the Guarantees--Full and Unconditional Guarantee" in the
accompanying Prospectus. The Series D Guarantee of the Corporation guarantees
the payment of Distributions and payments on liquidation or redemption of the
Series D Preferred Securities, but only in each case to the extent of funds
held by the Series D Issuer, as described herein (the "Series D Guarantee").
See "Description of Guarantees" in the accompanying Prospectus. If the
Corporation does not make interest payments on the Series D Subordinated
Debentures held by the Series D Issuer, the Series D Issuer will have
insufficient funds to pay Distributions on the Series D Preferred Securities.
The Series D Guarantee does not cover payment of Distributions when the Series
D Issuer has insufficient funds to pay such Distributions. In such event, a
holder of Series D Preferred Securities may institute a legal proceeding
directly against the Corporation pursuant to the terms of the Indenture to
enforce payment of amounts equal to such Distributions to such holder. See
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights
By Holders of Preferred Securities" in the accompanying Prospectus. The
obligations of the Corporation under the Series D Guarantee and the Series D
Preferred Securities are subordinate and junior in right of payment to all
Senior Debt of the Corporation.
The Series D Preferred Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series D Subordinated Debentures at
maturity or their earlier redemption. The Series D Subordinated Debentures are
redeemable prior to maturity at the option of the Corporation (i) on or after
, 2002, in whole at any time or in part from time to time, or (ii) at any
time prior to , 2002, in whole (but not in part), at any time within 90
days following the occurrence and continuation of a Tax Event or a Capital
Treatment Event (each as defined herein), in each case at a redemption price
equal to 100% of the principal amount of the Series D Subordinated Debentures
so redeemed plus accrued and unpaid interest thereon to the date fixed for
redemption. See "Certain Terms of Series D Preferred Securities--Redemption."
The Corporation has committed to the Federal Reserve that the Corporation will
not exercise its right to redeem the Series D Subordinated Debentures prior to
the Stated Maturity without having received the prior approval of the Federal
Reserve to do so, if then required under applicable Federal Reserve capital
guidelines or policies.
The Corporation will have the right at any time to terminate the Series D
Issuer and cause the Series D Subordinated Debentures to be distributed to the
holders of the Series D Preferred Securities in liquidation of the Series D
Issuer. The Corporation has committed to the Federal Reserve that, so long as
the Corporation (or any affiliate) is a holder of Common Securities, the
Corporation will not so terminate the Series D Issuer without having received
the prior approval of the Federal Reserve to do so, if then required under
applicable Federal Reserve capital guidelines or policies. See "Certain Terms
of Series D Preferred Securities--Liquidation of Series D Issuer and
Distribution of Series D Subordinated Debentures to Holders."
In the event of the termination of the Series D Issuer, after satisfaction
of liabilities to creditors of the Series D Issuer as required by applicable
law, the holders of the Series D Preferred Securities will be entitled to
receive a Liquidation Amount of $ per Series D Preferred Securities plus
accumulated and unpaid Distributions thereon to the date of payment, which may
be in the form of a distribution of such amount in Series D Subordinated
Debentures, subject to certain exceptions. See "Description of Preferred
Securities--Liquidation Distribution Upon Termination" in the accompanying
Prospectus.
Application will be made to list the Series D Preferred Securities on the
New York Stock Exchange under the symbol " ". If the Series D Subordinated
Debentures are distributed to the holders of Series D Preferred Securities
upon the liquidation of the Series D Issuer, the Corporation will use its best
efforts to list the Series D Subordinated Debentures on the New York Stock
Exchange or such other stock exchanges or other automated quotation systems,
if any, on which the Series D Preferred Securities are then listed or traded.
S-3
<PAGE>
(cover page continued)
The Series D Preferred Securities will be represented by global certificates
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the Series D Preferred Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in DTC. Except as described in the accompanying Prospectus, Series
D Preferred Securities in certificated form will not be issued in exchange for
the global certificates. See "Book-Entry Issuance" in the accompanying
Prospectus.
The information in this Prospectus Supplement supplements and should be read
in conjunction with the information contained in the accompanying Prospectus.
As used herein, (i) the "Indenture" means the Junior Subordinated Indenture, as
amended and supplemented from time to time, between the Corporation and The
First National Bank of Chicago, as trustee (the "Debenture Trustee"), and (ii)
the "Trust Agreement" means the Amended and Restated Trust Agreement relating
to the Series D Issuer among the Corporation, as Depositor, The First National
Bank of Chicago as Property Trustee (the "Property Trustee"), First Chicago
Delaware Inc. as Delaware Trustee (the "Delaware Trustee"), and the
Administrative Trustees named therein (collectively, with the Property Trustee
and Delaware Trustee, the "Issuer Trustees"). Each of the other capitalized
terms used in this Prospectus Supplement and not otherwise defined in this
Prospectus Supplement has the meaning set forth in the accompanying Prospectus.
S-4
<PAGE>
RISK FACTORS
Prospective purchasers of the Series D Preferred Securities should carefully
review the information contained elsewhere in this Prospectus Supplement and
in the accompanying Prospectus and should particularly consider the following
matters. In addition, because holders of Series D Preferred Securities may
receive Series D Subordinated Debentures in exchange therefor upon liquidation
of the Series D Issuer, prospective purchasers of Series D Preferred
Securities are also making an investment decision with regard to the Series D
Subordinated Debentures and should carefully review all the information
regarding the Series D Subordinated Debentures contained herein.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES D GUARANTEE AND THE
SERIES D SUBORDINATED DEBENTURES
The obligations of the Corporation under the Series D Guarantee issued by
the Corporation for the benefit of the holders of Series D Preferred
Securities and under the Series D Subordinated Debentures are unsecured and
rank subordinate and junior in right of payment to all Senior Debt of the
Corporation. Substantially all of the Corporation's existing indebtedness
constitutes Senior Debt. Because the Corporation is a holding company, the
right of the Corporation to participate in any distribution of assets of any
subsidiary, including The Bank of New York and The Bank of New York
(Delaware), upon such subsidiary's liquidation or reorganization or otherwise
(and thus the ability of holders of the Series D Preferred Securities to
benefit indirectly from such distribution), is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the Series
D Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Series D
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Series D Subordinated Debentures. See "The Corporation." None
of the Indenture, the Series D Guarantee, the Trust Agreement or the Expense
Agreement places any limitation on the amount of secured or unsecured debt,
including Senior Debt, that may be incurred by the Corporation. See
"Description of Guarantees--Status of the Guarantees" and "Description of
Junior Subordinated Debentures--Subordination" in the accompanying Prospectus.
The ability of the Series D Issuer to pay amounts due on the Series D
Preferred Securities is solely dependent upon the Corporation making payments
on the Series D Subordinated Debentures as and when required.
S-5
<PAGE>
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no event of default under the Indenture has occurred or is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series D Subordinated Debentures at any time or from time
to time for a period not exceeding 20 consecutive quarters with respect to
each Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity of the Series D Subordinated Debentures. As a consequence of
any such deferral, quarterly Distributions on the Series D Preferred
Securities by the Series D Issuer will also be deferred (and the amount of
Distributions to which holders of the Series D Preferred Securities are
entitled will accumulate additional Distributions thereon at the rate of %
per annum, compounded quarterly from the relevant payment date for such
Distributions) during any such Extension Period. During any such Extension
Period, the Corporation may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Corporation's capital stock or (ii) make any
payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation that rank pari
passu in all respects with or junior in interest to the Series D Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Corporation in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
one or more employees, officers, directors or consultants, in connection with
a dividend reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Corporation (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(b) as a result of any exchange or conversion of any class or series of the
Corporation's capital stock (or any capital stock of a subsidiary of the
Corporation) for any class or series of the Corporation's capital stock or of
any class or series of the Corporation's indebtedness for any class or series
of the Corporation's capital stock, (c) the purchase of fractional interests
in shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise
of such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such stock).
Prior to the termination of any such Extension Period, the Corporation may
further defer the payment of interest, provided that no Extension Period may
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Series D Subordinated Debentures. Upon the termination of any Extension Period
and the payment of all interest then accrued and unpaid (together with
interest thereon at the annual rate of %, compounded quarterly from the
interest payment date for such interest, to the extent permitted by applicable
law), the Corporation may elect to begin a new Extension Period subject to the
above requirements. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period. See "Certain Terms of
Series D Preferred Securities--Distributions" and "Certain Terms of Series D
Subordinated Debentures--Option to Defer Interest Payments."
Should an Extension Period occur, a holder of Series D Preferred Securities
will be required to recognize income (in the form of original issue discount
on a constant yield method) in respect of its pro rata share of the Series D
Subordinated Debentures held by the Series D Issuer for United States federal
income tax purposes. As a result, a holder of Series D Preferred Securities
will be required to include such income in gross income for United States
federal income tax purposes in advance of the receipt of cash attributable to
such income, and will not receive the cash related to such income from the
Series D Issuer if the holder disposes of the Series D Preferred Securities
prior to the record date for the payment of Distributions. See "Certain
Federal Income Tax Consequences--Interest Income and Original Issue Discount"
and "--Sale or Redemption of Series D Preferred Securities."
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series D
Subordinated Debentures. However, should the Corporation elect to exercise
such right in the future, the market price of the Series D Preferred
Securities is likely to be affected. A holder that disposes of its Series D
Preferred Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its
Series D Preferred Securities.
S-6
<PAGE>
TAX EVENT OR CAPITAL TREATMENT EVENT--REDEMPTION
Upon the occurrence and continuation of a Tax Event or a Capital Treatment
Event (whether occurring before or after December , 2002), the Corporation
has the right to redeem the Series D Subordinated Debentures in whole (but not
in part) prior to December , 2002 and within 90 days following the occurrence
and continuation of such Tax Event or Capital Treatment Event and thereby
cause a mandatory redemption of the Series D Preferred Securities before, as
well as after, December , 2002. The Corporation has committed to the Federal
Reserve that it will not exercise such right unless it has received prior
approval of the Federal Reserve to do so, if such approval is then required
under applicable guidelines or policies of the Federal Reserve.
A "Tax Event" means the receipt by the Series D Issuer of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of issuance
of the Series D Preferred Securities under the Trust Agreement, there is more
than an insubstantial risk that (i) the Series D Issuer is, or will be within
90 days of the date of such opinion, subject to United States Federal income
tax with respect to income received or accrued on the Series D Subordinated
Debentures, (ii) interest payable by the Corporation on the Series D
Subordinated Debentures is not, or within 90 days of such opinion, will not
be, deductible by the Corporation, in whole or in part, for United States
Federal income tax purposes, or (iii) the Series D Issuer is, or will be
within 90 days of the date of the opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
A "Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision thereof or therein, or as a
result of any official or administrative pronouncement or action or judicial
decision interpreting or applying such laws, rules or regulations, which
amendment or change is effective or which pronouncement, action or decision is
announced on or after the date of issuance of the Series D Preferred
Securities under the Trust Agreement, there is more than an insubstantial risk
that the Corporation will not be entitled to treat an amount equal to the
aggregate Liquidation Amount of the Series D Preferred Securities as "Tier 1
Capital" (or the then equivalent thereof) for purposes of the capital adequacy
guidelines of the Federal Reserve, as then in effect and applicable to the
Corporation.
See "Risk Factors--Possible Tax Law Changes Affecting the Series D Preferred
Securities" for a discussion of certain legislative proposals that, if
adopted, could give rise to a Tax Event, which may permit the Corporation to
cause a redemption of the Series D Preferred Securities prior to December ,
2002.
EXCHANGE OF SERIES D PREFERRED SECURITIES FOR SERIES D SUBORDINATED DEBENTURES
The Corporation will have the right at any time to terminate the Series D
Issuer and after satisfaction of liabilities to creditors of the Series D
Issuer as required by applicable law cause the Series D Subordinated
Debentures to be distributed to the holders of the Series D Preferred
Securities in exchange therefor upon liquidation of the Series D Issuer. The
exercise of such right is subject to the Corporation having received prior
approval of the Federal Reserve if such approval is then required under
applicable capital guidelines or policies of the Federal Reserve. See "Certain
Terms of Series D Preferred Securities--Liquidation of Series D Issuer and
Distribution of Series D Subordinated Debentures to Holders."
Under current United States Federal income tax law and interpretations, a
distribution of the Series D Subordinated Debentures upon liquidation of the
Series D Issuer should not be a taxable event to holders of the Series D
Preferred Securities. However, if a tax event were to occur which would cause
the Series D Issuer to be subject to United States Federal income tax with
respect to income received or accrued on the Series D
S-7
<PAGE>
Subordinated Debentures, as the case would be if the Series D Issuer were
treated as an association taxable as a corporation, a distribution of the
Series D Subordinated Debentures by the Series D Issuer could be a taxable
event to the Series D Issuer and the holders of the Series D Preferred
Securities. See "Certain Federal Income Tax Consequences--Distribution of the
Series D Subordinated Debentures to Holders of Series D Preferred Securities."
SHORTENING OF STATED MATURITY OF SERIES D SUBORDINATED DEBENTURES
The Corporation will have the right at any time to shorten the maturity of
the Series D Subordinated Debentures to a date not earlier than , 2002
and thereby cause the Series D Preferred Securities to be redeemed on such
earlier date. The Corporation has committed to the Federal Reserve that the
Corporation will not exercise such right without having received prior
approval of the Federal Reserve to do so, if then required under applicable
Federal Reserve capital guidelines or policies.
EXTENSION OF STATED MATURITY OF SERIES D SUBORDINATED DEBENTURES
The Corporation will also have the right to extend the maturity of the
Series D Subordinated Debentures whether or not the Series D Issuer is
liquidated and the Series D Subordinated Debentures are distributed to holders
of the Series D Preferred Securities to a date no later than the 49th
anniversary of the initial issuance of the Series D Preferred Securities,
provided that the Corporation can extend the maturity only if at the time such
election is made and at the time of such extension (i) the Corporation is not
in bankruptcy, otherwise insolvent or in liquidation, (ii) the Corporation is
not in default in the payment of any interest or principal on the Series D
Subordinated Debentures, (iii) if the Series D Issuer has not been liquidated,
the Series D Issuer is not in arrears on payments of Distributions on the
Series D Preferred Securities and no deferred Distributions are accumulated,
(iv) the Series D Subordinated Debentures are rated not less than BBB- by
Standard & Poor's Ratings Services ("Standard & Poor's") or Baa3 by Moody's
Investors Service, Inc. ("Moody's") or the equivalent by any other nationally
recognized statistical rating organization and (v) after such extension, the
Series D Subordinated Debentures shall not have a remaining term to maturity
of more than 30 years. To the extent that the Stated Maturity of the Series D
Subordinated Debentures is extended at such time as the Series D Preferred
Securities are outstanding, the Series D Preferred Securities would remain
outstanding until such extended date or until redeemed at an earlier date.
MARKET PRICES
There can be no assurance as to the market prices for Series D Preferred
Securities or Series D Subordinated Debentures that may be distributed in
exchange for Series D Preferred Securities upon liquidation of the Series D
Issuer. Accordingly, the Series D Preferred Securities that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary
market, or the Series D Subordinated Debentures that a holder of Series D
Preferred Securities may receive on liquidation of the Series D Issuer, may
trade at a discount to the price that the investor paid to purchase the Series
D Preferred Securities offered hereby. As a result of the existence of the
Corporation's right to defer interest payments, the market price of the Series
D Preferred Securities (which represent preferred beneficial interests in the
Series D Issuer) may be more volatile than the market prices of other
securities on which original issue discount accrues that are not subject to
such deferrals. In addition, because the Corporation has the right (i) to
shorten the Stated Maturity of the Series D Subordinated Debentures (subject
to its commitment to the Federal Reserve not to do so without the Federal
Reserve's prior approval if such approval is then required under applicable
Federal Reserve guidelines or policies) or (ii) to extend the maturity of the
Series D Subordinated Debentures (subject to the conditions described above),
there can be no assurance that the Corporation will not exercise its option to
change the maturity of the Series D Subordinated Debentures as permitted by
the terms thereof and of the Indenture. If the Corporation does exercise such
option, there can be no assurance that the shortening or extending of the
maturity of the Series D Subordinated Debentures will not have an effect on
the market price of the Series D Preferred Securities. See "Certain Terms of
the Series D Subordinated Debentures" and "Description of Junior Subordinated
Debentures--Corresponding Junior Subordinated Debentures" in the accompanying
Prospectus.
S-8
<PAGE>
RIGHTS UNDER THE SERIES D GUARANTEE; DIRECT ACTION
The Series D Guarantee guarantees to the holders of the Series D Preferred
Securities the following payments, to the extent not paid by the Series D
Issuer: (i) any accumulated and unpaid Distributions required to be paid on
the Series D Securities, to the extent that the Series D Issuer has funds on
hand available therefor at such time, (ii) the redemption price with respect
to any Series D Securities called for redemption, to the extent that the
Series D Issuer has funds on hand available therefor at such time, and (iii)
upon a voluntary or involuntary dissolution, winding-up or liquidation of the
Series D Issuer (unless the Series D Subordinated Debentures are distributed
to holders of the Series D Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accumulated and unpaid Distributions to the date of
payment to the extent that the Series D Issuer has funds on hand available
therefor at such time and (b) the amount of assets of the Series D Issuer
remaining available for distribution to holders of the Series D Securities.
The Series D Guarantee will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The First
National Bank of Chicago will act as the indenture trustee under the Series D
Guarantee (the "Guarantee Trustee") for the purposes of compliance with the
Trust Indenture Act and will hold the Series D Guarantee for the benefit of
the holders of the Series D Preferred Securities. The First National Bank of
Chicago will also act as Debenture Trustee for the Series D Subordinated
Debentures and as Property Trustee under the Trust Agreement and First Chicago
Delaware Inc. will act as Delaware Trustee under the Trust Agreement.
The holders of not less than a majority in aggregate liquidation amount of
the Series D Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Series D Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the Series D Guarantee. Any holder
of the Series D Securities may institute a legal proceeding directly against
the Corporation to enforce its rights under the Series D Guarantee without
first instituting a legal proceeding against the Series D Issuer, the
Guarantee Trustee or any other person or entity. If the Corporation were to
default on its obligation to pay amounts payable under the Series D
Subordinated Debentures, the Series D Issuer would lack funds for the payment
of Distributions or amounts payable on redemption of the Series D Securities
or otherwise, and, in such event, holders of the Series D Securities would not
be able to rely upon the Series D Guarantee for payment of such amounts.
Instead, in the event a Debenture Event of Default shall have occurred and be
continuing and such event is attributable to the failure of the Corporation to
pay interest on or principal of the Series D Subordinated Debentures on the
payment date on which such payment is due and payable, then a holder of Series
D Securities may institute a legal proceeding directly against the Corporation
for enforcement of payment to such holder of the principal of or interest on
such Series D Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Series D Securities of such holder (a
"Direct Action"). In connection with such Direct Action, the Corporation will
have a right of set-off under the Indenture to the extent of any payment made
by the Corporation to such holder of Series D Securities in the Direct Action.
Except as described herein, holders of Series D Securities will not be able to
exercise directly any other remedy available to the holders of the Series D
Subordinated Debentures or assert directly any other rights in respect of the
Series D Subordinated Debentures. See "Description of Junior Subordinated
Debentures--Enforcement of Certain Rights by Holders of Preferred Securities"
and "--Debenture Events of Default" and "Description of Guarantees" in the
accompanying Prospectus. The Trust Agreement provides that each holder of
Series D Preferred Securities by acceptance thereof agrees to the provisions
of the Series D Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Series D Preferred Securities generally will have limited voting
rights relating only to the modification of the Series D Preferred Securities
and the exercise of the Series D Issuer's rights as holder of Series D
Subordinated Debentures and the Series D Guarantee. Holders of Series D
Preferred Securities will not be entitled to vote to appoint, remove or
replace the Property Trustee, the Delaware Trustee or any Administrative
Trustee, and such voting rights are vested exclusively in the holder of the
Series D Common Securities except, with respect to the Property Trustee and
the Delaware Trustee, upon the occurrence of certain events described in the
accompanying Prospectus. The Property Trustee, the Administrative Trustees and
the
S-9
<PAGE>
Corporation may amend the Trust Agreement without the consent of holders of
Series D Preferred Securities to ensure that the Series D Issuer will be
classified for United States federal income tax purposes as a grantor trust or
as other than as an association taxable as a corporation unless such action
materially adversely affects the interests of such holders. See "Description
of Preferred Securities--Voting Rights; Amendment of Each Trust Agreement" and
"--Removal of Issuer Trustees" in the accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES D PREFERRED SECURITIES
Application will be made to list the Series D Preferred Securities on the
New York Stock Exchange. The Series D Preferred Securities may trade at prices
that do not fully reflect the value of accrued but unpaid interest with
respect to the underlying Series D Subordinated Debentures. A holder of Series
D Preferred Securities that disposes of its Series D Preferred Securities
between record dates for payments of Distributions (and consequently does not
receive a Distribution from the Series D Issuer for the period prior to such
disposition) will nevertheless be required to include accrued but unpaid
interest on the Series D Subordinated Debentures through the date of
disposition in income as ordinary income and to add such amount to its
adjusted tax basis in the Series D Preferred Securities disposed of. Such
holder will recognize a capital loss to the extent the selling price (which
may not fully reflect the value of accrued but unpaid interest) is less than
its adjusted tax basis (which will include accrued but unpaid interest).
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences--Sale or Redemption of Series D
Preferred Securities."
As indicated above, application will be made to list the Series D Preferred
Securities on the New York Stock Exchange. If the Series D Preferred
Securities are not listed on a national securities exchange or the NASDAQ
National Market and the underwriters do not make a market for the securities,
the liquidity of the Series D Preferred Securities could be adversely
affected.
POSSIBLE TAX LAW CHANGES AFFECTING THE SERIES D PREFERRED SECURITIES
On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Act") was signed by
President Clinton. The Act did not adopt several tax law changes that the
President had originally proposed that, if such changes had been enacted,
would have denied the Corporation the ability to deduct interest on the Series
D Subordinated Debentures. There can be no assurance that future legislative
proposals or final legislation will not affect the ability of the Corporation
to deduct interest on the Series D Subordinated Debentures. Such a change
could give rise to a Tax Event, which may permit the Corporation to cause a
redemption of the Series D Preferred Securities before , 2002. See
"Certain Terms of Series D Subordinated Debentures--Redemption" in this
Prospectus Supplement and "Description of Preferred Securities--Redemption or
Exchange--Tax Event Redemption" in the accompanying Prospectus. See also
"Certain Federal Income Tax Consequences--Possible Tax Law Changes."
BNY CAPITAL III
BNY Capital III is a statutory business trust created under Delaware law
pursuant to (i) the Trust Agreement executed by the Corporation, as Depositor,
The First National Bank of Chicago, as Property Trustee, First Chicago
Delaware Inc., as Delaware Trustee, and the Administrative Trustees named
therein, and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on November 12, 1996. The Series D Issuer's business and
affairs are conducted by the Issuer Trustees: The First National Bank of
Chicago, as Property Trustee, and First Chicago Delaware Inc., as Delaware
Trustee, and two individual Administrative Trustees who are employees or
officers of or affiliated with the Corporation. The Series D Issuer exists for
the exclusive purposes of (i) issuing and selling the Series D Securities,
(ii) using the proceeds from the sale of Series D Securities to acquire Series
D Subordinated Debentures issued by the Corporation and (iii) engaging in only
those other activities necessary or incidental thereto (such as registering
the transfer of the Series D Preferred Securities). Accordingly, the Series D
Subordinated Debentures will be the sole assets of the Series D Issuer, and
payments under the Series D Subordinated Debentures will be the sole revenue
of the Series D Issuer. All of the Series D Common Securities will be owned by
the Corporation. The Series D Common Securities will rank
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<PAGE>
pari passu, and payments will be made thereon pro rata, with the Series D
Preferred Securities, except that upon the occurrence and continuance of an
event of default under the Trust Agreement resulting from an Event of Default
under the Indenture, the rights of the Corporation, as holder of the Series D
Common Securities, to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of the Series D Preferred Securities. See "Description of Preferred
Securities--Subordination of Common Securities" in the accompanying
Prospectus. The Corporation will acquire Series D Common Securities in an
aggregate liquidation amount equal to 3% of the total capital of the Series D
Issuer. The Series D Issuer has a term of 55 years, but may terminate earlier
as provided in the Trust Agreement. The principal executive office of the
Series D Issuer is 48 Wall Street, New York, New York 10286, Attention:
Secretary, and its telephone number is (212) 495-1784. See "The Issuers" in
the accompanying Prospectus.
It is anticipated that the Series D Issuer will not be subject to the
reporting requirements under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
THE CORPORATION
The Corporation is a bank holding company subject to the regulation and
supervision of the Federal Reserve Board under the Bank Holding Company Act of
1956, as amended ("BHC Act"). The Corporation is also subject to regulation by
the New York State Banking Department. Its principal wholly-owned banking
subsidiaries are The Bank of New York (the "Bank") and The Bank of New York
(Delaware). The Corporation provides a complete range of banking and other
financial services to corporations and individuals worldwide through its core
businesses: Corporate Banking, Retail Banking, Securities and Other
Processing, Trust, Investment Management and Private Banking and Financial
Market Services. At September 30, 1997, the Corporation had consolidated total
assets of approximately $61.2 billion, consolidated total deposits of
approximately $42.5 billion and consolidated shareholders' equity of
approximately $5.0 billion. On the basis of consolidated total assets at
September 30, 1997, the Corporation was the seventeenth 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. The Bank conducts a national and international wholesale
banking business and a retail banking business in the metropolitan New York
City area including New Jersey and south eastern Connecticut, and provides a
comprehensive range of corporate and personal trust, securities processing and
investment services.
The Bank of New York (Delaware) is a Delaware chartered, FDIC insured non-
member bank.
The Corporation has its principal executive offices at 48 Wall Street, New
York, New York 10286, telephone number (212) 495-1784.
RECENT DEVELOPMENTS
In the fourth quarter of 1997, the Corporation sold substantially all of its
remaining credit card operations to Chase Manhattan Bank USA, National
Association. In another transaction, the Corporation sold almost all of its
remaining portfolio of late cycle delinquent and bankrupt accounts. These
transactions affect approximately $4.2 billion in receivables and
approximately 3.7 million credit cards. The Corporation expects to realize a
net gain of approximately $175 million on these sales.
On December 1, 1997, the Corporation redeemed all outstanding shares of its
8.60% Cumulative Preferred Stock at a redemption price of $25 per share, plus
accrued and unpaid dividends of $0.5375 per share.
On December 16, 1997, the Corporation announced that its Board of Directors
has approved a plan to buy back, through the end of 1998, up to 15 million of
its common shares.
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<PAGE>
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Corporation's ratios of earnings to fixed
charges and ratios of earnings to combined fixed charges, distribution on
Trust Preferred Securities and preferred stock dividend requirements for the
years and periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------
1997 1996 1995 1994 1993 1992
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits....... 5.07 4.30 3.61 3.75 3.61 2.70
Including Interest on Deposits....... 2.04 2.00 1.81 1.94 1.85 1.44
Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements:
Excluding Interest on Deposits....... 4.32 4.15 3.51 3.58 3.23 2.36
Including Interest on Deposits....... 1.95 1.98 1.79 1.91 1.78 1.38
</TABLE>
For purposes of computing both the ratios of earnings to fixed charges and
earnings to combined fixed charge, distribution on Trust Preferred Securities
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.
USE OF PROCEEDS
All of the proceeds from the sale of Series D Preferred Securities will be
invested by the Series D Issuer in Series D Subordinated Debentures. The
Corporation intends that the proceeds from the sale of such Series D
Subordinated Debentures will be added to its general corporate funds and will
be used for general corporate purposes.
The Corporation is required by the Federal Reserve to maintain certain
levels of capital for bank regulatory purposes. On October 21, 1996, the
Federal Reserve announced that cumulative preferred securities having the
characteristics of the Series D Preferred Securities which qualify as a
minority interest could be included as Tier 1 capital for bank holding
companies. Such Tier 1 capital treatment, together with the Corporation's
ability to deduct, for income tax purposes, interest payable on the Series D
Subordinated Debentures, will provide the Corporation with a more cost-
effective means of obtaining capital for regulatory purposes than other Tier 1
capital alternatives currently available to it.
S-12
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of September 30, 1997 and as adjusted to
give effect to the consummation of the offering of the Series D Preferred
Securities. The following data should be read in conjunction with the
consolidated financial statements and notes thereto of the Corporation and its
subsidiaries incorporated herein by reference.
<TABLE>
<CAPTION>
SEPTEMBER 30,
1997
----------------
AS
ACTUAL ADJUSTED
------ --------
(IN MILLIONS)
<S> <C> <C>
Total Long-term debt.......................................... $1,827
------ ---
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated
Deferrable Interest Debentures(a) ........................... 1,000
Shareholders' Equity
Preferred Stock............................................. 112
Common Stock................................................ 3,434
Capital Surplus............................................. 435
Retained Earnings........................................... 3,314
Securities Valuation Allowance.............................. 262
Treasury Stock, at Cost..................................... (2,548)
Loan to ESOP, at Cost....................................... (17)
------ ---
Total Stockholders' Equity................................ $4,992
------ ---
Total Capitalization.................................... $7,819
====== ===
</TABLE>
(a) As described herein, the sole assets of the Series D Issuer will be $
of % Series D Subordinated Debentures, issued by the Corporation to the
Series D Issuer. The Series D Subordinated Debentures will mature on ,
2027 which date may be shortened to a date not earlier than , 2002 or
extended to a date not later than , 2046 if certain conditions are met.
The Corporation owns all of the Series D Common Securities of the Series D
Issuer, which accrue distributions at the rate of % per annum.
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<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Series D Issuer will be treated as a
subsidiary of the Corporation and, accordingly, the accounts of the Series D
Issuer will be included in the consolidated financial statements of the
Corporation. The Series D Preferred Securities will be presented as a separate
line item in the consolidated balance sheets of the Corporation, entitled
"Guaranteed Preferred Beneficial Interests in Corporation's Junior
Subordinated Deferrable Interest Debentures" and appropriate disclosures about
the Series D Preferred Securities, the Series D Guarantee and the Series D
Subordinated Debentures will be included in the notes to the consolidated
financial statements. For financial reporting purposes, the Corporation will
record Distributions payable on the Series D Preferred Securities as an
expense in the consolidated statements of income.
The Corporation has agreed that future financial reports of the Corporation
will: (i) present the Preferred Securities issued by other Issuer Trusts on
the Corporation's balance sheet as a separate line item entitled "Guaranteed
Preferred Beneficial Interests in Corporation's Junior Subordinated Deferrable
Interest Debentures"; (ii) include in a footnote to the financial statements
disclosure that the sole assets of the trusts are the Junior Subordinated
Debentures (specifying as to each trust the principal amount, interest rate
and maturity date of the Junior Subordinated Debentures held); and (iii) if
Staff Accounting Bulletin 53 treatment is sought, include, in an audited
footnote to the financial statements, disclosure that (a) the trusts are
wholly owned, (b) the sole assets of the trusts are the Junior Subordinated
Debentures (specifying as to each trust the principal amount, interest rate
and maturity date of the Junior Subordinated Debentures held), and (c) the
obligations of the Corporation under the Junior Subordinated Debentures, the
relevant Indenture, Trust Agreement, Guarantee and Expense Agreement, in the
aggregate, constitute a full and unconditional guarantee by the Corporation of
such trust's obligations under the preferred securities issued by such trust.
CERTAIN TERMS OF SERIES D PREFERRED SECURITIES
GENERAL
The following summary of certain terms and provisions of the Series D
Preferred Securities supplements the description of the terms and provisions
of the Preferred Securities set forth in the accompanying Prospectus under the
heading "Description of Preferred Securities," to which description reference
is hereby made. This summary of certain terms and provisions of the Series D
Preferred Securities, which describes the material provisions thereof, does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, the Trust Agreement to which reference is hereby made. The form
of the Trust Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and accompanying Prospectus form
a part.
DISTRIBUTIONS
The Series D Preferred Securities represent beneficial interests in the
Series D Issuer, and Distributions on the Series D Preferred Securities will
be payable at the annual rate of % of the stated Liquidation Amount of $ ,
payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year (each a "Distribution Date"), to the holders of the Series D
Preferred Securities at the close of business on the fifteenth day (whether or
not a Business Day (as defined below)) next preceding the relevant
Distribution Date. Distributions will accumulate from the date of original
issuance. The first Distribution payment date for the Series D Preferred
Securities will be , 199 . The amount of Distributions payable for any
period will be computed on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which Distributions are payable on the
Series D Preferred Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day
that is a Business Day (and without
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<PAGE>
any additional Distributions or other payment in respect of any such delay)
with the same force and effect as if made on the date such payment was
originally payable. The Paying Agent for the Preferred Securities shall be the
Bank of New York. See "Description of Preferred Securities--Distributions" in
the accompanying Prospectus.
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series D Subordinated Debentures at any time or from time
to time for a period not exceeding 20 consecutive quarters with respect to
each Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity of the Series D Subordinated Debentures. As a consequence of
any such deferral of interest payments by the Corporation, quarterly
Distributions on the Series D Preferred Securities will also be deferred by
the Series D Issuer during any such Extension Period. Distributions to which
holders of the Series D Preferred Securities are entitled will accumulate
additional Distributions thereon at the rate per annum of % thereof,
compounded quarterly from the relevant payment date for such Distributions.
The term "Distributions" as used herein shall include any such additional
Distributions. During any such Extension Period, the Corporation may not (i)
declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the
Corporation's capital stock or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation that rank pari passu in all respects with or
junior in interest to the Series D Subordinated Debentures (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Corporation in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of
capital stock of the Corporation (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange or conversion of any class or series of the
Corporation's capital stock (or any capital stock of a subsidiary of the
Corporation) for any class or series of the Corporation's capital stock or of
any class or series of the Corporation's indebtedness for any class or series
of the Corporation's capital stock, (c) the purchase of fractional interests
in shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise
of such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such stock).
Prior to the termination of any such Extension Period, the Corporation may
further defer the payment of interest on the Series D Subordinated Debentures,
provided that no Extension Period may exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Series D Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all interest then
accrued and unpaid (together with interest thereon at the rate of % per
annum, compounded quarterly, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period. There is no limitation
on the number of times that the Corporation may elect to begin an Extension
Period. See "Certain Terms of Series D Subordinated Debentures--Option to
Defer Interest Payments" and "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount."
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series D
Subordinated Debentures.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series D
Subordinated Debentures, whether at Stated Maturity or upon earlier redemption
as provided in the Indenture, the proceeds from such repayment or redemption
shall be applied by the Property Trustee to redeem a Like Amount (as defined
in the accompanying Prospectus) of the Series D Securities, upon not less than
30 nor more than 60 days notice prior to the date fixed
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for repayment or redemption, at a redemption price, with respect to the Series
D Preferred Securities (the "Redemption Price"), equal to the aggregate
Liquidation Amount of such Series D Preferred Securities plus accumulated and
unpaid Distributions thereon to the date of redemption (the "Redemption
Date"). See "Description of Preferred Securities--Redemption or Exchange" in
the accompanying Prospectus. For a description of the Stated Maturity and
redemption provisions of the Series D Subordinated Debentures, see "Certain
Terms of Series D Subordinated Debentures--General" and "--Redemption."
LIQUIDATION OF SERIES D ISSUER AND DISTRIBUTION OF SERIES D SUBORDINATED
DEBENTURES TO HOLDERS
The Corporation will have the right at any time to liquidate the Series D
Issuer and cause the Series D Subordinated Debentures to be distributed to the
holders of the Series D Preferred Securities in exchange therefor upon
liquidation of the Series D Issuer. The Corporation has committed to the
Federal Reserve that, so long as the Corporation (or any affiliate) is a
holder of Series D Common Securities, the Corporation will not exercise such
right without having received the prior approval of the Federal Reserve to do
so, if then required under applicable Federal Reserve capital guidelines or
policies.
Under current United States Federal income tax law, a distribution of Series
D Subordinated Debentures in exchange for Series D Preferred Securities should
not be a taxable event to holders of the Series D Preferred Securities. Should
there be a change in law, a change in legal interpretation, a Tax Event or
other circumstances, however, the distribution of the Series D Subordinated
Debentures could be a taxable event to holders of the Series D Preferred
Securities. See "Certain Federal Income Tax Consequences--Distribution of
Series D Subordinated Debentures to Holders of Series D Preferred Securities."
If the Corporation elects neither to redeem the Series D Subordinated
Debentures prior to maturity nor to liquidate the Series D Issuer and
distribute the Series D Subordinated Debentures to holders of the Series D
Preferred Securities in exchange therefor, the Series D Preferred Securities
will remain outstanding until the Stated Maturity of the Series D Subordinated
Debentures.
If the Corporation elects to liquidate the Series D Issuer and thereby
causes the Series D Subordinated Debentures to be distributed to holders of
the Series D Preferred Securities in exchange therefor upon liquidation of the
Series D Issuer, the Corporation shall continue to have the right to shorten
or extend the maturity of the Series D Subordinated Debentures, subject to
certain conditions as described under "Certain Terms of Series D Subordinated
Debentures--General."
LIQUIDATION VALUE
The amount payable on the Series D Preferred Securities in the event of any
liquidation of the Series D Issuer is $ per Series D Preferred Securities
plus accumulated and unpaid Distributions, which may be in the form of a
distribution of a Like Amount in Series D Subordinated Debentures, subject to
certain exceptions. See "Description of Preferred Securities--Liquidation
Distribution Upon Termination" in the accompanying Prospectus.
REGISTRATION OF SERIES D PREFERRED SECURITIES
The Series D Preferred Securities will be represented by global certificates
registered in the name of DTC or its nominee. Beneficial interests in the
Series D Preferred Securities will be shown on, and transfers thereof will be
effected only through, records maintained by Participants in DTC (as defined
in the accompanying Prospectus). Except as described below and in the
accompanying Prospectus, Series D Preferred Securities in certificated form
will not be issued in exchange for the global certificates. See "Book-Entry
Issuance" in the accompanying Prospectus.
A global security shall be exchangeable for Series D Preferred Securities
registered in the names of persons other than DTC or its nominee only if (i)
DTC notifies the Series D Issuer that it is unwilling or unable to continue as
a depository for such global security and no successor depository shall have
been appointed, or if at
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any time DTC ceases to be a clearing agency registered under the Exchange Act,
at a time when DTC is required to be so registered to act as such depository,
(ii) the Series D Issuer in its sole discretion determines that such global
security shall be so exchangeable, or (iii) there shall have occurred and be
continuing an event of default under the Indenture with respect to the Series
D Subordinated Debentures. Any global security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for definitive certificates
registered in such names as DTC shall direct. It is expected that such
instructions will be based upon directions received by DTC from its
Participants with respect to ownership of beneficial interests in such global
security. In the event that Series D Preferred Securities are issued in
definitive form, such Series D Preferred Securities will be in denominations
of $ and integral multiples thereof and may be transferred or exchanged at
the offices described below.
Payments on Series D Preferred Securities represented by a global security
will be made to DTC, as the depositary for the Series D Preferred Securities.
In the event Series D Preferred Securities are issued in certificated form,
the Liquidation Amount and Distributions will be payable, the transfer of the
Series D Preferred Securities will be registrable, and Series D Preferred
Securities will be exchangeable for Series D Preferred Securities of other
denominations of a like aggregate Liquidation Amount, at the corporate office
of the Property Trustee in New York, New York, or at the offices of any paying
agent or transfer agent appointed by the Administrative Trustees, provided
that payment of any Distribution may be made at the option of the
Administrative Trustees by check mailed to the address of the persons entitled
thereto or by wire transfer. In addition, if the Series D Preferred Securities
are issued in certificated form, the record dates for payment of Distributions
will be the 15th day of the month in which the relevant Distribution payment
is scheduled to be made. For a description of DTC and the terms of the
depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Book-Entry Issuance" in
the accompanying Prospectus.
CERTAIN TERMS OF SERIES D SUBORDINATED DEBENTURES
GENERAL
The following summary of certain terms and provisions of the Series D
Subordinated Debentures supplements the description of the terms and
provisions of the Corresponding Junior Subordinated Debentures set forth in
the accompanying Prospectus under the headings "Description of Junior
Subordinated Debentures", to which description reference is hereby made. The
summary of certain terms and provisions of the Series D Subordinated
Debentures set forth below, which describes the material provisions thereof,
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the Indenture to which reference is hereby made. The
form of Indenture has been filed as an exhibit to the Registration Statement
of which this Prospectus Supplement and accompanying Prospectus form a part.
Concurrently with the issuance of the Series D Preferred Securities, the
Series D Issuer will invest the proceeds thereof, together with the
consideration paid by the Corporation for the Series D Common Securities, in
the Series D Subordinated Debentures issued by the Corporation. The Series D
Subordinated Debentures will bear interest at the annual rate of % of the
principal amount thereof, payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each, an "Interest Payment Date"),
commencing , 199 , to the person in whose name each Series D Subordinated
Debenture is registered, subject to certain exceptions, at the close of
business on the Business Day next preceding such Interest Payment Date. It is
anticipated that, until the liquidation, if any, of the Series D Issuer, the
Series D Subordinated Debentures will be held in the name of the Property
Trustee in trust for the benefit of the holders of the Series D Securities.
The amount of interest payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series D Subordinated Debentures is not a Business
Day, then payment of the interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding
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Business Day, in each case with the same force and effect as if made on the
date such payment was originally payable. Accrued interest that is not paid on
the applicable Interest Payment Date will bear additional interest on the
amount thereof (to the extent permitted by law) at the rate per annum of %
thereof, compounded quarterly from the relevant Interest Payment Date. The
term "interest" as used herein shall include quarterly interest payments,
interest on quarterly interest payments not paid on the applicable Interest
Payment Date and Additional Sums (as defined below), as applicable.
The Series D Subordinated Debentures will be issued as a series of junior
subordinated deferrable interest debentures under the Indenture. The Series D
Subordinated Debentures will mature on , 2027 (such date, as it may be
shortened or extended as hereinafter described, the "Stated Maturity"). Such
date may be shortened at any time by the Corporation to any date not earlier
than , 2002, subject to the Corporation's commitment to the Federal
Reserve not to do so without its prior approval if such approval is then
required under applicable Federal Reserve capital guidelines or policies. Such
date may also be extended at any time at the election of the Corporation for
one or more periods, but in no event to a date later than , 2046,
provided that at the time such election is made and at the time of extension
(i) the Corporation is not in bankruptcy, otherwise insolvent or in
liquidation, (ii) the Corporation is not in default in the payment of any
interest or principal on the Series D Subordinated Debentures, (iii) if the
Series D Issuer has not been liquidated, the Series D Issuer is not in arrears
on payments of Distributions on the Series D Preferred Securities and no
deferred Distributions are accumulated, (iv) the Series D Subordinated
Debentures are rated not less than BBB- by Standard & Poor's or Baa3 by
Moody's or the equivalent by any other nationally recognized statistical
rating organization and (v) after such extension the Series D Subordinated
Debentures shall not have a remaining term to maturity of more than 30 years.
In the event the Corporation elects to shorten or extend the Stated Maturity
of the Series D Subordinated Debentures, it shall give notice to the Debenture
Trustee, and the Debenture Trustee shall give notice of such shortening or
extension to the holders of the Series D Subordinated Debentures no more than
30 and no less than 60 days prior to the effectiveness thereof.
The Series D Subordinated Debentures will be unsecured and will rank junior
and be subordinate in right of payment to all Senior Debt of the Corporation.
See "Description of Junior Subordinated Debentures--Subordination" in the
accompanying Prospectus. Substantially all of the Corporation's existing
indebtedness constitutes Senior Debt. Because the Corporation is a holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary, including The Bank and The Bank of New York
(Delaware), upon such subsidiary's liquidation or reorganization or otherwise
(and thus the ability of holders of the Series D Preferred Securities to
benefit indirectly from such distribution), is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the Series
D Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Series D
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Series D Subordinated Debentures. The Indenture does not limit
the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture or any
existing or other indenture that the Corporation may enter into in the future
or otherwise. See "Description of Junior Subordinated Debentures--
Subordination" in the accompanying Prospectus.
OPTION TO DEFER INTEREST PAYMENTS
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture at any time or
from time to time during the term of the Series D Subordinated Debentures to
defer payment of interest on the Series D Subordinated Debentures for a period
not exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the Stated Maturity of the
Series D Subordinated Debentures. At the end of such Extension Period, the
Corporation must pay all interest then accrued and unpaid on the Subordinated
Debentures (together with interest on such unpaid interest at the annual rate
of %, compounded quarterly from the relevant Interest Payment Date, to the
extent permitted by applicable law). During an Extension Period, interest will
continue to accrue and holders of Series D Subordinated Debentures (or holders
of Series D Preferred Securities while such series is
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outstanding) will be required to accrue interest income for United States
federal income tax purposes. See "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation (including
other Junior Subordinated Debentures) that rank pari passu in all respects
with or junior in interest to the Series D Subordinated Debentures (other than
(a) repurchases, redemptions or other acquisitions of shares of capital stock
of the Corporation in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of
capital stock of the Corporation (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange or conversion of any class or series of the
Corporation's capital stock (or any capital stock of a subsidiary of the
Corporation) for any class or series of the Corporation's capital stock or of
any class or series of the Corporation's indebtedness for any class or series
of the Corporation's capital stock, (c) the purchase of fractional interests
in shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise
of such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such stock).
Prior to the termination of any such Extension Period, the Corporation may
further defer the payment of interest on the Series D Subordinated Debentures,
provided that no Extension Period may exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Series D Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all interest then
accrued and unpaid (together with interest thereon at the rate of % per
annum compounded quarterly, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election to
begin such Extension Period at least one Business Day prior to the earlier of
(i) the date interest on the Series D Subordinated Debentures would have been
payable except for the election to begin such Extension Period or (ii) the
date the Administrative Trustees are required to give notice to the New York
Stock Exchange, the Nasdaq National Market or other applicable stock exchange
or automated quotation system on which the Series D Preferred Securities are
then listed or quoted or to holders of Series D Subordinated Debentures of the
record date or (iii) the date such interest is payable, but in any event not
less than one Business Day prior to such record date. The Debenture Trustee
shall give notice of the Corporation's election to begin a new Extension
Period to the holders of the Series D Subordinated Debentures. There is no
limitation on the number of times that the Corporation may elect to begin an
Extension Period. See "Description of Junior Subordinated Debentures--Option
to Defer Interest Payments" in the accompanying Prospectus.
ADDITIONAL SUMS
If the Series D Issuer is required to pay any additional taxes, duties or
other governmental charges as a result of a Tax Event, the Corporation will
pay as additional amounts on the Series D Subordinated Debentures such amounts
as shall be required so that the Distributions payable by the Series D Issuer
shall not be reduced as a result of any such additional taxes, duties or other
governmental charges.
REDEMPTION
The Series D Subordinated Debentures are redeemable prior to maturity at the
option of the Corporation (i) on or after , 2002, in whole at any time or
in part from time to time, or (ii) at any time in whole (but not in part)
prior to , 2002 and within 90 days following the occurrence and
continuation of a Tax
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Event or Capital Treatment Event, in either case at a redemption price equal
to the accrued and unpaid interest on the Series D Subordinated Debentures so
redeemed to the date fixed for redemption, plus 100% of the principal amount
thereof. See "Description of Junior Subordinated Debentures--Redemption" in
the accompanying Prospectus.
DISTRIBUTION OF SERIES D SUBORDINATED DEBENTURES
As described under "Certain Terms of Series D Preferred Securities--
Liquidation of Series D Issuer and Distribution of Series D Subordinated
Debentures to Holders", under certain circumstances involving the termination
of the Series D Issuer, Series D Subordinated Debentures may be distributed to
the holders of the Series D Preferred Securities in exchange therefor upon
liquidation of the Series D Issuer after satisfaction of liabilities to
creditors of the Series D Issuer as provided by applicable law. If distributed
to holders of Series D Preferred Securities, the Series D Subordinated
Debentures will initially be issued in the form of one or more global
securities and DTC, or any successor depositary for the Series D Preferred
Securities, will act as depositary for the Series D Subordinated Debentures.
It is anticipated that the depositary arrangements for the Series D
Subordinated Debentures would be substantially identical to those in effect
for the Series D Preferred Securities. If Series D Subordinated Debentures are
distributed to the holders of Series D Preferred Securities in exchange
therefor upon liquidation of the Series D Issuer, the Corporation will use its
best efforts to list the Series D Subordinated Debentures on the New York
Stock Exchange or such other stock exchanges or automated quotation system, if
any, on which the Series D Preferred Securities are then listed or quoted.
There can be no assurance as to the market price of any Series D Subordinated
Debentures that may be distributed to the holders of Series D Preferred
Securities.
REGISTRATION OF SERIES D SUBORDINATED DEBENTURES
The Series D Subordinated Debentures will be represented by global
certificates registered in the name of DTC or its nominee. Beneficial
interests in the Series D Subordinated Debentures will be shown on, and
transfers thereof will be effected only through, records maintained by
Participants in DTC. Except as described below and in the accompanying
Prospectus, Series D Subordinated Debentures in certificated form will not be
issued in exchange for the global certificates. See "Book-Entry Issuance" in
the accompanying Prospectus.
A global security shall be exchangeable for Series D Subordinated Debentures
registered in the names of persons other than DTC or its nominee only if (i)
DTC notifies the Corporation that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have
been appointed, or if at any time DTC ceases to be a clearing agency
registered under the Exchange Act, at a time when DTC is required to be so
registered to act as such depositary, (ii) the Corporation in its sole
discretion determines that such global security shall be so exchangeable, or
(iii) there shall have occurred and be continuing an event of default under
the Indenture with respect to the Series D Subordinated Debentures. Any global
security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for definitive certificates registered in such names as DTC shall
direct. It is expected that such instructions will be based upon directions
received by DTC from its Participants with respect to ownership of beneficial
interests in such global security. In the event that Series D Subordinated
Debentures are issued in definitive form, such Series D Subordinated
Debentures will be in denominations of $ and integral multiples thereof and
may be transferred or exchanged at the offices described below.
Payments on Series D Subordinated Debentures represented by a global
security will be made to DTC, as the depositary for the Series D Subordinated
Debentures. In the event Series D Subordinated Debentures are issued in
certificated form, principal and interest will be payable, the transfer of the
Series D Subordinated Debentures will be registrable, and Series D
Subordinated Debentures will be exchangeable for Series D Subordinated
Debentures of other denominations of a like aggregate principal amount, at the
corporate office of the Debenture Trustee in New York, New York, or at the
offices of any paying agent or transfer agent appointed by the Corporation,
provided that payment of interest may be made at the option of the Corporation
by check mailed to the address of the persons entitled thereto or by wire
transfer. In addition, if the Series D Subordinated
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Debentures are issued in certificated form, the record dates for payment of
interest will be the 15th day of the last month of each calendar quarter. For
a description of DTC and the terms of the depositary arrangements relating to
payments, transfers, voting rights, redemptions and other notices and other
matters, see "Book-Entry Issuance" in the accompanying Prospectus.
CERTAIN TERMS OF SERIES D GUARANTEE
The Series D Guarantee guarantees to the holders of the Series D Preferred
Securities the following payments, to the extent not paid by the Series D
Issuer: (i) any accumulated and unpaid Distributions required to be paid on
the Series D Preferred Securities, to the extent that the Series D Issuer has
funds on hand available therefor at such time, (ii) the Redemption Price with
respect to any Series D Preferred Securities called for redemption, to the
extent that the Series D Issuer has funds on hand available therefor at such
time, and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of the Series D Issuer (unless the Series D Subordinated
Debentures are distributed to holders of the Series D Preferred Securities),
the lesser of (a) the aggregate of the Liquidation Amount and all accumulated
and unpaid Distributions to the date of payment, to the extent that the Series
D Issuer has funds on hand available therefor at such time, and (b) the amount
of assets of the Series D Issuer remaining available for distribution to
holders of the Series D Preferred Securities after payment of creditors of the
Series D Issuer as required by applicable law. The Series D Guarantee will be
qualified as an indenture under the Trust Indenture Act. The First National
Bank of Chicago will act as the Guarantee Trustee for the purposes of
compliance with the Trust Indenture Act and will hold the Series D Guarantee
for the benefit of the holders of the Series D Preferred Securities. The First
National Bank of Chicago will also act as Debenture Trustee for the Series D
Subordinated Debentures and as Property Trustee.
The holders of not less than a majority in aggregate Liquidation Amount of
the Series D Preferred Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect to the Series D Guarantee or to direct the
exercise of any trust power conferred upon the Guarantee Trustee under the
Series D Guarantee. Any holder of the Series D Preferred Securities may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Series D Guarantee without first instituting a legal
proceeding against the Series D Issuer, the Guarantee Trustee or any other
person or entity. If the Corporation were to default on its obligation to pay
amounts payable under the Series D Subordinated Debentures, the Series D
Issuer would lack funds for the payment of Distributions or amounts payable on
redemption of the Series D Preferred Securities or otherwise, and, in such
event, holders of the Series D Preferred Securities would not be able to rely
upon the Series D Guarantee for payment of such amounts. Instead, if any event
of default under the Indenture shall have occurred and be continuing and such
event is attributable to the failure of the Corporation to pay interest or
premium, if any, on or principal of the Series D Subordinated Debentures on
the applicable payment date, then a holder of Series D Preferred Securities
may institute a Direct Action against the Corporation pursuant to the terms of
the Indenture for enforcement of payment to such holder of the principal of or
interest or premium, if any, on such Series D Subordinated Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Series D
Preferred Securities of such holder. In connection with such Direct Action,
the Corporation will have a right to set-off under the Indenture to the extent
of any payment made by the Corporation to such holder of Series D Securities
in the Direct Action. Except as described herein, holders of Series D
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Series D Subordinated Debentures or assert
directly any other rights in respect of the Series D Subordinated Debentures.
See "Description of Guarantees" in the accompanying Prospectus. The Trust
Agreement provides that each holder of Series D Preferred Securities by
acceptance thereof agrees to the provisions of the Series D Guarantee, the
Expense Agreement and the Indenture.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of Series D Preferred
Securities. This summary only addresses the tax consequences to a person that
acquires Series D Preferred Securities on their original issue at their
original offering price and that is (i) an individual citizen or resident of
the United States, (ii) a corporation or partnership organized in or under the
laws of the United States or any state thereof or the District of Columbia,
(iii) an estate the income of which is subject to United States federal income
tax without regard to its source or (iv) a trust if a United States court is
able to exercise primary supervision over the administration of the trust and
one or more United States persons have authority to control all substantial
decisions of the trust (a "United States Person"). This summary does not
address all tax consequences that may be applicable to a United States Person
that is a beneficial owner of Series D Preferred Securities, nor does it
address the tax consequences to (i) persons that are not United States
Persons, (ii) persons that may be subject to special treatment under United
States federal income tax law, such as banks, insurance companies, thrift
institutions, regulated investment companies, real estate investment trusts,
tax-exempt organizations, traders in securities that elect to mark to market
and dealers in securities or currencies, (iii) persons that will hold Series D
Preferred Securities as part of a position in a "straddle" or as part of a
"hedging," "conversion" or other integrated investment transaction for federal
income tax purposes, (iv) persons whose functional currency is not the United
States dollar or (v) persons that do not hold Series D Preferred Securities as
capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Sullivan & Cromwell, counsel to the Corporation and
the Series D Issuer. This summary is based upon the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations, Internal Revenue Service
rulings and pronouncements and judicial decisions now in effect, all of which
are subject to change at any time. Such changes may be applied retroactively
in a manner that could cause the tax consequences to vary substantially from
the consequences described below, possibly adversely affecting a beneficial
owner of Series D Preferred Securities. In particular, legislation has been
proposed in the past that could adversely affect the Corporation's ability to
deduct interest on the Series D Subordinated Debentures, which may in turn
permit the Corporation to cause a redemption of the Series D Preferred
Securities. See "--Possible Tax Law Changes." The authorities on which this
summary is based are subject to various interpretations, and it is therefore
possible that the federal income tax treatment of the purchase, ownership and
disposition of Series D Preferred Securities may differ from the treatment
described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES D PREFERRED SECURITIES,
AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF THE SERIES D ISSUER
Under current law and assuming compliance with the terms of the Trust
Agreement and certain factual matters, the Series D Issuer will not be
classified as an association taxable as a corporation for United States
federal income tax purposes. As a result, each beneficial owner of Series D
Preferred Securities (a "Securityholder") will be required to include in its
gross income its pro rata share of the interest income, including original
issue discount, paid or accrued with respect to the Series D Subordinated
Debentures whether or not cash is actually distributed to the Securityholders.
See "--Interest Income and Original Issue Discount." No amount included in
income with respect to the Series D Preferred Securities will be eligible for
the dividends-received deduction.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under Treasury regulations applicable to debt instruments issued on or after
August 13, 1996 (the "Regulations"), a contingency that stated interest will
not be timely paid that is "remote", because of the terms
S-22
<PAGE>
of the relevant debt instrument, will be ignored in determining whether such
debt instrument is issued with original issue discount ("OID"). As a result of
terms and conditions of the Series D Subordinated Debentures that prohibit
certain payments with respect to the Corporation's capital stock and
indebtedness if the Corporation elects to extend interest payment periods, the
Corporation believes that the likelihood of its exercising its option to defer
payments is remote. Based on the foregoing, the Corporation believes that the
Series D Subordinated Debentures will not be considered to be issued with OID
at the time of their original issuance and, accordingly, a Securityholder
should include in gross income such holder's allocable share of interest on
the Series D Subordinated Debentures.
If the option to defer any payment of interest was determined not to be
"remote" or if the Corporation exercises its option to defer any payment of
interest, the Series D Subordinated Debentures would be treated as issued with
OID at the time of issuance or at the time of such exercise, as the case may
be, and all stated interest on the Series D Subordinated Debentures would
thereafter be treated as OID as long as the Series D Subordinated Debentures
remained outstanding. In such event, all of a Securityholder's taxable
interest income with respect to the Series D Subordinated Debentures would be
accounted for as OID on a constant yield method regardless of such holder's
method of tax accounting, and actual distributions of stated interest would
not be reported as taxable income. Consequently, a Securityholder would be
required to include in gross income OID even though the Corporation would not
make any actual cash payments during an Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the Internal Revenue Service (the "IRS"), and it is
possible that the IRS could take a position contrary to the interpretation
herein.
Because income on the Series D Preferred Securities will constitute interest
or OID, corporate Securityholders will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the Series D
Preferred Securities.
DISTRIBUTION OF SERIES D SUBORDINATED DEBENTURES TO HOLDERS OF SERIES D
PREFERRED SECURITIES
Under current law, a distribution by the Series D Issuer of the Series D
Subordinated Debentures as described under the caption "Certain Terms of
Series D Preferred Securities--Liquidation of Series D Issuer and Distribution
of Series D Subordinated Debentures to Holders" will be non-taxable and will
result in the Securityholder receiving directly its pro rata share of the
Series D Subordinated Debentures previously held indirectly through the Series
D Issuer, with a holding period and aggregate-tax basis equal to the holding
period and aggregate-tax basis such Securityholder had in its Series D
Preferred Securities before such distribution. If, however, the liquidation of
the Series D Issuer were to occur because the Series D Issuer is subject to
United States Federal income tax with respect to income accrued or received on
the Series D Subordinated Debentures, as the case would be if the Series D
Issuer were treated as an association taxable as a corporation, the
distribution of Series D Subordinated Debentures to Securityholders by the
Series D Issuer would be a taxable event to the Series D Issuer and each
Securityholder, and each Securityholder would recognize gain or loss as if the
Securityholder had exchanged its Series D Preferred Securities for the Series
D Subordinated Debentures it received upon the liquidation of the Series D
Issuer. A Securityholder will include interest in income in respect of Series
D Subordinated Debentures received from the Series D Issuer in the manner
described above under "--Interest Income and Original Issue Discount."
SALE OR REDEMPTION OF SERIES D PREFERRED SECURITIES
A Securityholder that sells (including a redemption for cash) Series D
Preferred Securities will recognize gain or loss equal to the difference
between its adjusted-tax basis in the Series D Preferred Securities and the
amount realized on the sale of such Series D Preferred Securities. Assuming
that the Corporation does not exercise its option to defer payment of interest
on the Series D Subordinated Debentures and the Series D Subordinated
Debentures are not considered issued with OID, a Securityholder's adjusted tax
basis in the Series D Preferred Securities generally will be its initial
purchase price. If the Series D Subordinated Debentures are deemed to be
issued with OID, as a result of the Corporation's deferral of interest
payments, a Securityholder's
S-23
<PAGE>
adjusted tax basis in the Series D Preferred Securities generally will be its
initial purchase price, increased by OID previously includible in such
Securityholder's gross income to the date of disposition and decreased by
Distributions or other payments received on the Series D Preferred Securities
since and including the date of the first Extension Period. Such gain or loss
generally will be a capital gain or loss (except to the extent any amount
realized is treated as a payment of accrued interest with respect to such
Securityholder's pro rata share of the Series D Subordinated Debentures
required to be included in income). Capital gain on the sale of Series D
Preferred Securities that have been held for more than eighteen months will be
subject to a 20% maximum tax rate and capital gain on the sale of Series D
Preferred Securities that have been held for more than one year but less than
eighteen months will be subject to a 28% maximum tax rate.
Should the Corporation exercise its option to defer any payment of interest
on the Series D Subordinated Debentures, the Series D Preferred Securities may
trade at a price that does not accurately reflect the value of accrued but
unpaid interest with respect to the underlying Series D Subordinated
Debentures. In the event of such a deferral, a Securityholder who disposes of
its Series D Preferred Securities between record dates for payments of
distributions thereon will be required to include in income as ordinary income
accrued but unpaid interest on the Series D Subordinated Debentures to the
date of disposition and to add such amount to its adjusted-tax basis in its
Series D Preferred Securities. To the extent the selling price is less than
the Securityholder's adjusted-tax basis, such holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied
to offset ordinary income for United States federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest income paid and OID accrued on the Series D Preferred
Securities held of record by United States Persons (other than corporations
and other exempt Securityholders) will be reported to the IRS. "Backup"
withholding at a rate of 31% will apply to payments of interest to nonexempt
United States Persons unless the Securityholder furnishes its taxpayer
identification number in the manner prescribed in applicable Treasury
Regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions.
Payment of the proceeds from the disposition of Series D Preferred
Securities to or through the United States office of a broker is subject to
information reporting and backup withholding unless the holder or beneficial
owner establishes an exemption from information reporting and backup
withholding.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information
is furnished to the IRS.
It is anticipated that income on the Series D Preferred Securities will be
reported to holders on Form 1099 and mailed to holders of the Series D
Preferred Securities by January 31 following each calendar year.
POSSIBLE TAX LAW CHANGES
On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Act") was signed by
President Clinton. The Act did not adopt several tax law changes that the
President had originally proposed that, if such changes had been enacted,
would have denied the Corporation the ability to deduct interest on the Series
D Subordinated Debentures. There can be no assurance that future legislative
proposals or final legislation will not affect the ability of the Corporation
to deduct interest on the Series D Subordinated Debentures. Such a change
could give rise to a Tax Event, which may permit the Corporation to cause a
redemption of the Series D Preferred Securities, as described more fully under
"Description of Preferred Securities--Redemption or Exchange."
S-24
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Corporation and the Series D Issuer have agreed that the Series D Issuer
will sell to (the "Underwriters"), and the Underwriters have
agreed to purchase from the Series D Issuer, the respective number of Series D
Preferred Securities set forth opposite their names below. In the Underwriting
Agreement, the several Underwriters have agreed, subject to the terms and
conditions set forth therein, to purchase all the Series D Preferred
Securities offered hereby if any of the Series D Preferred Securities are
purchased. In the event of default by an Underwriter, the Underwriting
Agreement provides that, in certain circumstances, the purchase commitments of
the nondefaulting Underwriters may be increased or the Underwriting Agreement
may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
SERIES D
PREFERRED
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
----
Total...........................................................
====
</TABLE>
The Underwriters propose initially to offer the Series D Preferred
Securities to the public at the public offering price set forth on the cover
page of this Prospectus Supplement and to certain dealers at such price less a
concession not in excess of $ per Series D Preferred Securities. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $. per Series D Preferred Securities to certain other dealers. After the
initial public offering, the public offering price, concession and discount
may be changed.
The Series D Issuer has granted the Underwriters an option exercisable for
10 days after the date of this Prospectus Supplement to purchase up to an
aggregate of additional Series D Preferred Securities solely to cover
over-allotments, if any. If the Underwriters exercise their over-allotment
option, the Underwriters have severally agreed, subject to certain conditions,
to purchase approximately the same percentage thereof that the number of
Series D Preferred Securities to be purchased by each of them, as shown in the
foregoing table, bears to the Series D Preferred Securities offered.
In view of the fact that the proceeds from the sale of the Series D
Preferred Securities will be used to purchase the Series D Subordinated
Debentures issued by the Corporation, the Underwriting Agreement provides that
the Corporation will pay as Underwriters' compensation for the Underwriters'
arranging the investment therein of such proceeds an amount of $ per Series
D Preferred Securities for the accounts of the several Underwriters.
The Corporation and the Series D Issuer have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including the earlier of (i) the termination of trading restrictions on the
Series D Preferred Securities, as determined by the Underwriters, and (ii) 30
days after the closing date, they will not offer, sell, contract to sell or
otherwise dispose of any Preferred Securities, any other beneficial interests
in the assets of the Series D Issuer, or any preferred securities or any other
securities of the Series D Issuer or the Corporation which are substantially
similar to the Series D Preferred Securities, including any guarantee of such
securities, or any securities convertible into or exchangeable for or
representing the right to receive securities, preferred securities or any such
substantially similar securities of either the Series D Issuer or the
Corporation, without the prior written consent of the Underwriters, except for
the Series D Preferred Securities offered in connection with this offering.
S-25
<PAGE>
Prior to this offering, there has been no public market for the Series D
Preferred Securities. Application will be made to list the Series D Preferred
Securities on the New York Stock Exchange. Trading of the Series D Preferred
Securities on the New York Stock Exchange is expected to commence within a 30-
day period after the initial delivery of the Series D Preferred Securities.
The Underwriters have advised the Corporation that they intend to make a
market in the Series D Preferred Securities prior to commencement of trading
on the New York Stock Exchange, but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Series D Preferred
Securities.
In order to meet one of the requirements for listing the Series D Preferred
Securities on the New York Stock Exchange, the Underwriters will undertake to
sell lots of 100 or more Series D Preferred Securities to a minimum of 400
beneficial holders.
The Corporation and the Series D Issuer have agreed to indemnify the several
Underwriters against, or contribute to payments that the Underwriters may be
required to make in respect of, certain liabilities, including liabilities
under the Securities Act of 1933, as amended.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to the Corporation and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and commissions.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Series D
Preferred Securities, the enforceability of the Trust Agreement and the
formation of the Series D Issuer will be passed upon by Richards, Layton &
Finger, P.A., One Rodney Square, Wilmington, Delaware 19801, special Delaware
Counsel to the Corporation and the Series D Issuer. The validity of the Series
D Guarantee and the Series D Subordinated Debentures will be passed upon for
the Corporation by Sullivan & Cromwell, 125 Broad Street, New York, New York
10004 and for the Underwriters by Milbank, Tweed, Hadley & McCloy, One Chase
Manhattan Plaza, New York, New York 10005. Milbank, Tweed, Hadley & McCloy
will rely on the opinion of Richards, Layton & Finger, P.A. as to matters of
Delaware law. Certain matters relating to United States federal income tax
considerations will be passed upon for the Corporation by Sullivan & Cromwell.
Milbank, Tweed, Hadley & McCloy from time to time performs legal services for
the Corporation.
S-26
<PAGE>
$500,000,000
THE BANK OF NEW YORK COMPANY, INC.
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
BNY CAPITAL III
BNY CAPITAL IV
BNY CAPITAL V
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY
THE BANK OF NEW YORK COMPANY, INC.
The Bank of New York, Company, Inc., a New York corporation (the
"Corporation"), may from time to time offer in one or more series or issuances
its junior subordinated deferrable interest debentures (the "Junior
Subordinated Debentures"). The Junior Subordinated Debentures will be
unsecured and subordinate and junior in right of payment to all Senior Debt
(as defined in "Description of Junior Subordinated Debentures--Subordination")
of the Corporation. If provided in an accompanying Prospectus Supplement, the
Corporation will have the right to defer payments of interest on any series of
Junior Subordinated Debentures by extending the interest payment period
thereon at any time or from time to time for up to such number of consecutive
interest payment periods (which shall not extend beyond the Stated Maturity
(as defined herein) of the Junior Subordinated Debentures) with respect to
each deferral period as may be specified in such Prospectus Supplement (each,
an "Extension Period"). In such circumstances, however, the Corporation would
not be permitted, subject to certain exceptions set forth herein, to declare
or pay any dividends, distributions or other payments with respect to, or
repay, repurchase, redeem or otherwise acquire, the Corporation's capital
stock or debt securities that rank pari passu in all respects with or junior
to such series of Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures--Option to Defer Interest Payments" and "--
Restrictions on Certain Payments".
BNY Capital III, BNY Capital IV and BNY Capital V, each a statutory business
trust created under the laws of the State of Delaware (each, an "Issuer," and
collectively, the "Issuers"), may severally offer, from time to time,
preferred securities (the "Preferred Securities") representing preferred
beneficial interests in such Issuer. The Corporation will be the owner of the
common securities representing common ownership interests in such Issuer (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities"). Holders of the Preferred Securities will be entitled to receive
preferential cumulative cash distributions ("Distributions") accumulating from
the date of original issuance and payable periodically as provided in an
accompanying Prospectus Supplement. Concurrently with the issuance by
(continued on next page)
----------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE 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 December , 1997
<PAGE>
(cover page continued)
an Issuer of its Preferred Securities, such Issuer will invest the proceeds
thereof and of any contributions received in respect of the Common Securities
in a corresponding series of the Corporation's Junior Subordinated Debentures
(the "Corresponding Junior Subordinated Debentures") with terms corresponding
to the terms of that Issuer's Preferred Securities (the "Related Preferred
Securities"). The Corresponding Junior Subordinated Debentures will be the
sole assets of each Issuer, and payments under the Corresponding Junior
Subordinated Debentures will be the only revenue of each Issuer. If provided
in an accompanying Prospectus Supplement, the Corporation may, upon receipt of
approval of the Federal Reserve (if such approval is then required), redeem
the Corresponding Junior Subordinated Debentures (and cause the redemption of
the related Trust Securities) or may terminate each Issuer and cause the
Corresponding Junior Subordinated Debentures to be distributed to the holders
of the Related Preferred Securities in liquidation of their interests in such
Issuer. See "Description of Preferred Securities--Liquidation Distribution
Upon Termination".
If provided in an accompanying Prospectus Supplement, the Corporation will
have the right to defer payments of interest on any series of Corresponding
Junior Subordinated Debentures. If interest payments are so deferred,
Distributions on the Related Preferred Securities will also be deferred and
the Corporation will not be permitted, subject to certain exceptions set forth
herein, to declare or pay any cash distributions with respect to the
Corporation's capital stock or debt securities that rank pari passu with or
junior to the Corresponding Junior Subordinated Debentures. During an
Extension Period, Distributions will continue to accumulate (and the Preferred
Securities will accumulate additional Distributions thereon at the rate per
annum set forth in the related Prospectus Supplement). See "Description of
Preferred Securities--Distributions".
Taken together, the Corporation's obligations under each series of Junior
Subordinated Debentures, the Indenture, the related Trust Agreement, the
related Expense Agreement and the related Guarantee (each, as defined herein),
in the aggregate, provide a full, irrevocable and unconditional guarantee of
payments of distributions and other amounts due on the related series of
Preferred Securities. See "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures, the Expense Agreements and the
Guarantees--Full and Unconditional Guarantee". The payment of Distributions
with respect to the Preferred Securities of each Issuer and payments on
liquidation or redemption with respect to such Preferred Securities, in each
case out of funds held by such Issuer, are each irrevocably guaranteed by the
Corporation to the extent described herein (each, a "Guarantee"). See
"Description of Guarantees". The obligations of the Corporation under each
Guarantee will be subordinate and junior in right of payment to all Senior
Debt of the Corporation.
The Junior Subordinated Debentures and Preferred Securities may be offered
in amounts, at prices and on terms to be determined at the time of offering;
provided, however, the aggregate initial public offering price of all Junior
Subordinated Debentures (other than Corresponding Junior Subordinated
Debentures) and Preferred Securities (including the Corresponding Junior
Subordinated Debentures) issued pursuant to the Registration Statement of
which this Prospectus forms a part shall not exceed $500,000,000. Certain
specific terms of the Junior Subordinated Debentures or Preferred Securities
in respect of which this Prospectus is being delivered will be described in an
accompanying Prospectus Supplement, including without limitation and where
applicable and to the extent not set forth herein, (a) in the case of Junior
Subordinated Debentures, the specific designation, aggregate principal amount,
denominations, Stated Maturity (including any provisions for the shortening or
extension thereof), interest payment dates, interest rate (which may be fixed
or variable) or method of calculating interest, if any, applicable Extension
Period or interest deferral terms, if any, place or places where principal,
premium, if any, and interest, if any, will be payable, any terms of
redemption, any sinking fund provisions, terms for any conversion or exchange
into other securities, initial offering or purchase price, methods of
distribution and any other special terms, and (b) in the case of Preferred
Securities, the identity of the Issuer, specific title, aggregate amount,
stated liquidation amount, number of securities, Distribution rate or method
of calculating such rate, Distribution payment dates, applicable Distribution
deferral terms, if any, place or places where Distributions will be payable,
any terms of redemption, exchange, initial offering or purchase price, methods
of distribution and any other special terms.
2
<PAGE>
(cover page continued)
The Prospectus Supplement also will contain information, as applicable,
about certain United States Federal income tax consequences relating to the
Junior Subordinated Debentures or Preferred Securities.
The Junior Subordinated Debentures and Preferred Securities may be sold to
or through underwriters, through dealers, remarketing firms or agents or
directly to purchasers. See "Plan of Distribution". The names of any
underwriters, dealers, remarketing firms or agents involved in the sale of
Junior Subordinated Debentures or Preferred Securities in respect of which
this Prospectus is being delivered and any applicable fee, commission or
discount arrangements with them will be set forth in a Prospectus Supplement.
The Prospectus Supplement will state whether the Junior Subordinated
Debentures or Preferred Securities will be listed on any national securities
exchange or automated quotation system. If the Junior Subordinated Debentures
or Preferred Securities are not listed on any national securities exchange or
automated quotation system, there can be no assurance that there will be a
secondary market for the Junior Subordinated Debentures or Preferred
Securities.
This Prospectus may not be used to consummate sales of Junior Subordinated
Debentures or Preferred Securities unless accompanied by a Prospectus
Supplement.
3
<PAGE>
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities of the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the regional offices of the Commission
located at 7 World Trade Center, 13th Floor, Suite 1300, New York, New York
10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material can also be obtained at
prescribed rates by writing to the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material may also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. In addition, such reports, proxy statements and other
information concerning the Corporation can be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Corporation and the Issuers have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Corporation and the securities offered hereby,
reference is made to the Registration Statement and the exhibits and the
financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission at the addresses set forth above or
through the Commission's home page on the Internet. Statements made in this
Prospectus concerning the contents of any documents referred to herein are not
necessarily complete, and in each instance are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement.
No separate financial statements of any Issuer have been included herein.
The Corporation and the Issuers do not consider that such financial statements
would be material to holders of the Preferred Securities because each Issuer
is a newly formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Corresponding Junior
Subordinated Debentures of the Corporation and issuing the Trust Securities.
Furthermore, taken together, the Corporation's obligations under each series
of Corresponding Junior Subordinated Debentures, the Indenture, the related
Trust Agreement, the related Expense Agreement and the related Guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the related Preferred
Securities of an Issuer. See "The Issuers", "Description of Preferred
Securities", "Description of Junior Subordinated Debentures--Corresponding
Junior Subordinated Debentures" and "Description of Guarantees". In addition,
the Corporation does not expect that any of the Issuers will be filing reports
under the Exchange Act with the Commission.
4
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
1. the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. the Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997; and
3. the Corporation's Current Reports on Form 8-K dated January 16, 1997,
April 14, 1997, June 5, 1997, July 14, 1997 and October 21, 1997.
Each document or report filed by the Corporation pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part
of this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated
or deemed to be incorporated by reference herein, shall be deemed to be
modified or superseded for purposes of the Registration Statement and 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 the Registration Statement or this
Prospectus.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein
(other than exhibits not specifically incorporated by reference into the texts
of such documents). Requests for such documents 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) 495-1784.
5
<PAGE>
THE CORPORATION
The Corporation is a bank holding company subject to the regulation and
supervision of the Federal Reserve Board under the Bank Holding Company Act of
1956, as amended ("BHC Act"). The Corporation is also subject to regulation by
the New York State Banking Department. Its principal wholly-owned banking
subsidiaries are The Bank of New York (the "Bank") and The Bank of New York
(Delaware). The Corporation provides a complete range of banking and other
financial services to corporations and individuals worldwide through its core
businesses: Corporate Banking, Retail Banking, Securities and Other
Processing, Trust, Investment Management and Private Banking and Financial
Market Services.
The Corporation has its principal executive offices at 48 Wall Street, New
York, New York 10286, telephone number (212) 495-1784.
CERTAIN REGULATORY CONSIDERATIONS
The Corporation's principal assets and sources of income are its investments
in its bank subsidiaries, and it is a legal entity separate and distinct from
its 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 Corporation and certain of its affiliates.
DIVIDENDS
The Bank is subject to dividend limitations under the Federal Reserve Act
and the New York Banking Law. Under these statutes, prior regulatory approval
is required for dividends in any year that would exceed the net profits for
such year combined with retained net profits for the prior two years. Also,
the Bank is prohibited from paying a dividend 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, as of September 30, 1997, the Bank
could declare dividends of approximately $1,032 million. As of September 30,
1997, the Bank was not restrained from paying dividends under the second of
the two standards discussed above.
In addition to these statutory tests, the Bank's primary federal regulator
(the Federal Reserve Board), could prohibit a dividend if it determined that
the payment would constitute an unsafe or unsound banking practice. The Board
of Governors of the Federal Reserve System (the "Federal Reserve") has
indicated that, generally, dividends should be paid by banks 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, would not impair its ability 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
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 fully fund 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 nine months of 1997, the Corporation's net
income available to common stockholders was $799 million and it declared
common stock dividends totaling $276 million.
CAPITAL ADEQUACY
The Federal 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)
("Total Capital Ratio") is 8%. At least half of the Total Capital is to be
comprised of common stock,
6
<PAGE>
retained earnings, noncumulative perpetual preferred stock, minority
interests, and for bank holding companies, a limited amount of qualifying
cumulative perpetual preferred stock, less certain intangibles including
goodwill ("Tier 1 capital"). The remainder 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 has established minimum Leverage Ratio
(Tier 1 capital to average total assets) guidelines for bank holding companies
and banks and the FDIC has established substantially identical minimum
leverage requirements for state chartered, FDIC-insured, non-member banks. The
Federal Reserve's guidelines provide for a minimum Leverage Ratio of 3% for
bank holding companies and banks that meet certain specified criteria,
including having the highest regulatory rating. All other banking
organizations will be required to maintain a Leverage Ratio of at least 3%
plus an additional cushion of 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
Federal Reserve will continue to consider a "Tangible Tier 1 Leverage Ratio"
in evaluating proposals for expansion or new activities. The Tangible Tier 1
Leverage Ratio is the ratio of Tier 1 capital, less intangibles not deducted
from Tier 1 capital, to average total assets. As of September 30, 1997, the
Federal Reserve had not advised the Corporation of any specific minimum
Leverage Ratio applicable to it.
Federal bank regulators continue to indicate their desire to raise capital
requirements applicable to banking organizations. The Federal Reserve has
recently added interest rate and market risk components to risk-based capital
requirements.
Certain consolidated ratios of the Corporation are included in the
Corporation's Quarterly Report on Form 10-Q for the third quarter of 1997.
FDICIA
In addition to the effects of the provisions described above, the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") 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." A
depository institution's capital tier will depend upon how its capital levels
compare to various relevant capital measures and certain other factors, as
established by regulation. Under applicable regulations, an FDIC-insured bank
is defined to be well capitalized if it maintains a Leverage Ratio of at least
5%, a Tier 1 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 Capital Ratio
of 8% or greater, a Tier 1 capital ratio of 4% or greater and a Leverage Ratio
of 4% or greater (or a Leverage Ratio of 3% or greater if the institution is
rated composite 1 in its most recent report of examination, subject to
appropriate federal banking agency guidelines). 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.
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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 are
subject to growth limitations and are required to submit a capital restoration
plan. 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. In addition, 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 became 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. 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 September 30, 1997, the Bank and The Bank of New York (Delaware) were
well capitalized. At September 30, 1997, the Bank had leverage, risk-based
total capital and risk-based Tier 1 capital ratios of 7.36%, 10.25% and 7.54%,
respectively. The Bank of New York (Delaware) had leverage, risk-based total
capital and risk-based Tier 1 capital ratios of 8.23%, 12.84% and 7.70%,
respectively.
FDIA
Under the FDIA, 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 after August 9, 1989 in connection with (i) the default of a commonly
controlled FDIC-insured depository institution or (ii) any assistance provided
by the FDIC to a commonly controlled FDIC-insured depository institution in
danger of default. "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.
INTERSTATE BANKING AND BRANCHING LEGISLATION
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
("IBBEA") permits bank holding companies, with Federal Reserve approval, to
acquire banks located in states other than the bank holding company's home
state without regard to whether the transaction is prohibited under state law.
In addition, national banks and state banks with different home states are
permitted to merge across state lines, with the approval of the appropriate
federal banking agency, unless the home state of a participating bank has
passed legislation between the date of enactment of IBBEA and May 31, 1997
expressly prohibiting interstate mergers. Under the IBBEA, states could enact
laws permitting interstate bank merger transactions. A bank may establish and
operate a de novo branch in a state in which the bank does not maintain a
branch if that state expressly permits de novo branching. Once a bank has
established branches in a state through an interstate merger transaction, the
bank may establish and acquire additional branches at any location in the
state where any bank involved in the interstate merger transaction could have
established or acquired branches under applicable federal or state law. A bank
that has established a branch in a state through de novo branching may
establish and acquire additional branches in such state in the same manner and
to the same extent as a bank having a branch in such state as a result of an
interstate merger. If a state opts out of interstate branching within the
specified time period, no bank in any other state may establish a branch in
the state which has opted out, whether through an acquisition or de novo.
OTHER
The Federal Reserve Act limits amounts of, and requires collateral on,
extensions of credit by the Corporation's insured bank subsidiaries to the
Corporation 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
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Corporation 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 Corporation and such affiliates are
limited to 10% of such bank subsidiary's capital and surplus, and in the
aggregate for the Corporation and all such affiliates to 20%.
PROPOSED LEGISLATION
Various bills have been introduced into the United States Congress that
would repeal, in some respects, the provisions of the Glass-Steagall Act which
prohibit certain banking organizations from engaging in certain securities
activities and the provisions of the BHC Act, which prohibit affiliations
between banking organizations and nonbanking organizations. The Corporation
cannot determine the ultimate effect that potential legislation, if enacted,
or implementing regulations, would have upon its financial condition or
results of operations.
Other proposals to change the laws and regulations governing the banking
industry are frequently introduced in Congress, in the state legislatures and
before the various bank regulatory agencies. The likelihood and timing of any
such changes and the impact such changes might have on the Corporation and its
subsidiaries, however, cannot be determined at this time.
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THE ISSUERS
Each Issuer is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement executed by the Corporation, as Depositor of
the Issuer, and the Delaware Trustee (as defined herein) of such Issuer and
(ii) the filing of a certificate of trust with the Delaware Secretary of
State. Each trust agreement will be amended and restated in its entirety
(each, as so amended and restated, a "Trust Agreement") substantially in the
form filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. Each Trust Agreement will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Each Issuer exists for the exclusive purposes of (i) issuing
and selling its Trust Securities, (ii) using the proceeds from the sale of
such Trust Securities to acquire a series of Corresponding Junior Subordinated
Debentures issued by the Corporation, and (iii) engaging in only those other
activities necessary or incidental thereto (such as registering the transfer
of the Trust Securities). Accordingly, the Corresponding Junior Subordinated
Debentures and the right to reimbursement of expenses under the related
Expense Agreement will be the sole assets of each Issuer, and payments under
the Corresponding Junior Subordinated Debentures and the related Expense
Agreement will be the sole revenue of each Issuer.
All of the Common Securities of each Issuer will be owned by the
Corporation. The Common Securities of an Issuer will rank pari passu, and
payments will be made thereon pro rata, with the Preferred Securities of such
Issuer, except that upon the occurrence and continuance of an event of default
under a Trust Agreement resulting from an event of default under the
Indenture, the rights of the Corporation, as holder of the Common Securities,
to payment in respect of Distributions and payments upon liquidation or
redemption will be subordinated to the rights of the holders of the Preferred
Securities of such Issuer. See "Description of Preferred Securities--
Subordination of Common Securities". The Corporation will acquire Common
Securities in an aggregate Liquidation Amount equal to not less than 3% of the
total capital of each Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer's business and affairs
are conducted by its trustees, each appointed by the Corporation as holder of
the Common Securities. The trustees for each Issuer will be The First National
Bank of Chicago, as the Property Trustee (the "Property Trustee"), First
Chicago Delaware Inc., as the Delaware Trustee (the "Delaware Trustee"), and
two individual trustees (the "Administrative Trustees") who are employees or
officers of or affiliated with the Corporation (collectively, the "Issuer
Trustees"). The First National Bank of Chicago, as Property Trustee, will act
as sole indenture trustee under each Trust Agreement for purposes of
compliance with the Trust Indenture Act. The First National Bank of Chicago
will also act as trustee under the Guarantees and the Indenture (each as
defined herein). See "Description of Guarantees" and "Description of Junior
Subordinated Debentures". The holder of the Common Securities of an Issuer, or
the holders of a majority in Liquidation Amount of the Related Preferred
Securities if an event of default under the Trust Agreement for such Issuer
has occurred and is continuing, will be entitled to appoint, remove or replace
the Property Trustee and/or the Delaware Trustee for such Issuer. In no event
will the holders of the Preferred Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights are
vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the applicable Trust
Agreement. The Corporation will pay all fees and expenses related to each
Issuer and the offering of the Preferred Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of each Issuer.
The principal executive office of each issuer is 48 Wall Street, New York,
New York 10286 and its telephone number is (212) 495-1784.
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USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Corporation intends to use the proceeds from the sale of its Junior
Subordinated Debentures (including Corresponding Junior Subordinated
Debentures issued to the Issuers in connection with the investment by the
Issuers of all of the proceeds from the sale of Preferred Securities) for
general corporate purposes, including working capital, capital expenditures,
investments in or loans to subsidiaries, refinancing of debt, including
outstanding commercial paper and other short-term indebtedness, redemption or
repurchase of shares of its outstanding common and preferred stock, the
satisfaction of other obligations or for such other purposes as may be
specified in the applicable Prospectus Supplement.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more series
under a Junior Subordinated Indenture, as supplemented from time to time (as
so supplemented, the "Indenture"), between the Corporation and The First
National Bank of Chicago, as trustee (the "Debenture Trustee"). This summary
of certain terms and provisions of the Junior Subordinated Debentures,
Corresponding Junior Subordinated Debentures and the Indenture, which
summarizes the material provisions thereof, does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
Indenture, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and to the Trust Indenture
Act, to each of which reference is hereby made. The Indenture is qualified
under the Trust Indenture Act. Whenever particular defined terms of the
Indenture (as supplemented or amended from time to time) are referred to
herein or in a Prospectus Supplement, such defined terms are incorporated
herein or therein by reference.
GENERAL
Each series of Junior Subordinated Debentures will rank pari passu with all
other series of Junior Subordinated Debentures and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt (as defined below) of the
Corporation. See "--Subordination". The Corporation is a non-operating holding
company and almost all of the operating assets of the Corporation and its
consolidated subsidiaries are owned by such subsidiaries. The Corporation
relies primarily on dividends from such subsidiaries to meet its obligations.
See "Certain Regulatory Considerations--Dividends". Because the Corporation is
a holding company, the right of the Corporation to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of
the subsidiary, except to the extent the Corporation may itself be recognized
as a creditor of that subsidiary. Accordingly, the Junior Subordinated
Debentures will be effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Junior Subordinated Debentures. Except as otherwise provided
in the applicable Prospectus Supplement, the Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Corporation,
including Senior Debt, whether under the Indenture, any other existing
indenture or any other indenture that the Corporation may enter into in the
future or otherwise. See "--Subordination" and the Prospectus Supplement
relating to any offering of Preferred Securities or Junior Subordinated
Debentures.
The Junior Subordinated Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of the
Corporation's Board of Directors or a committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the Junior Subordinated Debentures: (1) the title of
the Junior Subordinated Debentures; (2) any limit upon the aggregate principal
amount of the Junior Subordinated Debentures; (3) the date or dates on which
the principal of the Junior Subordinated Debentures is payable (the "Stated
Maturity") or the method of determination thereof; (4) the rate or rates, if
any, at which the Junior Subordinated Debentures shall bear interest, the
dates on
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which any such interest shall be payable (the "Interest Payment Dates"), the
right, if any, of the Corporation to defer or extend an Interest Payment Date,
and the record dates for any interest payable on any Interest Payment Date or
the method by which any of the foregoing shall be determined; (5) the place or
places where, subject to the terms of the Indenture as described below under
"--Payment and Paying Agents", the principal of and premium, if any, and
interest on the Junior Subordinated Debentures will be payable and where,
subject to the terms of the Indenture as described below under "--
Denominations, Registration and Transfer," the Junior Subordinated Debentures
may be presented for registration of transfer or exchange and the place or
places where notices and demands to or upon the Corporation in respect of the
Junior Subordinated Debentures and the Indentures may be made ("Place of
Payment"); (6) any period or periods within which or date or dates on which,
the price or prices at which and the terms and conditions upon which Junior
Subordinated Debentures may be redeemed, in whole or in part, at the option of
the Corporation or a holder thereof; (7) the obligation or the right, if any,
of the Corporation or a holder thereof to redeem, purchase or repay the Junior
Subordinated Debentures and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or units)
in which and the other terms and conditions upon which the Junior Subordinated
Debentures shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation; (8) the denominations in which any Junior
Subordinated Debentures shall be issuable if other than denominations of $
and any integral multiple thereof; (9) if other than in U.S. Dollars, the
currency or currencies (including currency unit or units) in which the
principal of (and premium, if any) and interest and Additional Interest, if
any, on the Junior Subordinated Debentures shall be payable, or in which the
Junior Subordinated Debentures shall be denominated; (10) any additions,
modifications or deletions in the events of default under the Indenture or
covenants of the Corporation specified in the Indenture with respect to the
Junior Subordinated Debentures; (11) if other than the principal amount
thereof, the portion of the principal amount of Junior Subordinated Debentures
that shall be payable upon declaration of acceleration of the maturity
thereof; (12) any additions or changes to the Indenture with respect to a
series of Junior Subordinated Debentures as shall be necessary to permit or
facilitate the issuance of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons; (13) any
index or indices used to determine the amount of payments of principal of and
premium, if any, on the Junior Subordinated Debentures and the manner in which
such amounts will be determined; (14) the terms and conditions relating to the
issuance of a temporary Global Security representing all of the Junior
Subordinated Debentures of such series and the exchange of such temporary
Global Security for definitive Junior Subordinated Debentures of such series;
(15) subject to the terms described herein under "--Global Junior Subordinated
Debentures", whether the Junior Subordinated Debentures of the series shall be
issued in whole or in part in the form of one or more Global Securities and,
in such case, the Depositary for such Global Securities, which Depositary
shall be a clearing agency registered under the Exchange Act; (16) the
appointment of any paying agent or agents; (17) the terms and conditions of
any obligation or right of the Corporation or a holder to convert or exchange
the Junior Subordinated Debentures into Preferred Securities; (18) the form of
Trust Agreement, Guarantee Agreement and Expense Agreement, if applicable;
(19) the relative degree, if any, to which such Junior Subordinated Debentures
of the series shall be senior to or be subordinated to other series of such
Junior Subordinated Debentures or other indebtedness of the Corporation in
right of payment, whether such other series of Junior Subordinated Debentures
or other indebtedness are outstanding or not; and (20) any other terms of the
Junior Subordinated Debentures not inconsistent with the provisions of the
Indenture.
Junior Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain United States Federal
income tax consequences and special considerations applicable to any such
Junior Subordinated Debentures will be described in the applicable Prospectus
Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest, if any,
on any Junior Subordinated Debentures is payable in one or more foreign
currencies or currency units, the restrictions, elections, certain United
States Federal income tax consequences, specific terms and other information
with respect to such series
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of Junior Subordinated Debentures and such foreign currency or currency units
will be set forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Junior Subordinated Debentures,
special United States Federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issuable only in registered form
without coupons in denominations of $ and any integral multiple thereof.
Junior Subordinated Debentures of any series will be exchangeable for other
Junior Subordinated Debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same original
issue date and stated maturity and bearing the same interest rate.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate securities registrar or at
the office of any transfer agent designated by the Corporation for such
purpose with respect to any series of Junior Subordinated Debentures and
referred to in the applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in
the Indenture. The Corporation will appoint the Trustee as securities
registrar under the Indenture. If the applicable Prospectus Supplement refers
to any transfer agents (in addition to the securities registrar) initially
designated by the Corporation with respect to any series of Junior
Subordinated Debentures, the Corporation may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that the Corporation
maintains a transfer agent in each place of payment for such series. The
Corporation may at any time designate additional transfer agents with respect
to any series of Junior Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Subordinated Debentures of any series during the period beginning at
the opening of business 15 days before the day of selection for redemption of
Junior Subordinated Debentures of that series and ending at the close of
business on the day of mailing of the relevant notice of redemption or (ii)
transfer or exchange any Junior Subordinated Debentures so selected for
redemption, except, in the case of any Junior Subordinated Debentures being
redeemed in part, any portion thereof not to be redeemed.
GLOBAL JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or in
part in the form of one or more Global Junior Subordinated Debentures that
will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global Junior
Subordinated Debentures may be issued only in fully registered form and in
either temporary or permanent form. Unless and until it is exchanged in whole
or in part for the individual Junior Subordinated Debentures represented
thereby, a Global Junior Subordinated Debenture may not be transferred except
as a whole by the Depositary for such Global Junior Subordinated Debenture to
a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by the Depositary or any
nominee to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Junior Subordinated Debentures will be described in the Prospectus Supplement
relating to such series. The Corporation anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the deposit
of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated
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Debenture or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Junior
Subordinated Debentures represented by such Global Junior Subordinated
Debenture to the accounts of persons that have accounts with such Depositary
("Participants"). Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Junior Subordinated Debentures or
by the Corporation if such Junior Subordinated Debentures are offered and sold
directly by the Corporation. Ownership of beneficial interests in a Global
Junior Subordinated Debenture will be limited to Participants or persons that
may hold interests through Participants. Ownership of beneficial interests in
such Global Junior Subordinated Debenture will be shown on, and the transfer
of that ownership will be effected only through, records maintained by the
applicable Depositary or its nominee (with respect to interests of
Participants) and the records of Participants (with respect to interests of
persons who hold through Participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Junior Subordinated Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture, or its
nominee, is the registered owner of such Global Junior Subordinated Debenture,
such Depositary or such nominee, as the case may be, will be considered the
sole owner or holder of the Junior Subordinated Debentures represented by such
Global Junior Subordinated Debenture for all purposes under the Indenture
governing such Junior Subordinated Debentures. Except as provided below,
owners of beneficial interests in a Global Junior Subordinated Debenture will
not be entitled to have any of the individual Junior Subordinated Debentures
of the series represented by such Global Junior Subordinated Debenture
registered in their names, will not receive or be entitled to receive physical
delivery of any such Junior Subordinated Debentures of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made
to the Depositary or its nominee, as the case may be, as the registered owner
of the Global Junior Subordinated Debenture representing such Junior
Subordinated Debentures. None of the Corporation, the Debenture Trustee, any
Paying Agent, or the Securities Registrar for such Junior Subordinated
Debentures will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Junior Subordinated Debenture representing such Junior
Subordinated Debentures or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Junior
Subordinated Debentures or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of a permanent Global
Junior Subordinated Debenture representing any of such Junior Subordinated
Debentures, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of such Global Junior Subordinated Debenture for such Junior
Subordinated Debentures as shown on the records of such Depositary or its
nominee. The Corporation also expects that payments by Participants to owners
of beneficial interests in such Global Junior Subordinated Debenture held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name." Such payments will
be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and the Corporation
is unable to locate a qualified successor, the Corporation will issue
individual Junior Subordinated Debentures of such series in exchange for the
Global Junior Subordinated Debenture representing such series of Junior
Subordinated Debentures. In addition, the Corporation may at any time and in
its sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Junior Subordinated Debentures, determine not to
have any Junior Subordinated Debentures of such series represented by one or
more Global Junior Subordinated Debentures and, in such event, will issue
certificated Junior Subordinated Debentures of
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such series in exchange for the Global Junior Subordinated Debenture or
Securities representing such series of Junior Subordinated Debentures.
Further, if the Corporation so specifies with respect to the Junior
Subordinated Debentures of a series, an owner of a beneficial interest in a
Global Junior Subordinated Debenture representing Junior Subordinated
Debentures of such series may, on terms acceptable to the Corporation, the
Debenture Trustee and the Depositary for such Global Junior Subordinated
Debenture, receive certificated Junior Subordinated Debentures of such series
in exchange for such beneficial interests, subject to any limitations
described in the Prospectus Supplement relating to such Junior Subordinated
Debentures. In any such instance, an owner of a beneficial interest in a
Global Junior Subordinated Debenture will be entitled to physical delivery of
certificated Junior Subordinated Debentures of the series represented by such
Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so
issued will be issued in denominations, unless otherwise specified by the
Corporation, of $ and integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Junior Subordinated
Debentures will be made at the office of the Debenture Trustee in the City of
New York or at the office of such paying agent or paying agents as the
Corporation may designate from time to time, except that at the option of the
Corporation payment of any interest may be made (i) except in the case of
Global Junior Subordinated Debentures, by check mailed to the address of the
Person entitled thereto as such address shall appear in the securities
register or (ii) by transfer to an account maintained by the person entitled
thereto as specified in the securities register, provided that proper transfer
instructions have been received by the Regular Record Date. Unless otherwise
indicated in the applicable Prospectus Supplement, payment of any interest on
Junior Subordinated Debentures will be made to the person in whose name such
Junior Subordinated Debenture is registered at the close of business on the
Regular Record Date for such interest, except in the case of Defaulted
Interest. The Corporation may at any time designate additional Paying Agents
or rescind the designation of any paying agent; however the Corporation will
at all times be required to maintain a paying agent in each place of payment
for each series of Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any paying agent, or then
held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any)
or interest has become due and payable shall, at the request of the
Corporation, be repaid to the Corporation and the holder of such Junior
Subordinated Debenture shall thereafter look, as a general unsecured creditor,
only to the Corporation for payment thereof.
OPTION TO DEFER INTEREST PAYMENTS
If provided in the applicable Prospectus Supplement, the Corporation will
have the right at any time and from time to time during the term of any series
of Junior Subordinated Debentures to defer payment of interest for up to such
number of consecutive interest payment periods as may be specified in the
applicable Prospectus Supplement (each, an "Extension Period"), subject to the
terms, conditions and covenants, if any, specified in such Prospectus
Supplement, provided that such Extension Period may not extend beyond the
Stated Maturity of such series of Junior Subordinated Debentures. Certain
United States Federal income tax consequences and special considerations
applicable to any such Junior Subordinated Debentures will be described in the
applicable Prospectus Supplement.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation may, at its option and subject to receipt of prior approval by the
Board of Governors of the Federal Reserve System (the "Federal
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Reserve") if such approval is then required under applicable capital
guidelines or policies, redeem the Junior Subordinated Debentures of any
series in whole at any time or in part from time to time. If the Junior
Subordinated Debentures of any series are so redeemable only on or after a
specified date or upon the satisfaction of additional conditions, the
applicable Prospectus Supplement will specify such date or describe such
conditions. Junior Subordinated Debentures in denominations larger than $
may be redeemed in part but only in integral multiples of $ . Except as
otherwise specified in the applicable Prospectus Supplement, the redemption
price for any Junior Subordinated Debenture so redeemed shall equal any
accrued and unpaid interest (including Additional Interest) thereon to the
redemption date, plus 100% of the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Tax Event (as defined below) in respect of a series of Junior Subordinated
Debentures or a Capital Treatment Event (as defined below) shall occur and be
continuing, the Corporation may, at its option and subject to receipt of prior
approval by the Federal Reserve if such approval is then required under
applicable capital guidelines or policies, redeem such series of Junior
Subordinated Debentures in whole (but not in part) at any time within 90 days
following the occurrence of such Tax Event or Capital Treatment Event, at a
redemption price equal to 100% of the principal amount of such Junior
Subordinated Debentures then outstanding plus accrued and unpaid interest to
the date fixed for redemption, except as otherwise specified in the applicable
Prospectus Supplement.
"Tax Event" means the receipt by an Issuer of a series of Preferred
Securities of an opinion of counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change
is effective or which pronouncement or decision is announced on or after the
date of issuance of such Preferred Securities under the Trust Agreement, there
is more than an insubstantial risk that (i) such Issuer is, or will be within
90 days of the date of such opinion, subject to United States Federal income
tax with respect to income received or accrued
on the corresponding series of Corresponding Junior Subordinated Debentures,
(ii) interest payable by the Corporation on such series of Corresponding
Junior Subordinated Debentures is not, or within 90 days of the date of such
opinion, will not be, deductible by the Corporation, in whole or in part, for
United States Federal income tax purposes, or (iii) such Issuer is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
A "Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such
laws, rules or regulations, which amendment or change is effective or which
pronouncement, action or decision is announced on or after the date of
issuance of the Preferred Securities, there is more than an insubstantial risk
that the Corporation will not be entitled to treat an amount equal to the
aggregate Liquidation Amount of the Preferred Securities as "Tier 1 Capital"
(or the then equivalent thereof) for purposes of the capital adequacy
guidelines of the Federal Reserve, as then in effect and applicable to the
Corporation.
Notice of any redemption will be mailed at least 45 days but not more than
75 days before the redemption date to each Holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless the Corporation
defaults in payment of the redemption price, on and after the redemption date
interest shall cease to accrue on such Junior Subordinated Debentures or
portions thereof called for redemption.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will also covenant, as to each series of Junior Subordinated
Debentures, that it will not, and will not permit any subsidiary of the
Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Corporation's capital stock or (ii) make any payment of principal of or
interest or premium, if any, on or repay or repurchase or redeem any
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debt securities of the Corporation (including other Junior Subordinated
Debentures) that rank pari passu in all respects with or junior in interest to
the Junior Subordinated Debentures (other than (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Corporation in connection
with any employment contract, benefit plan or other similar arrangement with
or for the benefit of one or more employees, officers, directors or
consultants, in connection with a dividend reinvestment or stockholder stock
purchase plan or in connection with the issuance of capital stock of the
Corporation (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to
the applicable Extension Period, (b) as a result of any exchange or conversion
of any class or series of the Corporation's capital stock (or any capital
stock of a subsidiary of the Corporation) for any class or series of the
Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c)
the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any stockholder's rights plan, or the issuance of
rights, stock or other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in
the form of stock, warrants, options or other rights where the dividend stock
or the stock issuable upon exercise of such warrants, options or other rights
is the same stock as that on which the dividend is being paid or ranks pari
passu with or junior to such stock), if at such time (i) there shall have
occurred any event of which the Corporation has actual knowledge that (a) with
the giving of notice or the lapse of time, or both, would constitute an "Event
of Default" under the Indenture with respect to the Junior Subordinated
Debentures of such series and (b) in respect of which the Corporation shall
not have taken reasonable steps to cure, (ii) if such Junior Subordinated
Debentures are held by an Issuer of a series of Related Preferred Securities,
the Corporation shall be in default with respect to its payment of any
obligations under the Guarantee relating to such Related Preferred Securities
or (iii) the Corporation shall have given notice of its selection of an
Extension Period as provided in the Indenture with respect to the Junior
Subordinated Debentures of such series and shall not have rescinded such
notice, or such Extension Period, or any extension thereof, shall be
continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without the
consent of the holders of any series of Junior Subordinated Debentures, amend,
waive or supplement the Indenture for specified purposes, including, among
other things, curing ambiguities, defects or inconsistencies (provided that
any such action does not materially adversely affect the interest of the
holders of any series of Junior Subordinated Debentures or, in the case of
Corresponding Junior Subordinated Debentures, the holders of the Related
Preferred Securities so long as they remain outstanding) and qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Corporation and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of each outstanding series of Junior Subordinated Debentures
affected, to modify the Indenture in a manner affecting adversely the rights
of the holders of such series of the Junior Subordinated Debentures in any
material respect; provided, that no such modification may, without the consent
of the holder of each outstanding Junior Subordinated Debenture so affected,
(i) change the Stated Maturity of any series of Junior Subordinated Debentures
(except as otherwise specified in the applicable Prospectus Supplement), or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon or (ii) reduce the percentage of principal amount
of Junior Subordinated Debentures of any series, the holders of which are
required to consent to any such modification of the Indenture, provided that,
in the case of Corresponding Junior Subordinated Debentures, so long as any of
the Related Preferred Securities remain outstanding, (a) no such modification
may be made that adversely affects the holders of such Preferred Securities in
any material respect, and no termination of the Indenture may occur, and no
waiver of any event of default or compliance with any covenant under the
Indenture may be effective, without the prior consent of the holders of at
least a majority of the aggregate Liquidation Amount of all outstanding
Related Preferred Securities affected unless and until the principal of the
Corresponding Junior Subordinated Debentures and all accrued and unpaid
interest thereon have been paid in full and certain other conditions have been
satisfied and (b) where a consent under the Indenture would require the
consent of each holder of Corresponding Junior Subordinated Debentures, no
such consent will be given by the Property Trustee without the prior consent
of each holder of Related Preferred Securities.
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In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of Junior Subordinated Debentures, any supplemental
Indenture for the purpose of creating any new series of Junior Subordinated
Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on such series of Junior
Subordinated Debentures, including any Additional Interest in respect
thereof, when due (subject to the deferral of any interest payment in the
case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on such series of
Junior Subordinated Debentures when due whether at maturity or upon
redemption; or
(iii) failure to observe or perform any other covenants contained in the
indenture for 90 days after written notice to the Corporation from the
Debenture Trustee or the holders of at least 25% in aggregate outstanding
principal amount of such affected series of outstanding Junior Subordinated
Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of
Junior Subordinated Debentures of each series affected have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee. The Debenture Trustee or the holders of
not less than 25% in aggregate outstanding principal amount of Junior
Subordinated Debentures of each series affected may declare the principal (or,
if the Preferred Securities of such series are Discount Securities, such
portion of the principal amount as may be specified in a Prospectus
Supplement) due and payable immediately upon a Debenture Event of Default,
and, in the case of Corresponding Junior Subordinated Debentures, should the
Debenture Trustee or such holders of such Corresponding Junior Subordinated
Debentures fail to make such declaration, the holders of at least 25% in
aggregate Liquidation Amount of the Related Preferred Securities shall have
such right. The holders of a majority in aggregate outstanding principal
amount of Junior Subordinated Debentures of each series affected may annul
such declaration. In the case of Corresponding Junior Subordinated Debentures,
should the holders of such Corresponding Junior Subordinated Debentures fail
to annul such declaration and waive such default, the holders of a majority in
aggregate Liquidation Amount of the Related Preferred Securities shall have
such right.
The holders of a majority in aggregate outstanding principal amount of each
series of Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures of such series, waive
any default, except a default in the payment of principal or interest
(including any Additional Interest) (unless such default has been cured and a
sum sufficient to pay all matured installments of interest (including any
Additional Interest) and principal due otherwise than by acceleration has been
deposited with the Debenture Trustee) or a default in respect of a covenant or
provision which under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Junior Subordinated Debenture of
such series. In the case of Corresponding Junior Subordinated Debentures,
should the holders of such Corresponding Junior Subordinated Debentures fail
to waive such default, the holders of a majority in aggregate Liquidation
Amount of the Related Preferred Securities shall have such right. The
Corporation is required to file annually with the Debenture Trustee a
certificate as to whether or not the Corporation is in compliance with all the
conditions and covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as to a
series of Corresponding Junior Subordinated Debentures, the Property Trustee
will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures, and any other amounts payable
under the Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Corresponding Junior Subordinated
Debentures.
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default with respect to a series of Corresponding
Junior Subordinated Debentures has occurred and is continuing and such event
is attributable to the failure of the Corporation to pay interest or principal
on such Corresponding Junior Subordinated Debentures on the date such interest
or principal is due and payable, a holder of Preferred Securities may
institute a legal proceeding directly against the Corporation for enforcement
of payment to such holder of the principal of or interest (including any
Additional Interest) on such Corresponding Junior Subordinated Debentures
having a principal amount equal to the aggregate Liquidation Amount of the
Related Preferred Securities of such holder (a "Direct Action"). The
Corporation may not amend the Indenture to remove the foregoing right to bring
a Direct Action without the prior written consent of the holders of all of the
Preferred Securities outstanding. If the right to bring a Direct Action is
removed, the applicable Issuer may become subject to the reporting obligations
under the Exchange Act. The Corporation shall have the right under the
Indenture to set-off any payment made to such holder of Preferred Securities
by the Corporation in connection with a Direct Action.
The holders of the Preferred Securities will not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Junior Subordinated Debentures unless there
shall have been an event of default under the Trust Agreement. See
"Description of Preferred Securities--Events of Default; Notice".
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease
its properties and assets substantially as an entirety to the Corporation,
unless (i) in case the Corporation consolidates with or merges into another
Person or conveys or transfers its properties and assets substantially as an
entirety to any Person, the successor Person is organized under the laws of
the United States or any state or the District of Columbia, and such successor
Person expressly assumes the Corporation's obligations on the Junior
Subordinated Debentures issued under the Indenture; (ii) immediately after
giving effect thereto, no Debenture Event of Default, and no event which,
after notice or lapse of time or both, would become a Debenture Event of
Default, shall have occurred and be continuing, and (iii) certain other
conditions as prescribed by the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holders of the
Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and
payable at their Stated Maturity within one year, and the Corporation deposits
or causes to be deposited with the Debenture Trustee funds, in trust, for the
purpose and in an amount in the currency or currencies in which the Junior
Subordinated Debentures are payable sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation, for the principal (and premium, if
any) and interest (including any Additional Interest) to the date of the
deposit or to the Stated Maturity, as the case may be, then the Indenture will
cease to be of further effect (except as to the Corporation's obligations to
pay all other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Corporation
will be deemed to have satisfied and discharged the Indenture.
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CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or
exchangeable into Junior Subordinated Debentures of another series or into
Preferred Securities of another series. The specific terms on which Junior
Subordinated Debentures of any series may be so converted or exchanged will be
set forth in the applicable Prospectus Supplement. Such terms may include
provisions for conversion or exchange, either mandatory, at the option of the
holder, or at the option of the Corporation, in which case the number of
shares of Preferred Securities or other securities to be received by the
holders of Junior Subordinated Debentures would be calculated as of a time and
in the manner stated in the applicable Prospectus Supplement.
SUBORDINATION
The Junior Subordinated Debentures will be subordinate in right of payment,
to the extent set forth in the Indenture, to all Senior Debt (as defined
below) of the Corporation. If the Corporation defaults in the payment of any
principal, premium, if any, or interest, if any, or any other amount payable
on any Senior Debt when the same becomes due and payable, whether at maturity
or at a date fixed for redemption or by declaration of acceleration or
otherwise, then, unless and until such default has been cured or waived or has
ceased to exist or all Senior Debt has been paid, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) may be made
or agreed to be made on the Junior Subordinated Debentures, or in respect of
any redemption, repayment, retirement, purchase or other acquisition of any of
the Junior Subordinated Debentures.
As used herein, "Senior Debt" means any obligation of the Corporation to its
creditors, whether now outstanding or subsequently incurred, other than any
obligation as to which, in the instrument creating or evidencing the
obligation or pursuant to which the obligation is outstanding, it is provided
that such obligation is not Senior Debt, but does not include trade accounts
payable and accrued liabilities arising in the ordinary course of business.
Senior Debt includes the Corporation's outstanding subordinated debt
securities and any subordinated debt securities issued in the future with
substantially similar subordination terms, but does not include the Junior
Subordinated Debentures of any Series or any junior subordinated debt
securities issued in the future with subordination terms substantially similar
to those of the Junior Subordinated Debentures. Substantially all of the
existing indebtedness of the Corporation constitutes Senior Debt.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Corporation, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Corporation, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Corporation for the benefit of creditors or (iv)
any other marshalling of the assets of the Corporation, all Senior Debt
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made on account of the
Junior Subordinated Debentures. In such event, any payment or distribution on
account of the Junior Subordinated Debentures, whether in cash, securities or
other property, that would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the Junior Subordinated Debentures will
be paid or delivered directly to the holders of Senior Debt in accordance with
the priorities then existing among such holders until all Senior Debt
(including any interest thereon accruing after the commencement of any such
proceedings) has been paid in full.
In the event of any such proceeding, after payment in full of all sums owing
with respect to Senior Debt, the holders of Junior Subordinated Debentures,
together with the holders of any obligations of the Corporation ranking on a
parity with the Junior Subordinated Debentures, will be entitled to be paid
from the remaining assets of the Corporation the amounts at the time due and
owing on the Junior Subordinated Debentures and such other obligations before
any payment or other distribution, whether in cash, property or otherwise,
will be made on account of any capital stock or obligations of the Corporation
ranking junior to the Junior Subordinated Debentures. If any payment or
distribution on account of the Junior Subordinated Debentures of any character
or
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any security, whether in cash, securities or other property is received by any
holder of any Junior Subordinated Debentures in contravention of any of the
terms hereof and before all the Senior Debt has been paid in full, such
payment or distribution or security will be received in trust for the benefit
of, and must be paid over or delivered and transferred to, the holders of the
Senior Debt at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior Debt
remaining unpaid to the extent necessary to pay all such Senior Debt in full.
By reason of such subordination, in the event of the insolvency of the
Corporation, holders of Senior Debt may receive more, ratably, and holders of
the Junior Subordinated Debentures may receive less, ratably, than the other
creditors of the Corporation. Such subordination will not prevent the
occurrence of any Event of Default under the Indenture.
The Junior Subordinated Indenture places no limitation on the amount of
additional Senior Debt that may be incurred by the Corporation. The
Corporation expects from time to time to incur additional indebtedness
constituting Senior Debt.
TRUST EXPENSES
Pursuant to the Expense Agreement for each series of Corresponding Junior
Subordinated Debentures, the Corporation, as holder of the Common Securities,
will irrevocably and unconditionally agree with each Issuer that holds Junior
Subordinated Debentures that the Corporation will pay to such Issuer, and
reimburse such Issuer for, the full amounts of any costs, expenses or
liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of any Preferred Securities or other similar interests in the Issuer
the amounts due such holders pursuant to the terms of the Preferred Securities
or such other similar interests, as the case may be. Such payment obligation
will include any such costs, expenses or liabilities of the Issuer that are
required by applicable law to be satisfied in connection with a termination of
such Issuer.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the Debenture Trustee is
under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Junior Subordinated Debentures,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The Debenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Debenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures may be issued in one or
more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of a series of Related Preferred Securities. In
that event, concurrently with the issuance of each Issuer's Preferred
Securities, such Issuer will invest the proceeds thereof and the consideration
paid by the Corporation for the Common Securities of such Issuer in such
series of Corresponding Junior Subordinated Debentures issued by the
Corporation to such Issuer. Each series of Corresponding Junior Subordinated
Debentures will be in the principal amount equal to the aggregate stated
Liquidation Amount of the Related Preferred Securities and the Common
Securities of such Issuer and will rank pari passu with all other series of
Junior Subordinated Debentures. Holders of the Related Preferred Securities
for a series of Corresponding Junior Subordinated Debentures will have the
rights in connection with modifications to the Indenture or upon occurrence of
Debenture Events of Default, as described under "--Modification of Indenture"
and "--Debenture Events of Default", unless provided otherwise in the
Prospectus Supplement for such Related Preferred Securities.
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Unless otherwise specified in the applicable Prospectus Supplement, if a Tax
Event in respect of an Issuer shall occur and be continuing, the Corporation
may, at its option and subject to prior approval of the Federal Reserve if
then so required under applicable capital guidelines or policies, redeem the
Corresponding Junior Subordinated Debentures at any time within 90 days of the
occurrence of such Tax Event, in whole but not in part, subject to the
provisions of the Indenture and whether or not such Corresponding Junior
Subordinated Debentures are then otherwise redeemable at the option of the
Corporation. The redemption price for any Corresponding Junior Subordinated
Debentures shall be equal to 100% of the principal amount of such
Corresponding Junior Subordinated Debentures then outstanding plus accrued and
unpaid interest to the date fixed for redemption. For so long as the
applicable Issuer is the holder of all the outstanding Corresponding Junior
Subordinated Debentures of such Issuer, the proceeds of any such redemption
will be used by the Issuer to redeem the corresponding Trust Securities in
accordance with their terms. The Corporation may not redeem a series of
Corresponding Junior Subordinated Debentures in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debentures of such series for all interest periods terminating on
or prior to the Redemption Date.
The Corporation will covenant in the Indenture, as to each series of
Corresponding Junior Subordinated Debentures, that if and so long as (i) the
Issuer of the related series of Trust Securities is the holder of all such
Corresponding Junior Subordinated Debentures, (ii) a Tax Event in respect of
such Issuer has occurred and is continuing and (iii) the Corporation has
elected, and has not revoked such election, to pay Additional Sums (as defined
under "Description of Preferred Securities--Redemption or Exchange") in
respect of such Trust Securities, the Corporation will pay to such Issuer such
Additional Sums. The Corporation will also covenant, as to each series of
Corresponding Junior Subordinated Debentures, (i) to maintain directly or
indirectly 100% ownership of the Common Securities of the Issuer to which such
Corresponding Junior Subordinated Debentures have been issued, provided that
certain successors which are permitted pursuant to the Indenture may succeed
to the Corporation's ownership of the Common Securities, (ii) not to
voluntarily terminate, wind-up or liquidate any Issuer, except (a) in
connection with a distribution of Corresponding Junior Subordinated Debentures
to the holders of the Preferred Securities in exchange therefor upon
liquidation of such Issuer or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the related Trust Agreement, in
either such case, if so specified in the applicable Prospectus Supplement upon
prior approval of the Federal Reserve, if then so required under applicable
Federal Reserve capital guidelines or policies, and (iii) to use its
reasonable efforts, consistent with the terms and provisions of the related
Trust Agreement, to cause such Issuer to be classified as a grantor trust and
not as an association taxable as a corporation for United States Federal
income tax purposes.
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DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for each Issuer, the Issuer
Trustees on behalf of such Issuer will issue the Preferred Securities and the
Common Securities. The Preferred Securities of a particular Issuer will
represent preferred beneficial interests in the Issuer and the holders thereof
will be entitled to a preference in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation over the Common
Securities of such Issuer, as well as other benefits as described in the
corresponding Trust Agreement. This summary of certain provisions of the
Preferred Securities and each Trust Agreement, which summarizes the material
terms thereof, does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of each Trust
Agreement, including the definitions therein of certain terms, and the Trust
Indenture Act, to which reference is hereby made. Wherever particular defined
terms of a Trust Agreement (as amended or supplemented from time to time) are
referred to herein or in a Prospectus Supplement, such defined terms are
incorporated herein or therein by reference. The form of the Trust Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. Each of the Issuers is a legally separate entity and
the assets of one are not available to satisfy the obligations of any of the
others.
GENERAL
The Preferred Securities of an Issuer will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of that Issuer
except as described under "--Subordination of Common Securities". Legal title
to the Corresponding Junior Subordinated Debentures will be held by the
Property Trustee in trust for the benefit of the holders of the related
Preferred Securities and Common Securities. Each Guarantee Agreement executed
by the Corporation for the benefit of the holders of an Issuer's Trust
Securities (the "Guarantee" for such Preferred Securities) will be a guarantee
on a subordinated basis with respect to the related Trust Securities but will
not guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Preferred Securities when the related Issuer does not have
funds on hand available to make such payments. See "Description of
Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such
dates as specified in the applicable Prospectus Supplement. In the event that
any date on which Distributions are payable on the Preferred Securities is not
a Business Day (as defined below), payment of the Distribution payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect to any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment of
such Distribution shall be made on the immediately preceding Business Day, in
either case with the same force and effect as if made on such date (each date
on which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in The City of
New York are authorized or required by law or executive order to remain closed
or a day on which the corporate trust office of the Property Trustee or the
Debenture Trustee is closed for business.
Each Issuer's Preferred Securities represent preferred beneficial interests
in the applicable Issuer, and the Distributions on each Preferred Security
will be payable at a rate specified in the applicable Prospectus Supplement
for such Preferred Securities. The amount of Distributions payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
unless otherwise specified in the applicable Prospectus Supplement.
Distributions to which holders of Preferred Securities are entitled will
accumulate additional Distributions at the rate per annum if and as specified
in the applicable Prospectus Supplement. The term "Distributions" as used
herein includes any such additional Distributions unless otherwise stated.
If provided in the applicable Prospectus Supplement, the Corporation has the
right under the Indenture, pursuant to which it will issue the Corresponding
Junior Subordinated Debentures, to defer the payment of interest at any time
or from time to time on any series of the Corresponding Junior Subordinated
Debentures for
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up to such number of consecutive interest payment periods which will be
specified in such Prospectus Supplement relating to such series (each, an
"Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the Corresponding Junior Subordinated Debentures. As a
consequence of any such deferral, Distributions on the Related Preferred
Securities would be deferred (but would continue to accumulate additional
Distributions thereon at the rate per annum set forth in the Prospectus
Supplement for such Preferred Securities) by the Issuer of such Preferred
Securities during any such Extension Period. During any such Extension Period,
the Corporation may not (i) declare or pay any dividends or distributions on,
or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Corporation's capital stock or (ii) make any payment of principal
of or interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation that rank pari passu in all respects with or
junior in interest to the Corresponding Junior Subordinated Debentures (other
than (a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Corporation in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of one or more
employees, officers, directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of capital stock of the Corporation (or securities convertible into
or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange or conversion of any class or series of the
Corporation's capital stock (or any capital stock of a subsidiary of the
Corporation) for any class or series of the Corporation's capital stock or of
any class or series of the Corporation's indebtedness for any class or series
of the Corporation's capital stock, (c) the purchase of fractional interests
in shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise
of such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such stock).
The revenue of each Issuer available for distribution to holders of its
Preferred Securities will be limited to payments under the Corresponding
Junior Subordinated Debentures in which the Issuer will invest the proceeds
from the issuance and sale of its Trust Securities. See "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures." If the
Corporation does not make interest payments on such Corresponding Junior
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the Related Preferred Securities. The payment of
Distributions (if and to the extent the Issuer has funds legally available for
the payment of such Distributions and cash sufficient to make such payments)
is guaranteed by the Corporation on a limited basis as set forth herein under
"Description of Guarantees".
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Issuer on the relevant record
dates, which, as long as the Preferred Securities remain in book-entry form,
will be one Business Day prior to the relevant Distribution Date. Subject to
any applicable laws and regulations and the provisions of the applicable Trust
Agreement, each such payment will be made as described under "Book-Entry
Issuance." In the event any Preferred Securities are not in book-entry form,
the relevant record date for such Preferred Securities shall be the date at
least 15 days prior to the relevant Distribution Date, as specified in the
applicable Prospectus Supplement.
REDEMPTION OR EXCHANGE
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in part,
of any Corresponding Junior Subordinated Debentures, whether at maturity or
upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days notice, at a redemption price (the "Redemption Price")
equal to the aggregate Liquidation Amount of such Trust Securities plus
accumulated but unpaid Distributions thereon to the date of redemption (the
"Redemption Date") and the related amount of the premium, if any, paid by the
Corporation upon the concurrent redemption of such
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Corresponding Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures--Redemption". If less than all of any series of
Corresponding Junior Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption shall be
allocated to the redemption pro rata of the Related Preferred Securities and
the Common Securities. The amount of premium, if any, paid by the Corporation
upon the redemption of all or any part of any series of any Corresponding
Junior Subordinated Debentures to be repaid or redeemed on a Redemption Date
shall be allocated to the redemption pro rata of the Related Preferred
Securities and the Common Securities.
The Corporation will have the right to redeem any series of Corresponding
Junior Subordinated Debentures (i) on or after such date as may be specified
in the applicable Prospectus Supplement, in whole at any time or in part from
time to time, (ii) at any time, in whole (but not in part), upon the
occurrence of a Tax Event or Capital Treatment Event or (iii) as may be
otherwise specified in the applicable Prospectus Supplement, in each case
subject to receipt of prior approval by the Federal Reserve if then so
required under applicable Federal Reserve capital guidelines or policies.
Distribution of Corresponding Junior Subordinated Debentures. Subject to the
Corporation having received prior approval of the Federal Reserve to do so if
such approval is then required under applicable capital guidelines or policies
of the Federal Reserve, the Corporation has the right at any time to terminate
any Issuer and, after satisfaction of the liabilities of creditors of such
Issuer as provided by applicable law, cause such Corresponding Junior
Subordinated Debentures in respect of the Preferred Securities and Common
Securities issued by such Issuer to be distributed to the holders of such
Preferred Securities and Common Securities in liquidation of the Issuer.
Tax Event or Capital Treatment Event Redemption. If a Tax Event or Capital
Treatment Event in respect of a series of Preferred Securities and Common
Securities shall occur and be continuing, the Corporation has the right to
redeem the Corresponding Junior Subordinated Debentures in whole (but not in
part) and thereby cause a mandatory redemption of such Preferred Securities
and Common Securities in whole (but not in part) at the Redemption Price
within 90 days following the occurrence of such Tax Event or Capital Treatment
Event. In the event a Tax Event or Capital Treatment Event in respect of a
series of Preferred Securities and Common Securities has occurred and is
continuing and the Corporation does not elect to redeem the Corresponding
Junior Subordinated Debentures and thereby cause a mandatory redemption of
such Preferred Securities or to liquidate the related Issuer and cause the
Corresponding Junior Subordinated Debentures to be distributed to holders of
such Preferred Securities and Common Securities in exchange therefor upon
liquidation of the Issuer as described above, such Preferred Securities will
remain outstanding and Additional Sums (as defined below) may be payable on
the Corresponding Junior Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by an Issuer on the
outstanding Preferred Securities and Common Securities of the Issuer shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which such Issuer has become subject as a result of a Tax Event.
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such
laws, rules or regulations, which amendment or change is effective or such
pronouncement, action or decision is announced on or after the date of
issuance of the Preferred Securities of an Issuer, there is more than an
insubstantial risk that the Corporation will not be entitled to treat an
amount equal to the aggregate Liquidation Amount of such Preferred Securities
as "Tier 1 Capital" (or the then equivalent thereof) for purposes of the
capital adequacy guidelines of the Federal Reserve, as then in effect and
applicable to the Corporation.
"Like Amount" means (i) with respect to a redemption of any series of Trust
Securities, Trust Securities of such series having a Liquidation Amount (as
defined below) equal to the principal amount of Corresponding
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Junior Subordinated Debentures to be contemporaneously redeemed in accordance
with the Indenture, the proceeds of which will be used to pay the Redemption
Price of such Trust Securities, and (ii) with respect to a distribution of
Corresponding Junior Subordinated Debentures to holders of any series of Trust
Securities in connection with a dissolution or liquidation of the related
Issuer, Corresponding Junior Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Trust Securities in respect of which
such distribution is made.
"Liquidation Amount" means the stated amount per Trust Security of $25 (or
such other stated amount as is set forth in the applicable Prospectus
Supplement).
"Tax Event" with respect to an Issuer means the receipt by the Issuer of a
series of Preferred Securities of an opinion of counsel experienced in such
matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of such Preferred
Securities under the Trust Agreement, there is more than an insubstantial risk
that (i) such Issuer is, or will be within 90 days of the date of such
opinion, subject to United States Federal income tax with respect to income
received or accrued on the corresponding series of Corresponding Junior
Subordinated Debentures, (ii) interest payable by the Corporation on such
series of Corresponding Junior Subordinated Debentures is not, or within 90
days of the date of such opinion, will not be, deductible by the Corporation,
in whole or in part, for United States Federal income tax purposes, or (iii)
such Issuer is, or will be within 90 days of the date of such opinion, subject
to more than a de minimis amount of other taxes, duties or other governmental
charges.
Possible Tax Law Changes. On August 5, 1997, the Taxpayer Relief Act of 1997
(the "Act") was signed by President Clinton. The Act did not adopt several tax
law changes that the President had originally proposed that, if such changes
had been enacted, would have denied the Corporation the ability to deduct
interest on the Series D Subordinated Debentures. There can be no assurance
that future legislative proposals or final legislation will not affect the
ability of the Corporation to deduct interest on the Preferred Securities.
Such a change could give rise to a Tax Event, which may permit the Corporation
to cause a redemption of the Preferred Securities, as described more fully
herein.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Preferred Securities (i) such
series of Preferred Securities will no longer be deemed to be outstanding,
(ii) the depositary or its nominee, as the record holder of such series of
Preferred Securities, will receive a registered global certificate or
certificates representing the Corresponding Junior Subordinated Debentures to
be delivered upon such distribution and (iii) any certificates representing
such series of Preferred Securities not held by DTC or its nominee will be
deemed to represent the Corresponding Junior Subordinated Debentures having a
principal amount equal to the stated Liquidation Amount of such series of
Preferred Securities, and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid Distributions on such series of Preferred
Securities until such certificates are presented to the Administrative
Trustees or their agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of an Issuer were to occur. Accordingly, the Preferred Securities
that an investor may purchase, or the Corresponding Junior Subordinated
Debentures that the investor may receive on dissolution and liquidation of an
Issuer, may trade at a discount to the price that the investor paid to
purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated
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Debentures. Redemptions of the Preferred Securities shall be made and the
Redemption Price shall be payable on each Redemption Date only to the extent
that the related Issuer has funds on hand available for the payment of such
Redemption Price. See also "--Subordination of Common Securities".
If the Property Trustee gives a notice of redemption in respect of its
Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, to the extent funds are available, the Property Trustee will
deposit irrevocably with DTC funds sufficient to pay the applicable Redemption
Price and will give DTC irrevocable instructions and authority to pay the
Redemption Price to the holders of such Preferred Securities. See "Book-Entry
Issuance". If such Preferred Securities are no longer in book-entry form, the
Property Trustee, to the extent funds are available, will irrevocably deposit
with the paying agent for such Preferred Securities funds sufficient to pay
the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing such Preferred Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Preferred Securities called for redemption shall be
payable to the holders of such Preferred Securities on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of such Preferred Securities so called for
redemption will cease, except the right of the holders of such Preferred
Securities to receive the Redemption Price and any Distribution payable in
respect of the Preferred Securities on or prior to the Redemption Date, but
without interest on such Redemption Price, and such Preferred Securities will
cease to be outstanding. In the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day, in each
case, with the same force and effect as if made on such date. In the event
that payment of the Redemption Price in respect of Preferred Securities called
for redemption is improperly withheld or refused and not paid either by the
Issuer or by the Corporation pursuant to the Guarantee as described under
"Description of Guarantees", Distributions on such Preferred Securities will
continue to accrue at the then applicable rate from the Redemption Date
originally established by the Issuer for such Preferred Securities to the date
such Redemption Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the
Redemption Price.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant
record date, which shall be one Business Day prior to the relevant Redemption
Date or liquidation date, as applicable; provided, however, that in the event
that any Preferred Securities are not in book-entry form, the relevant record
date for such Preferred Securities shall be a date at least 15 days prior to
the Redemption Date or liquidation date, as applicable, as specified in the
applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities issued by
an Issuer are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the
Common Securities based upon the relative Liquidation Amounts of such classes.
The particular Preferred Securities to be redeemed shall
be selected on a pro rata basis not more than 60 days prior to the Redemption
Date by the Property Trustee from the outstanding Preferred Securities not
previously called for redemption, by such method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $25 or an integral multiple of $25 in excess
thereof, unless a different amount is specified in the
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applicable Prospectus Supplement) of the Liquidation Amount of Preferred
Securities of a denomination larger than $25 (or such other denomination as is
specified in the applicable Prospectus Supplement). The Property Trustee shall
promptly notify the Securities registrar in writing of the Preferred
Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to
be redeemed. For all purposes of each Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities redeemed or
to be redeemed only in part, to the portion of the aggregate Liquidation
Amount of Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address. Unless the Corporation defaults in payment
of the Redemption Price on the Corresponding Junior Subordinated Debentures,
on and after the Redemption Date interest will cease to accrue on such Junior
Subordinated Debentures or portions thereof (and Distributions will cease to
accrue on the Related Preferred Securities or portions thereof) called for
redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Issuer's
Preferred Securities and Common Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of such Preferred Securities and Common
Securities; provided, however, that if on any Distribution Date, Redemption
Date or Liquidation Date a Debenture Event of Default shall have occurred and
be continuing, no payment of any Distribution on, or Redemption Price of, or
Liquidation Distribution in respect of, any of the Issuer's Common Securities,
and no other payment on account of the redemption, liquidation or other
acquisition of such Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions on all of the Issuer's
outstanding Preferred Securities for all Distribution periods terminating on
or prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all of the Issuer's outstanding Preferred
Securities then called for redemption, or in the case of payment of the
Liquidation Distribution the full amount of such Liquidation Distribution on
all Outstanding Preferred Securities, shall have been made or provided for,
and all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, or Redemption Price of, the
Issuer's Preferred Securities then due and payable.
In the case of any event of default under the applicable Trust Agreement
resulting from a Debenture Event of Default, the Corporation as holder of such
Issuer's Common Securities will be deemed to have waived any right to act with
respect to any such Event of Default under the applicable Trust Agreement
until the effect of all such Events of Default with respect to such Preferred
Securities have been cured, waived or otherwise eliminated. Until any such
Events of Default under the applicable Trust Agreement with respect to the
Preferred Securities have been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the holders of such Preferred
Securities and not on behalf of the Corporation as holder of the Issuer's
Common Securities, and only the holders of such Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer shall automatically terminate
upon expiration of its term and shall terminate on the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the holder of the
Common Securities; (ii) the distribution of a Like Amount of the Corresponding
Junior Subordinated Debentures to the holders of its Trust Securities, if the
Corporation, as Depositor, has given written direction to the Property Trustee
to terminate such Issuer (subject to the Corporation having received prior
approval of the Federal Reserve if then so required under applicable capital
guidelines or policies); (iii) redemption of all of the Issuer's Preferred
Securities as described under "Description of Preferred Securities--Redemption
or Exchange--Mandatory Redemption"; and (iv) the entry of an order for the
dissolution of the Issuer by a court of competent jurisdiction.
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If an early termination occurs as described in clause (i), (ii) or (iv)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of such Issuer as provided by
applicable law, to the holders of such Trust Securities in exchange therefor a
Like Amount of the Corresponding Junior Subordinated Debentures, unless such
distribution is determined by the Property Trustee not to be practical, in
which event such holders will be entitled to receive out of the assets of the
Issuer available for distribution to holders, after satisfaction of
liabilities to creditors of such Issuer as provided by applicable law, an
amount equal to, in the case of holders of Preferred Securities, the aggregate
of the Liquidation Amount plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because such Issuer has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by such Issuer on its
Preferred Securities shall be paid on a pro rata basis. The holder(s) of such
Issuer's Common Securities will be entitled to receive distributions upon any
such liquidation pro rata with the holders of its Preferred Securities, except
that if a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under each
Trust Agreement with respect to the Preferred Securities issued thereunder
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Junior Subordinated Debentures--Debenture Events of
Default"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 25% in aggregate Liquidation
Amount of the outstanding Preferred Securities of the applicable Issuer, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" under such
Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Corporation to
appoint a successor Property Trustee within 90 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer's Preferred
Securities, the Administrative Trustees and the Corporation, as Depositor,
unless such Event of Default shall have been cured or waived. The Corporation,
as Depositor, and the Administrative Trustees are required to file annually
with the Property Trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to them under each
Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities as
described above. See "--Liquidation Distribution Upon Termination." The
existence of an Event of Default does not entitle the holders of Preferred
Securities to accelerate the maturity thereof.
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REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by
the holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or from time to time, for the purpose of meeting the legal requirements
of the Trust Indenture Act or of any jurisdiction in which any part of the
Trust Property may at the time be located, the Corporation, as the holder of
the Common Securities, and the Administrative Trustees shall have power to
appoint one or more persons either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to act as
separate trustee of any such property, in either case with such powers as may
be provided in the instrument of appointment, and to vest in such person or
persons in such capacity any property, title, right or power deemed necessary
or desirable, subject to the provisions of the applicable Trust Agreement. In
case a Debenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust
Agreement, provided such Person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUERS
An Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. An Issuer may, at the request of the Corporation, with the
consent of the Administrative Trustees and without the consent of the holders
of the Preferred Securities, merge with or into, consolidate, amalgamate, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of
any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of such Issuer with respect to the Preferred
Securities or (b) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as
the Preferred Securities in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Corporation
expressly appoints a trustee of such successor entity possessing the same
powers and duties as the Property Trustee as the holder of the Corresponding
Junior Subordinated Debentures, (iii) the Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities to be downgraded by any nationally recognized statistical
rating organization which assigns ratings to the Preferred Securities, (v)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the material rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
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Securities) in any material respect, (vi) such successor entity has a purpose
identical to that of the Issuer, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Corporation has
received an opinion from independent counsel to the Issuer experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
material rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect, and
(b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Issuer nor such successor entity
will be required to register as an investment company under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and (viii) the
Corporation or any permitted successor or assignee owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, an Issuer shall not,
except with the consent of holders of 100% in Liquidation Amount of the
Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Issuer or the successor entity to be classified as an
association taxable as a corporation or as other than a grantor trust for
United States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees--Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of
the holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent
with any other provision, or to make any other provisions with respect to
matters or questions arising under such Trust Agreement, which shall not be
inconsistent with the other provisions of such Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of such Trust Agreement to such
extent as shall be necessary to ensure that the Issuer will be classified for
United States Federal income tax purposes as a grantor trust or as other than
an association taxable as a corporation at all times that any Trust Securities
are outstanding or to ensure that the Issuer will not be required to register
as an "investment company" under the Investment Company Act; provided,
however, that in the case of either clause (i) or clause (ii), such action
shall not adversely affect in any material respect the interests of any holder
of Preferred Securities, and any amendments of such Trust Agreement shall
become effective when notice thereof is given to the holders of Trust
Securities. Each Trust Agreement may be amended by the Issuer Trustees and the
Corporation with (i) the consent of holders representing not less than a
majority (based upon Liquidation Amounts) of the outstanding Trust Securities,
and (ii) receipt by the Issuer Trustees of an opinion of counsel to the effect
that such amendment or the exercise of any power granted to the Issuer
Trustees in accordance with such amendment will not cause the Issuer to be
taxable as a corporation or affect the Issuer's status as a grantor trust for
United States Federal income tax purposes or the Issuer's exemption from
status as an "investment company" under the Investment Company Act, provided
that without the consent of each holder of Trust Securities, such Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount
of any Distribution required to be made in respect of the Trust Securities as
of a specified date or (ii) restrict the right of a holder of Trust Securities
to institute suit for the enforcement of any such payment on or after such
date.
So long as any Corresponding Junior Subordinated Debentures are held by the
Property Trustee, the Issuer Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or executing any trust or power conferred on the Property
Trustee with respect to such
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Corresponding Junior Subordinated Debentures, (ii) waive any past default that
is waivable under the Indenture, (iii) exercise any right to rescind or annul
a declaration that the principal of all the Junior Subordinated Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or such Corresponding Junior Subordinated
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Corresponding Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior consent
of each holder of the corresponding Preferred Securities. The Issuer Trustees
shall not revoke any action previously authorized or approved by a vote of the
holders of the Preferred Securities except by subsequent vote of the holders
of the Preferred Securities. The Property Trustee shall notify each holder of
Preferred Securities of any notice of default with respect to the
Corresponding Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Issuer Trustees shall obtain an
opinion of counsel experienced in such matters to the effect that the Issuer
will not be classified as an association taxable as a corporation for United
States Federal income tax purposes on account of such action and such action
would not cause the Issuer to be classified as other than a grantor trust for
United States Federal income tax purposes.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be given to each holder of record of Preferred Securities in the
manner set forth in each Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Issuer to redeem and cancel its Preferred Securities in accordance with
the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities of a series may be issued in whole or in part in
the form of one or more Global Preferred Securities that will be deposited
with, or on behalf of, the Depositary identified in the Prospectus Supplement
relating to such series. Unless otherwise indicated in the applicable
Prospectus Supplement for such series, the Depositary will be DTC. Global
Preferred Securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Preferred Securities represented thereby, a Global
Preferred Security may not be transferred except as a whole by the Depositary
for such Global Preferred Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee to a successor Depositary or
any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Preferred Securities will be described in the Prospectus Supplement relating
to such series. The Corporation anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-
entry registration and transfer system, the respective aggregate Liquidation
Amounts of the individual
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Preferred Securities represented by such Global Preferred Securities to the
accounts of Participants. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Preferred Securities or by the
Corporation if such Preferred Securities are offered and sold directly by the
Corporation. Ownership of beneficial interests in a Global Preferred Security
will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in such Global Preferred
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the records of Participants
(with respect to interests of persons who hold through Participants). The laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Preferred
Security.
So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Preferred Securities represented by such Global Preferred Security for
all purposes under the Indenture governing such Preferred Securities. Except
as provided below, owners of beneficial interests in a Global Preferred
Security will not be entitled to have any of the individual Preferred
Securities of the series represented by such Global Preferred Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Preferred Securities of such series in definitive form
and will not be considered the owners or holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Preferred Securities represented by a Global Preferred Security registered in
the name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Preferred
Security representing such Preferred Securities. None of the Corporation, the
Property Trustee, any Paying Agent, or the Securities Registrar for such
Preferred Securities will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Preferred
Securities or its nominee, upon receipt of any payment of Liquidation Amount,
premium or Distributions, including any payment of Redemption Price, in
respect of a permanent Global Preferred Security representing any of such
Preferred Securities immediately will credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interest in
the aggregate Liquidation Amount of such Global Preferred Security for such
Preferred Securities as shown on the records of such Depositary or its
nominee. The Corporation also expects that payments by Participants to owners
of beneficial interests in such Global Preferred Security held through such
Participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Preferred Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by the Issuer within 90 days, or if there shall have occurred
and be continuing an event of default under the Indenture with respect to the
Subordinated Debentures of such series, the Issuer will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security representing such series of Preferred Securities. In addition, the
Issuer may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Preferred Securities,
determine not to have any Preferred Securities of such series represented by
one or more Global Preferred Securities and, in such event, will issue
individual Preferred Securities of such series in exchange for the Global
Preferred Security or Securities representing such series of Preferred
Securities. Further, if the Issuer so specifies with respect to the Preferred
Securities of a series, an owner of a beneficial interest in a Global
Preferred Security representing Preferred
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Securities of such series may, on terms acceptable to the Issuer, the Property
Trustee and the Depositary for such Global Preferred Security, receive
individual Preferred Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Preferred Securities. In any such instance, an owner of a
beneficial interest in a Global Preferred Security will be entitled to
physical delivery of individual Preferred Securities of the series represented
by such Global Preferred Security equal in principal amount to such beneficial
interest and to have such Preferred Securities registered in its name.
Individual Preferred Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Issuer, and integral
multiples thereof that are the same as the denominations and multiples in
which the Preferred Securities are issued.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Issuer's Preferred Securities are not
held by the Depositary, such payments shall be made by check mailed to the
address of the holder entitled thereto as such address shall appear on the
Register. Unless otherwise specified in the applicable Prospectus Supplement,
the paying agent (the "Paying Agent") shall initially be the Property Trustee
and any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Corporation. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall appoint
a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Corporation) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Issuer, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Issuers will not be required to register or cause to be
registered the transfer of their Preferred Securities after such Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are specifically
set forth in each Trust Agreement and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision,
the Property Trustee is under no obligation to exercise any of the powers
vested in it by the applicable Trust Agreement at the request of any holder of
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any
provision of the applicable Trust Agreement, and the matter is not one on
which holders of Preferred Securities are entitled under such Trust Agreement
to vote, then the Property Trustee shall take such action as is directed by
the Corporation and if not so directed, shall take such action as it deems
advisable and in the best interests of the holders of the Trust Securities and
will have no liability except for its own bad faith, negligence or willful
misconduct.
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MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuers in such a way that no Issuer will be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a
corporation or as other than a grantor trust for United States Federal income
tax purposes and so that the Corresponding Junior Subordinated Debentures will
be treated as indebtedness of the Corporation for United States Federal income
tax purposes. In this connection, the Corporation and the Administrative
Trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust of each Issuer or each Trust Agreement, that the
Corporation and the Administrative Trustees determine in their discretion to
be necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the related
Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Issuer may borrow money or issue debt or mortgage or pledge any of its
assets.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Preferred Securities
and the Junior Subordinated Debentures, unless otherwise referred to in the
Prospectus Supplement relating to an offering of Preferred Securities or
Junior Subordinated Debentures. The Preferred Securities and the Junior
Subordinated Debentures will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more fully-
registered global certificates will be issued for the Preferred Securities of
each Issuer and the Junior Subordinated Debentures, representing in the
aggregate the total number of such Issuer's Preferred Securities or aggregate
principal balance of Junior Subordinated Debentures, respectively, and will be
deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. "Direct Participants" include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain custodial
relationships with Direct Participants, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants
are on file with the Commission.
Purchases of Preferred Securities or Junior Subordinated Debentures within
the DTC system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated
Debentures on DTC's records. The ownership interest of each actual purchaser
of each Preferred Security and each Junior Subordinated Debenture ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation from DTC of
their purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Preferred Securities or Junior
Subordinated Debentures. Transfers of ownership interests in the Preferred
Securities or Junior Subordinated Debentures are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Preferred Securities or Junior Subordinated Debentures, except in
the event that use of the book-entry system for the Preferred Securities of
such Issuer or Junior Subordinated Debentures is discontinued.
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DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities or Junior Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Preferred
Securities or Junior Subordinated Debentures are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners
will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Preferred Securities or Junior Subordinated Debentures. If less than all
of an Issuer's Preferred Securities or the Junior Subordinated Debentures are
being redeemed, DTC's current practice is to determine by lot the amount of
the interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Junior Subordinated Debentures, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities or Junior Subordinated Debentures. Under its
usual procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the
relevant Trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts such Preferred Securities or Junior Subordinated Debentures
are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Distribution payments on the Preferred Securities or the Junior Subordinated
Debentures will be made by the relevant Trustee to DTC. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participant and not of DTC, the relevant Trustee, the Issuer thereof or the
Corporation, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of Distributions to DTC is the
responsibility of the relevant Trustee, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursements of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the Preferred Securities or the Junior Subordinated
Debentures at any time by giving reasonable notice to the relevant Trustee and
the Corporation. In the event that a successor securities depositary is not
obtained, definitive Preferred Security or Junior Subordinated Debenture
certificates representing such Preferred Securities or Junior Subordinated
Debentures are required to be printed and delivered. The Corporation, at its
option, may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). After a Debenture Event of Default,
the holders of a majority in liquidation preference of Preferred Securities or
aggregate principal amount of Junior Subordinated Debentures may determine to
discontinue the system of book-entry transfers through DTC. In any such event,
definitive certificates for such Preferred Securities or Junior Subordinated
Debentures will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuers and the Corporation believe to
be accurate, but the Issuers and the Corporation assume no responsibility for
the accuracy thereof. Neither the Issuers nor the Corporation has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
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DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Corporation concurrently
with the issuance by each Issuer of its Preferred Securities for the benefit
of the holders from time to time of such Preferred Securities. The First
National Bank of Chicago will act as indenture trustee ("Guarantee Trustee")
under each Guarantee for the purposes of compliance with the Trust Indenture
Act and each Guarantee will be qualified as an indenture under the Trust
Indenture Act. This summary of certain provisions of the Guarantees, which
summarizes the material terms thereof, does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the
provisions of each Guarantee, including the definitions therein of certain
terms, and the Trust Indenture Act, to each of which reference is hereby made.
The form of the Guarantee has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Reference in this summary to
Preferred Securities means that Issuer's Preferred Securities to which a
Guarantee relates. The Guarantee Trustee will hold each Guarantee for the
benefit of the holders of the related Issuer's Preferred Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
below) to the holders of the Preferred Securities, as and when due, regardless
of any defense, right of set-off or counterclaim that such Issuer may have or
assert other than the defense of payment. The following payments with respect
to the Preferred Securities, to the extent not paid by or on behalf of the
related Issuer (the "Guarantee Payments"), will be subject to the Guarantee:
(i) any accumulated and unpaid Distributions required to be paid on such
Preferred Securities, to the extent that such Issuer has funds on hand
available therefor at such time, (ii) the Redemption Price with respect to any
Preferred Securities called for redemption, to the extent that such Issuer has
funds on hand available therefor at such time, or (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of such Issuer (unless the
Corresponding Junior Subordinated Debentures are distributed to holders of
such Preferred Securities in exchange therefor), the lesser of (a) the
Liquidation Distribution and (b) the amount of assets of such Issuer remaining
available for distribution to holders of Preferred Securities after
satisfaction of liabilities to creditors of such Issuer as required by
applicable law. The Corporation's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Corporation to
the holders of the applicable Preferred Securities or by causing the Issuer to
pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer's obligations under the Preferred Securities, but will
apply only to the extent that such related Issuer has funds sufficient to make
such payments, and is not a guarantee of collection.
If the Corporation does not make interest payments on the Corresponding
Junior Subordinated Debentures held by the Issuer, the Issuer will not be able
to pay Distributions on the Preferred Securities and will not have funds
legally available therefor. Each Guarantee will rank subordinate and junior in
right of payment to all Senior Debt of the Corporation. See "--Status of the
Guarantees". Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary
upon such subsidiary's liquidation or reorganization or otherwise, is subject
to the prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the Guarantees will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and claimants should look only to the assets of
the Corporation for payments thereunder. See "The Corporation." Except as
otherwise provided in the applicable Prospectus Supplement, the Guarantees do
not limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture, any other
existing indenture or any other indenture that the Corporation may enter into
in the future or otherwise. See the applicable Prospectus Supplement relating
to any offering of Preferred Securities.
The Corporation has, through the applicable Guarantee, the applicable Trust
Agreement, the applicable series of Corresponding Junior Subordinated
Debentures, the Indenture and the applicable Expense Agreement,
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taken together, fully, irrevocably and unconditionally guaranteed all of the
Issuer's obligations under the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Preferred
Securities. See "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior Debt of
the Corporation in the same manner as Junior Subordinated Debentures.
Each Guarantee will rank pari passu with all other Guarantees issued by the
Corporation. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). Each Guarantee will be held for the benefit of the holders of the
related Preferred Securities. Each Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Issuer
or upon distribution to the holders of the Preferred Securities of the
Corresponding Junior Subordinated Debentures. None of the Guarantees places a
limitation on the amount of additional Senior Debt that may be incurred by the
Corporation. The Corporation expects from time to time to incur additional
indebtedness constituting Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the material rights of holders of the related Preferred Securities (in which
case no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate
Liquidation Amount of such outstanding Preferred Securities. The manner of
obtaining any such approval will be as set forth under "Description of
Preferred Securities--Voting Rights; Amendment of Each Trust Agreement." All
guarantees and agreements contained in each Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the
Corporation and shall inure to the benefit of the holders of the related
Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of the
Corporation to perform any of its payment obligations thereunder or to perform
any non-payment obligations if such non-payment default remains unremedied for
30 days. The holders of not less than a majority in aggregate Liquidation
Amount of the related Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of such Guarantee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under such Guarantee
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Corporation in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after default with respect to any Guarantee, must exercise the same degree of
care and skill as a
38
<PAGE>
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Guarantee Trustee is under no obligation to
exercise any of the powers vested in it by any Guarantee at the request of any
holder of any Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer or
upon distribution of Corresponding Junior Subordinated Debentures to the
holders of the related Preferred Securities in exchange therefor. Each
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the related Preferred Securities must restore
payment of any sums paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the Expense Agreement entered into by the Corporation under each
Trust Agreement (the "Expense Agreement"), the Corporation will, as holder of
the Common Securities, irrevocably and unconditionally guarantee to each
Person or entity to whom the Issuer becomes indebted or liable, the full
payment of any costs, expenses or liabilities of the Issuer, other than
obligations of the Issuer to pay to the holders of any Preferred Securities or
other similar interests in the Issuer of the amounts due such holders pursuant
to the terms of the Preferred Securities or such other similar interests, as
the case may be. The Expense Agreement will be enforceable by third parties.
39
<PAGE>
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING JUNIOR
SUBORDINATED DEBENTURES, THE EXPENSE AGREEMENT AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of Guarantees." Taken together, the
Corporation's obligations under each series of Corresponding Junior
Subordinated Debentures, the Indenture, the related Trust Agreement, the
related Expense Agreement, and the related Guarantee provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Related Preferred Securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's obligations under the
Related Preferred Securities. If and to the extent that the Corporation does
not make payments on any series of Corresponding Junior Subordinated
Debentures, such Issuer will not pay Distributions or other amounts due on its
Related Preferred Securities. The Guarantees do not cover payment of
Distributions when the related Issuer does not have sufficient funds to pay
such Distributions. In such event, the remedy of a holder of a series of
Preferred Securities is to institute a legal proceeding directly against the
Corporation pursuant to the terms of the Indenture for enforcement of payment
of amounts of such Distributions to such holder. The obligations of the
Corporation under each Guarantee are subordinate and junior in right of
payment to all Senior Debt of the Corporation.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on each
series of Corresponding Junior Subordinated Debentures, such payments will be
sufficient to cover Distributions and other payments due on the Related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to
the sum of the aggregate stated Liquidation Amount of the Related Preferred
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on each series of Corresponding Junior Subordinated
Debentures will match the Distribution rate and Distribution and other payment
dates for the Related Preferred Securities; (iii) the Corporation shall pay
for all and any costs, expenses and liabilities of such Issuer except the
Issuer's obligations to holders of its Preferred Securities under such
Preferred Securities; and (iv) each Trust Agreement provides that the Issuer
will not engage in any activity that is not consistent with the limited
purposes of such Issuer.
Notwithstanding anything to the contrary in the Indenture, the Corporation
has the right to set-off any payment it is otherwise required to make
thereunder with and to the extent the Corporation has theretofore made, or is
concurrently on the date of such payment making, a payment under the related
Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any related Preferred Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the related
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the related Issuer or any other person or entity.
A default or event of default under any Senior Debt of the Corporation would
not constitute a default or Event of Default under the Indenture. However, in
the event of payment defaults under, or acceleration of, Senior Debt of the
Corporation, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Corresponding Junior Subordinated
Debentures until such Senior Debt has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on any
series of Corresponding Junior Subordinated Debentures would constitute an
Event of Default under the Indenture.
40
<PAGE>
LIMITED PURPOSE OF ISSUERS
Each Issuer's Preferred Securities evidence a beneficial interest in such
Issuer, and each Issuer exists for the sole purpose of issuing its Preferred
Securities and Common Securities and investing the proceeds thereof in
Corresponding Junior Subordinated Debentures and engaging in only those other
activities necessary or incidental thereto. A principal difference between the
rights of a holder of a Preferred Security and a holder of a Corresponding
Junior Subordinated Debenture is that a holder of a Corresponding Junior
Subordinated Debenture is entitled to receive from the Corporation the
principal amount of and interest accrued on Corresponding Junior Subordinated
Debentures held, while a holder of Preferred Securities is entitled to receive
Distributions from such Issuer (or from the Corporation under the applicable
Guarantee) if and to the extent such Issuer has funds available for the
payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
any Issuer involving the liquidation of the Corresponding Junior Subordinated
Debentures, the holders of the related Preferred Securities will be entitled
to receive, out of the assets held by such Issuer, the Liquidation
Distribution in cash. See "Description of Preferred Securities--Liquidation
Distribution Upon Termination." Upon any voluntary or involuntary liquidation
or bankruptcy of the Corporation, the Property Trustee, as holder of the
Corresponding Junior Subordinated Debentures, would be a subordinated creditor
of the Corporation, subordinated in right of payment to all Senior Debt as set
forth in the Indenture, but entitled to receive payment in full of principal
and interest, before any stockholders of the Corporation receive payments or
distributions. Since the Corporation is the guarantor under each Guarantee and
has agreed to pay for all costs, expenses and liabilities of each Issuer
(other than the Issuer's obligations to the holders of its Preferred
Securities), the positions of a holder of such Preferred Securities and a
holder of such Corresponding Junior Subordinated Debentures relative to other
creditors and to stockholders of the Corporation in the event of liquidation
or bankruptcy of the Corporation are expected to be substantially the same.
PLAN OF DISTRIBUTION
The Junior Subordinated Debentures or the Preferred Securities may be sold
in a public offering to or through underwriters or dealers designated from
time to time. The Corporation and each Issuer may sell its Junior Subordinated
Debentures or Preferred Securities as soon as practicable after effectiveness
of the Registration Statement of which this Prospectus forms a part. The names
of any underwriters or dealers involved in the sale of the Junior Subordinated
Debentures or Preferred Securities in respect of which this Prospectus is
delivered, the amount or number of Junior Subordinated Debentures and
Preferred Securities to be purchased by any such underwriters and any
applicable commissions or discounts will be set forth in the applicable
Prospectus Supplement.
Underwriters may offer and sell Junior Subordinated Debentures or Preferred
Securities at a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. In connection with the
sale of Preferred Securities, underwriters may be deemed to have received
compensation from the Corporation and/or the applicable Issuer in the form of
underwriting discounts or commissions and may also receive commissions.
Underwriters may sell Junior Subordinated Debentures or Preferred Securities
to or through dealers, and such dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters.
Any underwriting compensation paid by the Corporation and/or the applicable
Issuer to underwriters in connection with the offering of Junior Subordinated
Debentures or Preferred Securities, and any discounts, concessions or
commissions allowed by such underwriters to participating dealers, will be
described in an accompanying Prospectus Supplement. Underwriters and dealers
participating in the distribution of Junior Subordinated Debentures or
Preferred Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of such
Junior Subordinated Debentures or Preferred Securities may be deemed to be
underwriting discounts and commissions, under the Securities Act.
41
<PAGE>
Underwriters and dealers may be entitled, under agreement with the Corporation
and the applicable Issuer, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act, and
to reimbursement by the Corporation for certain expenses.
In connection with the offering of the Preferred Securities of any Issuer,
such Issuer may grant to the underwriters an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), as may be set
forth in the accompanying Prospectus Supplement. If such Issuer grants any
over-allotment option, the terms of such over-allotment option will be set
forth in the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Corporation and/or the applicable Issuer and/or any of their
affiliates in the ordinary course of business.
The Junior Subordinated Debentures and the Preferred Securities will be new
issues of securities and will have no established trading market. Any
underwriters to whom Junior Subordinated Debentures or Preferred Securities
are sold for public offering and sale may make a market in such Junior
Subordinated Debentures and Preferred Securities, but such underwriters will
not be obligated to do so and may discontinue any market making at any time
without notice. Such Junior Subordinated Debentures or Preferred Securities
may or may not be listed on a national securities exchange or the Nasdaq
National Market. No assurance can be given as to the liquidity of or the
existence of trading markets for any Junior Subordinated Debentures or
Preferred Securities.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, certain
matters of Delaware law relating to the validity of the Preferred Securities,
the enforceability of the Trust Agreements and the formation of the Issuers
will be passed upon by Richards, Layton & Finger, P.A. One Rodney Square,
Wilmington, Delaware 19801, special Delaware counsel to the Corporation and
the Issuers. Unless otherwise indicated in the applicable Prospectus
Supplement, the validity of the Guarantees and the Junior Subordinated
Debentures will be passed upon for the Corporation by Sullivan & Cromwell, 125
Broad Street, New York, New York 10004, and for the underwriters by Milbank,
Tweed, Hadley & McCloy, One Chase Manhattan Plaza, New York, New York 10005.
Certain matters relating to United States Federal income tax considerations
will be passed upon for the Corporation by Sullivan & Cromwell, as special tax
counsel for the Corporation. Milbank, Tweed, Hadley & McCloy from time to time
performs legal services for the Corporation.
EXPERTS
The consolidated financial statements of the Corporation appearing in its
Annual Report on Form 10-K, dated December 31, 1996, and for the year then
ended, have been audited by Ernst & Young LLP, independent auditors, and at
December 31, 1995, and for each of the two years in the period ended December
31, 1995, by Deloitte & Touche LLP, independent auditors, as set forth in
their respective reports thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such reports given upon the authority of such firms
as experts in accounting and auditing.
42
<PAGE>
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR IN-
CORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPEC-
TUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION, THE ISSUERS OR BY THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUM-
STANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE CORPORATION OR THE ISSUERS SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLE-
MENT 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 SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk Factors.............................................................. S-4
BNY Capital III........................................................... S-9
The Corporation........................................................... S-10
Recent Developments....................................................... S-10
Consolidated Ratios of Earnings to Fixed Charges.......................... S-11
Use of Proceeds........................................................... S-11
Capitalization............................................................ S-12
Accounting Treatment...................................................... S-13
Certain Terms of Series D Preferred Securities............................ S-13
Certain Terms of Series D Subordinated Debentures......................... S-16
Certain Terms of Series D Guarantee....................................... S-20
Certain Federal Income Tax Consequences................................... S-21
Underwriting.............................................................. S-24
Validity of Securities.................................................... S-25
PROSPECTUS
Available Information..................................................... 4
Incorporation of Certain Documents by Reference........................... 5
The Corporation........................................................... 6
Certain Regulatory Considerations......................................... 6
The Issuers............................................................... 10
Use of Proceeds........................................................... 11
Description of Junior Subordinated Debentures............................. 11
Description of Preferred Securities....................................... 23
Book-Entry Issuance....................................................... 35
Description of Guarantees................................................. 37
Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures, the Expense Agreement and the Guarantees........ 40
Plan of Distribution...................................................... 41
Validity of Securities.................................................... 42
Experts................................................................... 42
</TABLE>
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PREFERRED SECURITIES
BNY CAPITAL III
%
PREFERRED SECURITIES,
SERIES D
FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
THE BANK OF NEW YORK COMPANY, INC.
-----------
PROSPECTUS SUPPLEMENT
-----------
REPRESENTATIVES OF THE UNDERWRITERS
, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration fee under the Securities Act of 1933, as
amended...................................................... $151,515.15
Blue Sky fees and expenses (including counsel fees)........... *
Fees of rating agencies....................................... *
Trustees' fee and expenses.................................... *
Printing and engraving........................................ *
Accounting services........................................... *
Legal fees of Registrant's counsel............................ $150,000.00
Miscellaneous................................................. *
-----------
Total....................................................... $ *
===========
</TABLE>
- --------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-laws of the Corporation (Section 7.1) provide the following:
Except to the extent expressly prohibited by the New York Business
Corporation Law, the Company shall indemnify any person made or threatened to
be made a party to any action or proceeding, whether civil or criminal, by
reason of the fact that such person or such person's testator or intestate is
or was a director or officer of the Company or serves or served at the request
of the Company, any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, penalties, amounts paid in settlement and reasonable expenses,
including attorneys' fees, incurred in connection with such action or
proceeding, or any appeal therein; provided that no such indemnification shall
be made if a judgment or other final adjudication adverse to such person
established that his or her acts were committed in bad faith or were the
result of active and deliberate dishonesty and were material to the cause of
action so adjudicated, or that he or she personally gained in fact a financial
profit or other advantage to which he or she was not legally entitled; and
provided further that no such indemnification shall be required with respect
to any settlement or other nonadjudicated disposition of any threatened or
pending action or proceeding unless the Company has given its prior consent to
such settlement or other disposition.
The Company may advance or promptly reimburse upon request any person
entitled to indemnification hereunder for all expenses, including attorney's
fees, reasonably incurred in defending any action or proceeding in advance of
the final disposition thereof upon receipt of an undertaking by or on behalf
of such person to repay such amount if such person is ultimately found not to
be entitled to indemnification or, where indemnification is granted, to the
extent the expenses so advanced or reimbursed exceed the amount to which such
person is entitled; provided, however, that such person shall cooperate in
good faith with any request by the Company that common counsel be utilized by
the parties to an action or proceeding who are similarly situated unless to do
so would be inappropriate due to actual or potential differing interests
between or among such parties.
Nothing herein shall limit or affect any right of any person otherwise than
hereunder to indemnification or expenses, including attorney's fees, under any
statute, rule, regulation, certificate of incorporation, by-law, insurance
policy, contract or otherwise.
II-1
<PAGE>
Anything in these By-laws to the contrary notwithstanding, no elimination of
this By-law, and no amendment to this By-law adversely affecting the right of
any person to indemnification or advancement of expenses hereunder, shall be
effective until the 60th day following notice to such person of such action,
and no elimination of or amendment to this By-law shall deprive any person of
his or her rights hereunder arising out of alleged or actual occurrences, acts
or failures to act prior to such 60th day.
The Company shall not, except by elimination of or amendment to this By-law
in a manner consistent with the preceding paragraph, take any corporate action
or enter into any agreement which prohibits, or otherwise limits the rights of
any person to, indemnification in accordance with the provisions of this By-
law. The indemnification of any person provided by this By-law shall continue
after such person has ceased to be a director or officer of the Company and
shall inure to the benefit of such person's heirs, executors, administrators
and legal representatives.
The Company is authorized to enter into agreements with any of its directors
or officers extending rights to indemnification and advancement of expenses to
such person to the fullest extent permitted by applicable law, but the failure
to enter into any such agreement shall not affect or limit the rights of such
person pursuant to this By-law, it being expressly recognized hereby that all
directors or officers of the Company by serving as such after the adoption
hereof, are acting in reliance hereon and that the Company is estopped to
contend otherwise.
In case any provision in this By-law shall be determined at any time to be
unenforceable in any respect, the other provisions shall not in any way be
affected or impaired thereby, and the affected provision shall be given the
fullest possible enforcement in the circumstances, it being the intention of
the Company to afford indemnification and advancement of expenses to its
directors and officers, acting in such capacities or in the other capacities
mentioned herein, to the fullest extent permitted by law.
For purposes of this By-law, the Company shall be deemed to have requested a
person to serve an employee benefit plan where the performance by such person
of his or her duties to the Company also imposes duties on, or otherwise
involves services by, such person to the plan or participants or beneficiaries
of the plan, and excise taxes assessed on a person with respect to any
employee benefit plan pursuant to applicable law shall be considered
indemnifiable expenses. For purposes of this By-law, the term "Company" shall
include any legal successor to the Company, including any corporation which
acquires all or substantially all of the assets of the Company in one or more
transactions.
A person who has been successful, on the merits or otherwise, in the defense
of a civil or criminal action or proceeding of the character described in the
first paragraph of this By-law shall be indemnified as authorized in such
paragraph. Except as provided in the preceding sentence and unless ordered by
a court, indemnification under this By-law shall be made by the Company if,
and only if, authorized in the specific case:
(1) By the Board of Directors acting by a quorum consisting of directors
who are not parties to such action or proceeding upon a finding that the
director or officer has met the standard of conduct set forth in the first
paragraph of this By-law, or,
(2) If such a quorum is not obtainable or, even if obtainable, a quorum
of disinterested directors so directs:
(a) by the Board of Directors upon the opinion in writing of
independent legal counsel that indemnification is proper in the
circumstances because the standard of conduct set forth in the first
paragraph of this By-law has been met by such director or officer; or
(b) by the shareholders upon a finding that the director or officer
has met the applicable standard of conduct set forth in such paragraph.
II-2
<PAGE>
If any action with respect to indemnification of directors and officers is
taken by way of amendment of these By-laws, resolution of directors, or by
agreement, the Company shall, not later than the next annual meeting of
shareholders, unless such meeting is held within three months from the date of
such action and, in any event, within fifteen months from the date of such
action, mail to its shareholders of record at the time entitled to vote for
the election of directors a statement specifying the action taken.
With certain limitations, Sections 721 through 726 of the New York Business
Corporation Law permit a corporation to indemnify a director or officer made a
party to an action (i) by a corporation or in its right in order to procure a
judgment in its favor unless he shall have breached his duties, or (ii) other
than an action by or in the right of the corporation in order to procure a
judgment in its favor if such director or officer acted in good faith and in a
manner he reasonably believed to be in or, in certain cases, not opposed to
such corporation's best interests, and additionally, in criminal actions, has
no reasonable cause to believe his conduct was unlawful.
In addition, the Corporation maintains a directors' and officers' liability
insurance policy.
Reference is made to the indemnity provisions in the Underwriting Agreement
which is filed as Exhibit 1 to this Registration Statement.
Under each Trust Agreement, the Corporation will agree to indemnify each of
the Trustees of the Issuer with respect thereto or any predecessor Trustee for
the Issuer, and to hold such Trustees harmless against any loss, damage,
claims, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the Trust Agreements, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties under the Trust Agreements.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1 Form of Underwriting Agreement
3(a) Restated Certificate of Incorporation of the Corporation, incorporated
by reference to Exhibit 4 to the Corporation's Quarterly Report on
Form 10-Q, filed November 10, 1994 (File No. 1-6152).
3(b) Certificate of Amendment of the Certificate of Incorporation of the
Corporation, incorporated by reference to Exhibit 4 to the
Corporation's Quarterly Report on Form 10-Q, filed August 15, 1996
(File No. 1-6152).
3(c) By-laws of the Corporation, incorporated by reference to Exhibit 3(a)
to the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987 (File No. 1-6152).
4(a) Junior Subordinated Indenture, dated as of December 25, 1996, between
the Corporation and The First National Bank of Chicago, as Trustee,
incorporated by reference to Exhibit 4.1 to the Corporation's Current
Report on Form 8-K, filed June 16, 1997.
4(b) Certificate of Trust of BNY Capital III**
4(c) Trust Agreement of BNY III**
4(d) Certificate of Trust of BNY Capital IV**
4(e) Trust Agreement of BNY Capital IV**
4(f) Certificate of Trust of BNY Capital V**
4(g) Trust Agreement of BNY Capital V**
4(h) Form of Amended and Restated Trust Agreement of BNY Capital III, IV
and V**
4(i) Form of Preferred Security Certificate for BNY Capital III, IV, and V
(included as Exhibit E of Exhibit 4(h))
4(j) Form of Guarantee Agreement for BNY Capital III, IV and V**
5(a) Opinion of Sullivan & Cromwell as to legality of the Junior
Subordinated Debentures and the Guarantees to be issued by the
Corporation
5(b) Opinion of Richards, Layton & Finger, P.A. as to validity of the
Preferred Securities to be issued by BNY Capital III
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
5(c) Opinion of Richards, Layton & Finger, P.A. as to validity of the
Preferred Securities to be issued by BNY Capital IV
5(d) Opinion of Richards, Layton & Finger, P.A. as to validity of the
Preferred Securities to be issued by BNY Capital V
8 Opinion of Sullivan & Cromwell as to certain federal income tax
matters
12 Computation of ratio of earnings to fixed charges, incorporated by
reference to Exhibits 12 to the Corporation's Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 1997 (File No.
1-6152) and the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 (File No. 1-6152).
23(a) Consent of Ernst & Young LLP*
23(b) Consent of Deloitte & Touche LLP*
23(c) Consents of Sullivan & Cromwell (included in 5(a) and 8, respectively)
23(d) Consents of Richards, Layton & Finger, P.A. (included in 5(b) through
(d))
24 Powers of Attorney*
25(a) Form T-1 Statement of Eligibility of The First National Bank of
Chicago to act as trustee under the Junior Subordinated Indenture**
25(b) Form T-1 Statement of Eligibility of The First National Bank of
Chicago to act as trustee under the Amended and Restated Trust
Agreement of BNY Capital III*
25(c) Form T-1 Statement of Eligibility of The First National Bank of
Chicago to act as trustee under the Amended and Restated Trust
Agreement of BNY Capital IV*
25(d) Form T-1 Statement of Eligibility of The First National Bank of
Chicago to act as trustee under the Amended and Restated Trust
Agreement of BNY Capital V*
25(e) Form T-1 Statement of Eligibility of The First National Bank of
Chicago under the Guarantee for the benefit of the holders of
Preferred Securities of BNY Capital III*
25(f) Form T-1 Statement of Eligibility of The First National Bank of
Chicago under the Guarantee for the benefit of the holders of
Preferred Securities of BNY Capital IV*
25(g) Form T-1 Statement of Eligibility of The First National Bank of
Chicago under the Guarantee for the benefit of the holders of
Preferred Securities of BNY Capital V*
</TABLE>
- --------
* Previously filed.
** Incorporated by reference to the Exhibits to the Corporation's Registration
Statement on Form S-3, as filed with the Commission on December 13, 1996
(Reg. Nos. 333-15951 and 333-15951-01 through 05).
ITEM 17. UNDERTAKINGS.
Each of the undersigned Registrants, hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
each Registrant pursuant to the provisions described under Item 15 above, or
otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by each Registrant of expenses incurred or paid by a director, officer
or controlling person of each Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, each
Registrant will, unless in the opinion of its counsel the matter has been
settled by the controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
Each of the undersigned Registrants hereby also undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment thereto) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in post-effective amendment by those
paragraphs is contained in periodic reports filed by a Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) to provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.
(5) That, for the purposes of determining any liability under the Securities
Act of 1933:
(i) The information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the Registration pursuant to Rule 424(b)(1) or
(4) or 487(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(ii) Each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
BANK OF NEW YORK COMPANY, INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS
DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW
YORK, ON THE 17TH DAY OF DECEMBER, 1997.
The Bank of New York Company, Inc.
(Registrant)
/s/ Robert E. Keilman
By: _________________________________
Robert E. Keilman
Comptroller
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE 17TH DAY OF DECEMBER, 1997.
SIGNATURE TITLE
* Chairman and Director
- -------------------------------------
(J. CARTER BACOT)
Senior Executive Vice President and
/s/ Deno D. Papageorge Director
- -------------------------------------
(DENO D. PAPAGEORGE)
Comptroller (Principal Accounting
/s/ Robert E. Keilman Officer)
- -------------------------------------
(ROBERT E. KEILMAN)
* Director
- -------------------------------------
(RICHARD BARTH)
* Director
- -------------------------------------
(FRANK J. BIONDI, JR.)
* Director
- -------------------------------------
(WILLIAM R. CHANEY)
II-6
<PAGE>
SIGNATURE TITLE
* Director
- -------------------------------------
(RALPH E. GOMORY)
* Vice Chairman and Director
- -------------------------------------
(ALAN R. GRIFFITH)
* Director
- -------------------------------------
(RICHARD J. KOGAN)
* Director
- -------------------------------------
(JOHN A. LUKE, JR.)
* Director
- -------------------------------------
(EDWARD L. HENNESSY, JR.)
* Director
- -------------------------------------
(JOHN C. MALONE)
* Director
- -------------------------------------
(DONALD L. MILLER)
* Director
- -------------------------------------
(H. BARCLAY MORLEY)
* Director
- -------------------------------------
(CATHERINE A. REIN)
II-7
<PAGE>
SIGNATURE TITLE
* President, Chief Executive Officer
- ------------------------------------- and Director
(THOMAS A. RENYI)
* Director
- -------------------------------------
(HOWARD E. SELLS)
- --------
* Deno D. Papageorge hereby signs this Registration Statement on Form S-3 on
the 17th day of December, 1997 on behalf of each of the indicated persons
for whom he is attorney-in-fact pursuant to a power of attorney filed
herein.
/s/ Deno D. Papageorge
- -------------------------------------
(DENO D. PAPAGEORGE, ATTORNEY-IN-
FACT)
II-8
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BNY CAPITAL III
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK, AND STATE OF NEW YORK ON THE 17TH DAY OF
DECEMBER, 1997.
BNY Capital III
By: The Bank of New York Company,
Inc.,as Depositor
/s/ Robert E. Keilman
By: _________________________________
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BNY CAPITAL IV
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK, AND STATE OF NEW YORK ON THE 17TH DAY OF
DECEMBER, 1997.
BNY Capital IV
By: The Bank of New York Company,
Inc.,as Depositor
/s/ Robert E. Keilman
By: _________________________________
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BNY CAPITAL V
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK, AND STATE OF NEW YORK ON THE 17TH DAY OF
DECEMBER, 1997.
BNY Capital V
By: The Bank of New York Company,
Inc.,as Depositor
/s/ Robert E. Keilman
By: _________________________________
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
EXHIBIT NO.
------- ----
<C> <S> <C>
1 Form of Underwriting Agreement
3(a) Restated Certificate of Incorporation of the Corporation,
incorporated by reference to Exhibit 4 to the Corporation's
Quarterly Report on Form 10-Q, filed November 10, 1994 (File
No. 1-6152).
3(b) Certificate of Amendment of the Certificate of Incorporation of
the Corporation, incorporated by reference to Exhibit 4 to the
Corporation's Quarterly Report on Form 10-Q, filed August 15,
1996 (File No. 1-6152).
3(c) By-laws of the Corporation, incorporated by reference to
Exhibit 3(a) to the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987 (File No. 1-6152).
4(a) Junior Subordinated Indenture, dated as of December 25, 1996,
between the Corporation and The First National Bank of
Chicago, as Trustee, incorporated by referenced to Exhibit 4.1
to the Corporation's Current Report on Form 8-K filed June 16,
1997.
4(b) Certificate of Trust of BNY Capital III**
4(c) Trust Agreement of BNY III**
4(d) Certificate of Trust of BNY Capital IV**
4(e) Trust Agreement of BNY Capital IV**
4(f) Certificate of Trust of BNY Capital V**
4(g) Trust Agreement of BNY Capital V**
4(h) Form of Amended and Restated Trust Agreement of BNY Capital
III, IV and V**
4(i) Form of Preferred Security Certificate for BNY Capital III, IV,
and V (included as Exhibit E of Exhibit 4(h))
4(j) Form of Guarantee Agreement for BNY Capital III, IV and V**
5(a) Opinion of Sullivan & Cromwell as to legality of the Junior
Subordinated Debentures and the Guarantees to be issued by the
Corporation
5(b) Opinion of Richards, Layton & Finger, P.A. as to validity of
the Preferred Securities to be issued by BNY Capital III
5(c) Opinion of Richards, Layton & Finger, P.A. as to validity of
the Preferred Securities to be issued by BNY Capital IV
5(d) Opinion of Richards, Layton & Finger, P.A. as to validity of
the Preferred Securities to be issued by BNY Capital V
8 Opinion of Sullivan & Cromwell as to certain federal income tax
matters
12 Computation of ratio of earnings to fixed charges, incorporated
by reference to Exhibits 12 to the Corporation's Quarterly
Report on Form 10-Q for the quarterly period ended September
30, 1997 (File No. 1-6152) and the Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996 (File
No. 1-6152).
23(a) Consent of Ernst & Young LLP*
23(b) Consent of Deloitte & Touche LLP*
23(c) Consents of Sullivan & Cromwell (included in 5(a) and 8,
respectively)
23(d) Consents of Richards, Layton & Finger, P.A. (included in 5(b)
through (d))
24 Powers of Attorney*
25(a) Form T-1 Statement of Eligibility of The First National Bank of
Chicago to act as trustee under the Junior Subordinated
Indenture**
25(b) Form T-1 Statement of Eligibility of The First National Bank of
Chicago to act as trustee under the Amended and Restated Trust
Agreement of BNY Capital III*
25(c) Form T-1 Statement of Eligibility of The First National Bank of
Chicago to act as trustee under the Amended and Restated Trust
Agreement of BNY Capital IV*
25(d) Form T-1 Statement of Eligibility of The First National Bank of
Chicago to act as trustee under the Amended and Restated Trust
Agreement of BNY Capital V*
25(e) Form T-1 Statement of Eligibility of The First National Bank of
Chicago under the Guarantee for the benefit of the holders of
Preferred Securities of BNY Capital III*
25(f) Form T-1 Statement of Eligibility of The First National Bank of
Chicago under the Guarantee for the benefit of the holders of
Preferred Securities of BNY Capital IV*
25(g) Form T-1 Statement of Eligibility of The First National Bank of
Chicago under the Guarantee for the benefit of the holders of
Preferred Securities of BNY Capital V*
</TABLE>
- --------
* Previously filed.
** Incorporated by reference to the Exhibits to the Corporation's Registration
Statement on Form S-3, as filed with the Commission on December 13, 1996
(Reg. Nos. 333-15951 and 333-15951-01 through 05).
<PAGE>
EXHIBIT 1
BNY CAPITAL III
BNY CAPITAL IV
BNY CAPITAL V
Preferred Securities
guaranteed to the extent set forth in Guarantees by
THE BANK OF NEW YORK COMPANY, INC.
Underwriting Agreement Standard Provisions
(December 1997)
From time to time, BNY Capital III, BNY Capital IV or BNY Capital V,
each a statutory business trust formed under the laws of the State of Delaware
(each a "Trust" and collectively, the "Trusts"), and The Bank of New York
Company, Inc., a New York corporation (the "Company"), as depositor of each
Trust and as Guarantor, may enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, which shall provide that the Trust
identified in the applicable Pricing Agreement (such Trust being the "Designated
Trust" with respect to such Pricing Agreement) shall issue and sell to the firms
named in Schedule I to the applicable Pricing Agreement (such firms constituting
the "Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its preferred securities (the "Securities")
identified in Schedule I to the applicable Pricing Agreement (with respect to
such Pricing Agreement, the "Firm Designated Securities") representing undivided
beneficial interests in the assets of the Designated Trust. If specified in
such Pricing Agreement, the Designated Trust may grant to the Underwriters the
right to purchase at their election an additional number of Securities,
specified in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Designated Securities"). The Firm Designated Securities and any
Optional Designated Securities, if any, are collectively called the "Designated
Securities." The proceeds of the concurrent sales of the Designated Securities
to the public and of the common securities of the Designated Trust (the "Common
Securities") to the Company are to be invested in junior subordinated deferrable
interest debentures of the Company identified in the Pricing Agreement with
respect to such Designated Securities (with respect to such Pricing Agreement,
the "Subordinated Debentures"), to be issued pursuant to a junior subordinated
indenture dated as of December 25, 1996 between the Company and The First
National Bank of Chicago, as trustee (the "Indenture"). The Designated
Securities may be exchangeable into Subordinated Debentures as specified in
Schedule II to such Pricing Agreement. The Designated Securities will be
guaranteed by the Company to the extent set forth in the Pricing Agreement with
respect to such Designated Securities (with respect to such Pricing Agreement,
the "Guarantee").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the amended and restated trust agreement identified in such
Pricing Agreement (with respect to such Pricing Agreement, the "Trust
Agreement").
<PAGE>
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Designated Securities, for whom the firms
designated as representatives of the Underwriters of such Designated Securities
in the Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. These Underwriting
Agreement Standard Provisions shall not be construed as an obligation of any
Trust to sell any of its preferred securities or as an obligation of any
underwriters to purchase any of such preferred securities. The obligation of
any Trust to issue and sell any of its preferred securities and the obligation
of any underwriters to purchase any of such preferred securities shall be
evidenced by the Pricing Agreement with respect to the Designated Securities
specified therein. Each Pricing Agreement shall specify the maximum number of
Firm Designated Securities, the maximum number of Optional Designated
Securities, if any, the initial public offering price of such Firm and Optional
Designated Securities or the manner of determining such price, the terms of the
Designated Securities, including the terms on which and terms of the securities
into which the Designated Securities will be exchangeable, the purchase price to
the Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters, the number of such Designated Securities to be purchased by each
Underwriter and the commission, if any, payable to the Underwriters with respect
thereto and shall set forth the date, time and manner of delivery of such Firm
and Optional Designated Securities, if any, and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Trust Agreement
with respect thereto or the Registration Statement and Prospectus as amended or
supplemented) the terms of such Designated Securities. Any Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The standard provisions set forth herein will be incorporated by
reference in any Pricing Agreement. The obligations of the Underwriters under
each Pricing Agreement shall be several and not joint.
2. Each of the Designated Trust and the Company, jointly and
severally, represents and warrants to, and agrees with, each of the Underwriters
that:
(a) A registration statement on Form S-3 (File Nos. 333-40837 and 333-
15951-01 through 333-40837-03) (the "Initial Registration Statement") in
respect of the preferred securities of the Trusts, including the Designated
Securities, and the junior subordinated deferrable interest debentures and
guarantees of the Company, as guarantor, including the Subordinated
Debentures and the Guarantee, has been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration Statement
and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding exhibits
to such registration statement, but including all documents incorporated by
reference in the prospectus contained therein, to the Representatives for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than the registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement or document
incorporated
-2-
<PAGE>
by reference therein has heretofore been filed, or transmitted for filing,
with the Commission (other than prospectuses filed pursuant to Rule 424(b)
of the rules and regulations of the Commission under the Act, each in the
form heretofore delivered to the Representatives); and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the Act, is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, but excluding Form T-1, or such
part of the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
preferred securities of the Trusts and the junior subordinated deferrable
interest debentures and the guarantees of the Company related to such
preferred securities, in the form in which it has most recently been filed,
or transmitted for filing, with the Commission on or prior to the date of
the relevant Pricing Agreement, is hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the
form in which it is filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may
-3-
<PAGE>
be, will conform in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Designated Trust or the Company by
an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Designated Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Designated Trust or the Company by an Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended
or supplemented relating to such Designated Securities or to that part of
the Registration Statement which shall constitute the Statement of
Eligibility under the Trust Indenture Act (Form T-1) of The First National
Bank of Chicago;
(d) Since the date of the latest audited financial statements included
in or incorporated by reference in the Registration Statement and the
Prospectus, there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
creditworthiness of the Company and its subsidiaries on a consolidated
basis otherwise than as set forth or contemplated in the Prospectus;
(e) Each of the Company and The Bank of New York (the "Bank") has been
duly organized and is validly existing as a corporation or banking
corporation, as the case may be, and is an existing corporation or banking
corporation, as the case may be, in good standing under the laws of the
State of New York;
(f) All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and non-
assessable; and all of the issued shares of capital stock of the Bank have
been duly and validly authorized and issued, are fully paid and non-
assessable (except as provided in Article III of the Banking Law of the
State of New York) and are owned by the Company, free and clear of all
liens, encumbrances, equities or claims;
(g) The Designated Trust has been duly organized and is validly
existing as a business trust in good standing under the laws of the State
of Delaware, with power
-4-
<PAGE>
and authority (trust and other) to own its property and conduct its
business as described in the Prospectus, and to enter into and perform its
obligations under this Agreement and the Designated Securities and to
consummate the transactions contemplated by the Pricing Agreement with
respect to such Designated Securities (including without limitation the
provisions hereof incorporated by reference therein); the Designated Trust
has no subsidiaries and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or
the ownership of its property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Designated Trust; the Designated
Trust has conducted and will conduct no business other than the
transactions contemplated by the Pricing Agreement (including without
limitation the provisions hereof incorporated by reference therein) and
described in the Prospectus as amended and supplemented with respect to the
Designated Securities; the Designated Trust is not a party to or bound by
any agreement or instrument other than the Pricing Agreement with respect
to such Designated Securities (including without limitation the provisions
hereof incorporated by reference therein), the Trust Agreement of the
Designated Trust and the agreements and instruments contemplated by such
Trust Agreement and described in the Prospectus as amended and supplemented
with respect to the Designated Securities; the Designated Trust has no
liabilities or obligations other than those arising out of the transactions
contemplated by the Pricing Agreement with respect to such Designated
Securities (including without limitation the provisions hereof incorporated
by reference therein) and the Trust Agreement of the Designated Trust and
described in the Prospectus as amended and supplemented with respect to
such Designated Securities; the Designated Trust is not a party to or
subject to any action, suit or proceeding of any nature; the Designated
Trust is not, and at the Time of Delivery will not be, classified as an
association taxable as a corporation for United States federal income tax
purposes;
(h) The Designated Securities have been duly authorized on behalf of
the Designated Trust by the Company, as depositor of the Designated Trust,
and, when the Firm Designated Securities are issued and delivered pursuant
to the Pricing Agreement (including without limitation the provisions
hereof incorporated by reference therein) with respect to such Designated
Securities and, in the case of any Optional Designated Securities, pursuant
to Over-allotment Options (as defined in Section 3 hereof) with respect to
such Designated Securities, such Designated Securities will have been duly
and validly issued and fully paid and non-assessable beneficial interests
in the Designated Trust entitled to the benefits provided by the Trust
Agreement, which will be substantially in the form filed as an exhibit to
the Registration Statement; and the preferred securities of the Designated
Trust conform to the description thereof contained in the Registration
Statement and the Designated Securities will conform to the description
thereof contained in the Prospectus as amended or supplemented with respect
to such Designated Securities;
(i) The holders of the Designated Securities (the "Securityholders")
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; the issuance of the Designated
Securities is not subject to preemptive or similar rights;
-5-
<PAGE>
(j) The Common Securities of the Designated Trust have been duly authorized
on behalf of the Designated Trust by the Company, as depositor of the
Designated Trust, and upon delivery by the Designated Trust to the Company
against payment therefor as set forth in the Trust Agreement, will be duly
and validly issued and nonassessable beneficial interests in the Designated
Trust and will conform to the description thereof contained in the
Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Time of Delivery (as defined
in Section 4 hereof), all of the issued and outstanding Common Securities
of the Designated Trust will be directly owned by the Company free and
clear of liens, encumbrances, equities or claims;
(k) The Guarantee, the Trust Agreement, the Subordinated Debentures,
the Agreement as to Expenses and Liabilities and the Indenture (the
Guarantee, the Trust Agreement, the Subordinated Debentures, the Agreement
as to Expenses and Liabilities and the Indenture being collectively
referred to as the "Company Agreements") have each been duly authorized and
when validly executed and delivered by the Company and, in the case of the
Guarantee, by the Guarantee Trustee (as defined in the Guarantee), in the
case of the Trust Agreement, by the Issuer Trustees (as defined in the
Trust Agreement) and, in the case of the Indenture, by the Trustee named
therein (the "Debenture Trustee"), and, in the case of the Subordinated
Debentures, when validly issued by the Company and validly authenticated
and delivered by the Debenture Trustee, will constitute valid and legally
binding obligations of the Company, enforceable in accordance with their
respective terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; the Trust Agreement, the Indenture and the Guarantee
have each been duly qualified under the Trust Indenture Act; the
Subordinated Debentures are entitled to the benefits of the Indenture; and
the Company Agreements, which will be in substantially the form filed as
exhibits to the Registration Statement, will conform to the descriptions
thereof in the Prospectus as amended or supplemented with respect to the
Designated Securities to which they relate;
(l) The issue and sale of the Designated Securities and the compliance
by the Designated Trust with all of the provisions of the Designated
Securities, the Trust Agreement, the Pricing Agreement (including without
limitation the provisions hereof incorporated by reference therein) with
respect to such Designated Securities and the Over-allotment Option with
respect to any Optional Designated Securities, the purchase of the
Subordinated Debentures by the Designated Trust and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Designated Trust is
a party or by which the Designated Trust is bound or to which any of the
property or assets of the Designated Trust is subject, nor will such action
result in any violation of the provisions of the Trust Agreement or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Designated Trust or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for
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the issue and sale of the Designated Securities and the Common Securities
by the Designated Trust, the purchase of the Subordinated Debentures by the
Designated Trust or the consummation by the Designated Trust of the
transactions contemplated by the Pricing Agreement (including without
limitation the provisions hereof incorporated by reference therein) with
respect to such Designated Securities or the Trust Agreement, except such
as have been, or will have been prior to the Time of Delivery, obtained
under the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
(m) The issuance by the Company of the Guarantee, the compliance by
the Company with all of the provisions of the Pricing Agreement (including
without limitation the provisions hereof incorporated by reference therein)
with respect to such Designated Securities, the execution, delivery and
performance by the Company of the Company Agreements, and the consummation
of the transactions contemplated herein and therein will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
by-laws of the Company or the charter or by-laws of any of its subsidiaries
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties; and no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the issue of
the Guarantee or the consummation by the Company of the transactions
contemplated by the Pricing Agreement (including without limitation the
provisions hereof incorporated by reference therein) with respect to such
Designated Securities or the Company Agreements except such as have been,
or will have been obtained prior to the Time of Delivery and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the Underwriters;
(n) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened against or affecting, the Company or
any of its subsidiaries (including the Designated Trust), which might
result in any material adverse change in the financial condition,
shareholders' equity or results of operations of the Company and its
subsidiaries (including the Designated Trust) considered as one enterprise;
(o) Neither the Designated Trust nor the Company is, nor after giving
effect to the offering and sale of the Designated Securities will either
be, an "investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of 1940,
as amended (the "Investment Company Act");
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<PAGE>
(p) Deloitte & Touche LLP, who have certified the financial statements of
the Company and its subsidiaries included in or incorporated by reference
in the Prospectus, are independent public accountants as required by the
Act and the rules and regulations of the Commission thereunder; and
(q) The Pricing Agreement with respect to the Designated Securities
(incorporating the provisions hereof) has been duly authorized, executed
and delivered by the Company and the Designated Trust.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
the Firm Designated Securities, the several Underwriters propose to offer the
Firm Designated Securities for sale upon the terms and conditions set forth in
the Prospectus as amended or supplemented.
The Designated Trust may specify in the Pricing Agreement applicable
to any Designated Securities that the Designated Trust thereby grants to the
Underwriters the right (an "Over-allotment Option") to purchase at their
election up to the number of Optional Designated Securities specified in such
Pricing Agreement, on the terms set forth in the paragraph above, for the sole
purpose of covering over-allotments in the sale of the Firm Designated
Securities. Any such election to purchase Optional Designated Securities may be
exercised only by written notice from the Representatives to the Designated
Trust and the Company, given within the period specified in the Pricing
Agreement, setting forth the aggregate number of Optional Designated Securities
to be purchased and the date on which such Optional Designated Securities are to
be delivered (the Second Time of Delivery as defined in Section 4 hereof), as
determined by the Representatives but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless the Representatives, the
Company and the Designated Trust otherwise agree in writing, earlier than or
later than the respective number of business days after the date of such notice
set forth in such Pricing Agreement.
The number of Optional Designated Securities to be added to the number
of Firm Designated Securities to be purchased by each Underwriter as set forth
in Schedule I to the Pricing Agreement applicable to such Designated Securities
shall be, in each case, the number of Optional Designated Securities which each
of the Company and the Designated Trust has been advised by the Representatives
have been attributed to such Underwriter, provided that, if each of the Company
and the Designated Trust has not been so advised, the number of Optional
Designated Securities to be so added shall be, in each case, that proportion of
Optional Designated Securities which the number of Firm Designated Securities to
be purchased by such Underwriter under such Pricing Agreement bears to the
aggregate number of Firm Designated Securities (rounded as the Representatives
may determine to the nearest 100 securities). The total number of Designated
Securities to be purchased by all the Underwriters pursuant to such Pricing
Agreement shall be the aggregate number of Firm Designated Securities set forth
in Schedule I to such Pricing Agreement plus the aggregate number of Optional
Designated Securities which the Underwriters elect to purchase.
4. Certificates representing the Firm Designated Securities and the
Optional Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request
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<PAGE>
upon at least forty-eight hours' prior notice to the Designated Trust, shall be
delivered by or on behalf of the Designated Trust to the Representatives for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by wire transfer in immediately available
funds to the account of the Designated Trust specified in such Pricing
Agreement, (i) with respect to the Firm Designated Securities, all in the manner
and at the place and time and date specified in such Pricing Agreement or at
such other place and time and date as the Representatives and the Designated
Trust may agree upon in writing, such time and date being herein called the
"First Time of Delivery" and (ii) with respect to the Optional Designated
Securities, if any, in the manner and at the time and date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Designated Securities, or at
such other time and date as the Representatives and the Designated Securities
may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and date
for delivery is herein called a "Time of Delivery".
5. Each of the Designated Trust and the Company, jointly and severally,
agrees with each of the Underwriters of any Designated Securities:
(a) To file the Prospectus as amended or supplemented with respect to
the Designated Securities with the Commission; to make no further amendment
or any supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such
Designated Securities and prior to the Time of Delivery for such Designated
Securities which shall be reasonably disapproved by the Representatives for
such Designated Securities promptly after reasonable notice thereof; to
advise the Representatives promptly of any such amendment or supplement
after the Time of Delivery for such Designated Securities and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Designated Securities; to
advise the Representatives, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Designated
Securities, of the suspension of the qualification of such Designated
Securities or the Subordinated Debentures issuable upon termination of the
Designated Trust for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Designated Securities or suspending any such qualification, promptly to use
its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Designated
Securities or the Subordinated Debentures issuable upon termination of the
Designated Trust for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
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<PAGE>
distribution of such Designated Securities, provided that in connection
therewith neither the Designated Trust nor the Company shall be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time prior to nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Designated
Securities or the Subordinated Debentures issuable upon termination of the
Designated Trust and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify the Representatives and upon their request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a Prospectus in connection with sales of
the Designated Securities at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) In the case of the Company, to make generally available to its
security holders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Securities and continuing to and including the earlier
of (i) the termination of trading restrictions for such Designated
Securities, as notified to the Company by the Representatives and (ii) the
Time of Delivery for such Designated Securities, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder, any
preferred securities in any of the Trusts, any other beneficial interests
in the assets of the Designated Trust or any other Trust, or any preferred
securities or any other securities of the Designated Trust or the Company,
as the case may be, that are substantially similar to such Designated
Securities (including any guarantee of such securities) or any securities
that are convertible into or exchangeable for, or that represent the right
to receive securities, preferred securities or any such substantially
similar securities of either the Designated Trust, any other Trust or the
Company that are subordinated to the Senior Debt (as defined in the
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<PAGE>
Indenture) of the Company in a manner substantially similar to the
subordination of the Subordinated Debentures without the prior written
consent of the Representatives;
(f) In the case of the Company, to issue the Guarantee concurrently
with the issue and sale of the Designated Securities as contemplated in the
Pricing Agreement with respect to the Designated Securities and in the
Prospectus Supplement as amended and supplemented with respect to the
Designated Securities;
(g) To furnish to the holders of the Designated Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, shareholders' equity and cash flow
of the Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail; and
(h) If the Company and the Designated Trust elect to rely upon Rule
462(b), the Company and the Designated Trust shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b)
by 10:00 P.M., Washington, D.C. time, on the date of the Pricing Agreement
with respect to the Designated Securities, and the Company and the
Designated Trust shall at the time of filing either pay to the Commission
the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Trusts' and the Company's counsel and accountants in
connection with the registration of the preferred securities of the Trusts and
the guarantees and junior subordinated deferrable interest debentures of the
Company under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, these standard
provisions, the Pricing Agreement, the Trust Agreement, the Indenture, the
Guarantee, any Blue Sky or similar investment surveys or memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Designated
Securities; (iii) all expenses in connection with the qualification of the
Designated Securities, the Guarantee and the Subordinated Debentures for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Designated Securities and the Subordinated Debentures; (v) any filing
fees incident to, and the fees and disbursements of counsel for the Underwriters
in connection with, any required reviews by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Designated Securities
and the issuance of the Guarantee and the Subordinated Debentures; (vi) the cost
of preparing the Designated Securities and the Subordinated Debentures; (vii)
the fees and expenses of any
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<PAGE>
Trustee, Debenture Trustee and Guarantee Trustee, and any agent of any trustee
and the fees and disbursements of counsel for any trustee in connection with the
Trust Agreement, the Indenture, the Guarantee and the Designated Securities;
(viii) the cost of qualifying the Designated Securities with The Depository
Trust Company; (ix) all fees and expenses in connection with listing the
Designated Securities (and the Subordinated Debentures, if necessary) on the New
York Stock Exchange and the cost of registering the Designated Securities (and
the Subordinated Debentures, if necessary) under Section 12 of the Exchange Act;
and (x) all other costs and expenses incident to the performance of its
obligations or the obligations of the Designated Trust under the applicable
Pricing Agreement under any Over-allotment Options which are not otherwise
specifically provided for in this Section 6. It is understood, however, that,
except as provided in this Section 6, Section 8 and Section 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Designated Securities by
them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Designated Trust and
the Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Designated Trust
and the Company shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to the Representatives' reasonable satisfaction;
(b) Milbank, Tweed, Hadley & McCloy, Counsel for the Underwriters,
shall have furnished to the Representatives such opinion or opinions, dated
each Time of Delivery for such Designated Securities, with respect to the
incorporation of the Company and the formation of the Designated Trust, the
validity of the Designated Securities, the Subordinated Debentures, the
Guarantee, the Registration Statement, the Prospectus as amended or
supplemented and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Paul Immerman, Senior Counsel of The Bank of New York, shall have
furnished to the Representatives such written opinion or opinions, dated
each Time of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) Each of the Company and the Bank has been duly incorporated
and is an existing corporation or banking corporation, respectively,
in good standing under the laws of the State of New York and the
Company has the corporate power and authority to own its properties
and conduct its business
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<PAGE>
as described in the Prospectus as amended or supplemented relating to
the Designated Securities;
(ii) The Company Agreements have each been duly authorized,
executed and delivered by the Company and constitute valid and legally
binding obligations of the Company, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; the Company Agreements conform to the
descriptions thereof in the Prospectus as amended or supplemented; the
Subordinated Debentures are entitled to the benefits provided by the
Indenture; and the Trust Agreement, the Indenture and the Guarantee
have each been duly qualified under the Trust Indenture Act;
(iii) The Subordinated Debentures being issued at such Time of
Delivery have been duly authorized in conformity with the terms of the
Indenture, and when such Subordinated Debentures have been duly
executed, authenticated and issued in conformity with the Indenture
and delivered against payment in accordance with the Pricing Agreement
with respect to the Designated Securities will constitute valid and
legally binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(iv) The Designated Securities have been duly authorized by the
Company, as depositor, on behalf of the Designated Trust;
(v) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Company or the
Designated Trust, as the case may be, on or prior to the date of such
opinion under the Federal laws of the United States and the laws of
the State of New York for the issuance, sale and delivery of the
Designated Securities by the Designated Trust to the Underwriters and
the issuance, sale and delivery by the Company to the Designated Trust
of the Subordinated Debentures and the execution and delivery by the
Company of the Guarantee with respect to the Designated Securities, in
accordance with the Pricing Agreement with respect to the Designated
Securities, have been obtained or made (except that such counsel need
express no opinion with respect to Federal or state securities laws,
other antifraud laws, fraudulent transfer laws, the Employee
Retirement Income Security Act of 1974 and related laws and laws that
restrict transactions between United States persons and citizens or
residents of certain foreign countries);
(vi) The Pricing Agreement (including without limitation the
provisions hereof incorporated by reference therein) with respect to
the Designated Securities has been duly authorized, executed and
delivered by the Company;
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<PAGE>
(vii) The execution and delivery by the Company of the
Indenture, the Guarantee and the Pricing Agreement with respect to the
Designated Securities do not, and the issuance of the Subordinated
Debentures being issued at such Time of Delivery in accordance with
the Indenture, the sale by the Company of the Subordinated Debentures
as contemplated in the Prospectus as amended and supplemented and the
performance by the Company of its obligations under the Company
Agreements, the Pricing Agreement with respect to the Designated
Securities and the Subordinated Debentures will not violate the
Company's Restated Certificate of Incorporation, as amended, or By-
Laws, in each case as in effect at the date of such opinion, result in
a default under or breach of certain agreements specified in an annex
to such opinion, in each case as in effect at the date of such
opinion, or violate any existing Federal law of the United States or
law of the State of New York applicable to the Company (except that
such counsel need express no opinion with respect to Federal or state
securities laws, other antifraud laws, fraudulent transfer laws, the
Employee Retirement Income Security Act of 1974 and related laws and
laws that restrict transactions between United States persons and
citizens or residents of certain foreign countries, and insofar as
performance by the Company of its obligations under the Indenture, the
Pricing Agreement with respect to the Designated Securities and the
Subordinated Debentures is concerned, such counsel need express no
opinion as to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights); and
[THE FOLLOWING OPINION SHALL NOT BE REQUIRED IF IT IS PROVIDED BY
SULLIVAN & CROMWELL](viii) Each part of the Registration Statement,
when such part became effective, and the Prospectus, as of its date
(other than the financial statements and other financial data therein,
as to which such counsel need express no opinion), appeared on their
face to be appropriately responsive, in all material respects relevant
to the offering of the Securities, to the requirements of the Act, the
Trust Indenture Act and the applicable rules and regulations of the
Commission thereunder; further, nothing which came to his attention in
the course of his review (as described in such opinion) has caused him
to believe that, insofar as relevant to the offering of the Designated
Securities, any part of the Registration Statement, when such part
became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of its date (other than the financial statements and
other financial data therein, as to which such counsel need express no
opinion), contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; also, nothing that has come to such counsel's attention in
the course of certain procedures (as described in such opinion) has
caused such counsel to believe that the Prospectus, as of the date and
time of delivery of such opinion, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel may state
that he does not assume any responsibility for the
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<PAGE>
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except for those made under
the captions "Description of Junior Subordinated Debentures",
"Description of Preferred Securities", "Description of Guarantees",
"Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures, the Expense Agreement and the Guarantees" and
"Plan of Distribution" in the Prospectus and under the captions
"Certain Terms of Series B Preferred Securities", "Certain Terms of
Series B Subordinated Debentures" and "Underwriting" in the Prospectus
as amended and supplemented insofar as they relate to provisions of
documents therein described and that he does not express any opinion
or belief as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus or as to the
statements of the eligibility of the Trustee.]
(d) Sullivan & Cromwell, special counsel to the Company, shall have
furnished to the Representatives their opinion or opinions, dated each Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(ii) The Subordinated Debentures being issued at such Time of
Delivery have been duly authorized in conformity with the terms of the
Indenture, and when such Subordinated Debentures have been duly
executed, authenticated and issued in conformity with the Indenture
and delivered against payment in accordance with this Agreement will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iii) The Guarantee has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(iv) The Pricing Agreement with respect to the Designated
Securities has been duly authorized, executed and delivered by the
Company;
(v) The Trust is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
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<PAGE>
(vi) The statements set forth in the Prospectus under the
captions "Description of Junior Subordinated Debentures", "Description
of Preferred Securities", "Description of Guarantees" and
"Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures, the Expense Agreement and the Guarantees" and
in the Prospectus as amended or supplemented under the captions
"Certain Terms of Series B Preferred Securities" and "Certain Terms of
Series B Subordinated Debentures" insofar as they purport to
constitute summaries of certain terms of the Designated Securities,
the Subordinated Debentures or the Company Agreements, in each case
constitute accurate summaries of the terms of the Company Agreements
and of such securities, as set forth in the Company Agreements, in all
material respects; and
[THE FOLLOWING OPINION SHALL NOT BE REQUIRED IF IT IS PROVIDED BY
PAUL IMMERMAN](vii) Each part of the Registration Statement, when
such part became effective, and the Prospectus, as of its date (other
than the financial statements and other financial data therein, as to
which such counsel need express no opinion), appeared on their face to
be appropriately responsive, in all material respects relevant to the
offering of the Securities, to the requirements of the Act, the Trust
Indenture Act and the applicable rules and regulations of the
Commission thereunder; further, nothing which came to their attention
in the course of their review (as described in such opinion) has
caused them to believe that, insofar as relevant to the offering of
the Designated Securities, any part of the Registration Statement,
when such part became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date (other than the
financial statements and other financial data therein, as to which
such counsel need express no opinion), contained any untrue statement
of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading; also, nothing that has
come to such counsel's attention in the course of certain procedures
(as described in such opinion) has caused such counsel to believe that
the Prospectus, as of the date and time of delivery of such opinion,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. Such counsel may state that they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
except for those made under the captions "Description of Junior
Subordinated Debentures", "Description of Preferred Securities",
"Description of Guarantees", "Relationship Among the Preferred
Securities, the Corresponding Junior Subordinated Debentures, the
Expense Agreement and the Guarantees" and "Plan of Distribution" in
the Prospectus and under the captions "Certain Terms of Series B
Preferred Securities", "Certain Terms of Series B Subordinated
Debentures" and "Underwriting" in the Prospectus as amended and
supplemented insofar as they relate to provisions of documents therein
described and that they do not express any opinion or belief as to the
financial
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<PAGE>
statements or other financial data contained in the Registration
Statement or the Prospectus or as to the statements of the eligibility
of the Trustee.]
(e) Richards, Layton & Finger, special Delaware Counsel to the
Designated Trust and the Company, shall have furnished to the
Representatives, the Company and the Designated Trust such written opinion
or opinions, dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to you, to the effect that:
(i) The Designated Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act, and all filings required under the laws of the
State of Delaware with respect to the creation and valid existence of
the Designated Trust as a business trust have been made;
(ii) Under the Delaware Business Trust Act and the Trust
Agreement, the Designated Trust has the power and authority to own
property and conduct its business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and legally
binding obligation of the Company and the Trustees, enforceable
against each of the Company and the Trustees, in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(iv) Under the Delaware Business Trust Act and the Trust
Agreement, the Designated Trust has the power and authority to (a)
execute and deliver the Pricing Agreement relating to the Designated
Securities (incorporating by reference the provisions hereof) and to
perform its obligations under such Pricing Agreement, and (b) issue
and perform its obligations under the Designated Securities and the
Common Securities;
(v) Under the Delaware Business Trust Act and the Trust
Agreement, the execution and delivery by the Designated Trust of the
Pricing Agreement relating to the Designated Securities (incorporating
by reference the provisions hereof) and the performance by the
Designated Trust of its obligations thereunder, have been duly
authorized by all necessary action on the part of the Designated
Trust;
(vi) The Designated Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and nonassessable
beneficial interests in the Designated Trust and are entitled to the
benefits provided by the Trust Agreement; the Securityholders, as
beneficial owners of the Designated Trust, will be entitled to the
same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware; provided that such counsel
may note that the Securityholders may be obligated, pursuant to the
Trust
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<PAGE>
Agreement, to (a) provide indemnity and/or security in connection with
and pay taxes or governmental charges arising from transfers or
exchanges of certificates representing the Designated Securities and
the issuance of replacement certificates representing the Designated
Securities and (b) provide security and indemnity in connection with
requests of or directions to the Property Trustee (as defined in the
Trust Agreement) to exercise its rights and remedies under the Trust
Agreement;
(vii) The Common Securities have been duly authorized by the
Trust Agreement and are validly issued and represent beneficial
interests in the Designated Trust;
(viii) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Designated Securities and the Common
Securities is not subject to preemptive rights;
(ix) The issuance and sale by the Designated Trust of Designated
Securities and the Common Securities, the execution and delivery of
the Pricing Agreement (incorporating by reference the provisions
hereof) with respect to the Designated Securities and performance by
the Designated Trust of such Pricing Agreement, the consummation by
the Designated Trust of the transactions contemplated thereby and
compliance by the Designated Trust with its obligations thereunder
will not violate (a) any of the provisions of the Certificate of Trust
of the Designated Trust or the Trust Agreement, or (b) any applicable
Delaware law or administrative regulation;
(x) Assuming that the Designated Trust derives no income from or
connected with services provided within the State of Delaware and has
no assets, activities (other than maintaining the Delaware Trustee and
the filing of documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, no authorization,
approval, consent or order of any Delaware court or governmental
authority or agency is required to be obtained by the Designated Trust
solely in connection with the issuance and sale of the Designated
Securities and the Common Securities. In rendering the opinion
expressed in this paragraph (x), such counsel need express no opinion
concerning the securities laws of the State of Delaware;
(xi) Assuming that the Designated Trust derives no income from or
connected with services provided within the State of Delaware and has
no assets, activities (other than maintaining the Delaware Trustee and
the filing of documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, the Securityholders
(other than those holders of the Designated Securities who reside or
are domiciled in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result of
their participation in the Designated Trust, and the Designated Trust
will not be liable for any income tax imposed by the State of
Delaware;
(f) Sullivan & Cromwell, tax counsel for the Designated Trust and the
Company, shall have furnished to you their written opinion, dated the
respective Time
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<PAGE>
of Delivery, in form and substance satisfactory to you, to the effect that
such firm confirms its opinion set forth in the Prospectus as amended or
supplemented under the caption "Certain Federal Income Tax Consequences";
(g) At each Time of Delivery with respect to the Designated
Securities, Ernst & Young LLP (and/or, if specified in the Pricing
Agreement relating to such Designated Securities, one or more other
independent accountants acceptable to the Representatives) shall have
furnished to you a letter or letters, dated the date of delivery thereof,
in form and substance satisfactory to you, to the effect set forth in Annex
II hereto or as may otherwise be agreed in an additional schedule to the
Pricing Agreement with respect to such Designated Securities;
(h) Since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus as amended and supplemented
with respect to the Designated Securities there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as so amended and supplemented, the effect of which is in the
Representatives' judgment after consultation with the Company so material
and adverse as to make it impractical or inadvisable to proceed with the
public offering of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as so amended and supplemented;
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities, there shall not have occurred any downgrading in the
rating of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating);
(j) On or after the date of the Pricing Agreement relating to the
Designated Securities, there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a general moratorium on commercial
banking activities declared by either Federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this clause
(iii) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Firm
Designated Securities or Optional Designated Securities or both on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented relating to the Designated Securities;
(k) If required by the Pricing Agreement relating to the Designated
Securities, the Designated Securities to be sold by the Designated Trust at
the
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<PAGE>
respective Time of Delivery shall have been duly listed, subject to notice
of issuance, on the New York Stock Exchange; and
(l) The Designated Trust and the Company shall have furnished or
caused to be furnished to the Representatives at each Time of Delivery for
the Designated Securities certificates of officers of the Designated Trust
and the Company satisfactory to the Representatives as to the accuracy of
the representations and warranties of the Designated Trust and the Company
herein at and as of such Time of Delivery, as to the performance by each of
the Designated Trust and the Company of all of its obligations hereunder to
be performed at or prior to such Time of Delivery, as to the matters set
forth in subsections (a) and (h) of this Section and as to such other
matters as the Representatives may reasonably request.
8. (a) The Company and the Designated Trust will, jointly and
severally, indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
may become subject, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company and the Designated Trust
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by any Underwriter of
Designated Securities through the Representative expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company and
the Designated Trust against any losses, claims, damages or liabilities to
which the Company or the Designated Trust may become subject insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated
Securities through the Representatives expressly for use therein; and will
reimburse the Company or the Designated Trust, as the case
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<PAGE>
may be, for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation.
No indemnifying party shall without the prior written consent of the
indemnified party effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is a party and
indemnity has been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Designated Trust on the one hand and the Underwriters of the Designated
Securities on the other from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Designated
Trust on the one hand and the Underwriters of the Designated Securities on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Designated Trust on the
one hand and the Underwriters of the Designated Securities on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Designated Trust
bear to the total compensation
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<PAGE>
received by such Underwriters in connection with the offering of Designated
Securities, in each case as set forth in the footnote to the table on the
cover page of the Prospectus as amended and supplemented with respect to
the Designated Securities. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and the
Designated Trust on the one hand or the Underwriters of the Designated
Securities on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Designated Trust and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter of the Designated
Securities shall be required to contribute any amount in excess of the
amount by which the total price at which the Designated Securities
purchased by it were resold by it as contemplated in the Prospectus exceeds
the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company and the Designated Trust under this
Section 8 shall be in addition to any liability which the Company or the
Designated Trust may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within
the meaning of the Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Designated Securities or the Optional Designated Securities which
it has agreed to purchase under the Pricing Agreement relating to such
Designated Securities, the Representatives may in their discretion arrange
for themselves or another party or other parties to purchase such
Designated Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter the Representatives do not
arrange for the purchase of such Firm Designated Securities or such
Optional Designated Securities, as the case may be, then the Designated
Trust and the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory
to the Representatives to purchase such Designated Securities on such
terms. In the event that, within the respective prescribed period, the
Representatives notify the Designated Trust and the Company
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<PAGE>
that they have so arranged for the purchase of such Designated Securities,
or the Designated Trust and the Company notifies the Representatives that
it has so arranged for the purchase of such Designated Securities, the
Representatives or the Designated Trust and the Company shall have the
right to postpone the Time of Delivery for such Designated Securities for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus
as amended or supplemented, or in any other documents or arrangements, and
the Designated Trust and the Company agree to file promptly any amendments
or supplements to the Registration Statement or the Prospectus which in the
opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in these standard provisions shall include any person
substituted under this Section 9 with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such
Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the
case may be, of a defaulting Underwriter or Underwriters by the
Representatives and the Designated Trust and the Company as provided in
subsection (a) above, the aggregate number of such Designated Securities
which remains unpurchased does not exceed one-eleventh of the aggregate
number of the Firm Designated Securities or Optional Designated Securities,
as the case may be, to be purchased at the respective Time of Delivery,
then the Designated Trust and the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of Firm Designated
Securities or Optional Designated Securities, as the case may be, which
such Underwriter agreed to purchase under the Pricing Agreement relating to
such Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm
Designated Securities or Optional Designated Securities, as the case may
be, which such Underwriter agreed to purchase under such Pricing Agreement)
of the Firm Designated Securities or Optional Designated Securities, as the
case may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the
case may be, of a defaulting Underwriter or Underwriters by the
Representatives and the Designated Trust and the Company as provided in
subsection (a) above, the aggregate number of Firm Designated Securities or
Optional Designated Securities, as the case may be, which remains
unpurchased exceeds one-eleventh of the aggregate number of the Firm
Designated Securities or Optional Designated Securities, as the case may
be, to be purchased at the respective Time of Delivery, as referred to in
subsection (b) above, or if the Designated Trust and the Company shall not
exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Firm Designated Securities or the Over-
allotment Option relating to such Optional Designated Securities, as the
case may be, of a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Firm Designated Securities or the Over-allotment
Option relating to such Optional Designated Securities, as the case may be,
shall thereupon terminate, without liability on the part of any non-
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<PAGE>
defaulting Underwriter, the Designated Trust or the Company, except for the
expenses to be borne by the Designated Trust, the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Designated Trust, the Company and the
several Underwriters, as set forth herein or made by or on behalf of them,
respectively, pursuant hereto, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Designated Trust, the Company, or any officer or director or controlling person
of the Designated Trust or the Company, and shall survive delivery of and
payment for the Designated Securities.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, neither the Designated Trust nor the
Company shall then be under any liability to any Underwriter with respect to the
Firm Designated Securities or Optional Designated Securities covered by such
Pricing Agreement except as provided in Section 6 and Section 8 hereof; but, if
for any other reason, Designated Securities are not delivered by or on behalf of
the Designated Trust as provided herein, the Designated Trust and the Company
will reimburse the Underwriters through the Representatives for all out-of-
pocket expenses, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Designated Trust and the Company
shall then be under no further liability to any Underwriter with respect to such
Designated Securities except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if any,
as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Designated Trust or the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Designated Trust or the Company, as the case may be, set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Designated Trust and the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. Each Pricing Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriters, the Designated Trust and the Company and, to
the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Designated
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<PAGE>
Trust or the Company and each person who controls the Designated Trust, the
Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of any such Pricing Agreement. No purchaser
of any of the Designated Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. Each Pricing Agreement may be executed by any one or more of the
parties thereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.
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<PAGE>
ANNEX I
Pricing Agreement
To the Underwriters named in
Schedule I hereto
c/o [Names and Addresses of Representatives]
________ ___, ____
Dear Sirs:
BNY Capital __________, a statutory business trust formed under the
laws of the State of Delaware (the "Designated Trust") and The Bank of New York
Company, Inc., a New York corporation (the "Company"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement Standard
Provisions (December 1997) (the "Standard Provisions"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the preferred
securities of the Designated Trust specified in Schedule II hereto. The Firm
Designated Securities and any Optional Designated Securities the Underwriters
may elect to purchase are herein referred to as the "Designated Securities."
Each of the provisions of the Standard Provisions is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Pricing
Agreement to the same extent as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Pricing Agreement.
Each reference to the Representatives herein and in the provisions of the
Standard Provisions so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Standard Provisions
are used herein as therein defined. The Representatives designated to act on
behalf of the Representatives and on behalf of each of the Underwriters of the
Designated Securities pursuant to Section 12 of the Standard Provisions and the
address of the Representatives referred to in such Section 12 are set forth at
the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Standard Provisions incorporated herein by reference, (a) the Designated Trust
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of Firm Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto, and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Designated Securities, as provided below, the Designated Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Designated Trust at the
purchase price to the Underwriters set
<PAGE>
forth in Schedule II hereto that portion of the number of Optional Designated
Securities as to which such election shall have been exercised.
The Designated Trust hereby grants to each of the Underwriters the
right to purchase at their election up to the number of Optional Designated
Securities set forth opposite the name of such Underwriter in Schedule I hereto
on the terms referred to in the paragraph above for the sole purpose of covering
over-allotments in the sale of the Firm Designated Securities. Any such
election to purchase Optional Designated Securities may be exercised by written
notice from the Representatives to the Designated Trust and the Company given
within a period of [30] calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Designated Securities to be
purchased and the date on which such Optional Designated Securities are to be
delivered, as determined by the Representatives, but in no event earlier than
the First Time of Delivery or, unless the Representatives, the Company and the
Designated Trust otherwise agree in writing, no earlier than two or later than
ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please sign
and return to us [ten] counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Standard Provisions incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Designated Trust and the Company. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very truly yours,
THE BANK OF NEW YORK COMPANY, INC.
By:____________________________
Name:
Title:
BNY CAPITAL __________
By: The Bank of New York Company,
Inc., as Depositor
By:____________________________
Name:
Title:
Accepted as of the date hereof:
-2-
<PAGE>
[Name(s) of Representative(s)]
As Representatives of the Underwriters
Named in Schedule I hereto
____________________________________
By:_________________________________
Name:
Title:
On behalf of each of the Underwriters
named on Schedule I hereto
-3-
<PAGE>
SCHEDULE I
(TO PRICING AGREEMENT)
Number of
Maximum
Number of Firm Optional
Designated Designated
Securities to Securities to
Underwriter be Purchased be Purchased
----------- ------------- -------------
[Names of Representatives]....
[Name of
Underwriters].......
Total
_____________ ________________
============== ===============
<PAGE>
SCHEDULE II
(TO PRICING AGREEMENT)
DESIGNATED TRUST:
BNY Capital __________
TITLE OF DESIGNATED SECURITIES:
_____% ________________________ Preferred Securities, Series ____
AGGREGATE PRINCIPAL AMOUNT:
[Aggregate liquidation amount] [Number] of Firm Designated
Securities: [$]_________________
Maximum [aggregate liquidation amount] [Number] of Optional
Designated Securities: [$]__________________
INITIAL OFFERING PRICE TO PUBLIC
[$ _____ per Designated Security] [_____% of the principal amount of the
Designated Securities]
PURCHASE PRICE BY UNDERWRITERS:
[$ _____ per Designated Security][_____% of the principal amount of the
Designated Securities]
UNDERWRITERS' COMPENSATION:
$____ per Designated Security
FORM OF DESIGNATED SHARES:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian, to
be made available for checking by the Representatives at least twenty-four
hours prior to the Time of Delivery at the office of DTC.
ACCOUNT FOR PAYMENT OF PURCHASE PRICE:
____________________________________
TRUST AGREEMENT:
Amended and Restated Trust Agreement dated
_______________, between the Company and the
Trustees named therein
GUARANTEE:
<PAGE>
Guarantee Agreement, dated as of ___________________, between Company, as
guarantor, and Guarantee Trustee
SUBORDINATED DEBENTURES:
_____% Junior Subordinated Debentures, Series _____
MATURITY:
INTEREST RATE:
______%
INTEREST PAYMENT DATES:
EXTENSION PERIOD:
[20 quarters]
REDEMPTION PROVISIONS:
SINKING FUND PROVISIONS:
No sinking fund provisions.
[LISTING:
The Company and the Designated Trust shall each use its best efforts
to list, subject to notice of issuance, the Designated Securities on the
New York Stock Exchange and, if the Corporation elects to terminate the
Designated Trust and to distribute the Subordinated Debentures to the
holders of the Designated Securities in liquidation of the Designated
Trust, to use its best efforts to list the Subordinated Debentures, subject
to notice of issuance, on the New York Stock Exchange, prior to such
distribution.]
[ACCOUNTANTS LETTERS:
At each Time of Delivery, [insert relevant provisions, if required]
[FIRST] TIME OF DELIVERY:
9:00 a.m., New York City time _______ __, ____
[SECOND TIME OF DELIVERY:
-2-
<PAGE>
The time and date specified in the notice [delivered/to be delivered] by
the Underwriters pursuant to Section 3 of the Standard Provisions.]
NAMES OF UNDERWRITERS AND NUMBER
OF FIRM DESIGNATED SECURITIES AND
MAXIMUM NUMBER OF OPTIONAL DESIGNATED
SECURITIES TO BE PURCHASED:
As described on Schedule I hereto.
CLOSING LOCATION:
Sullivan & Cromwell
125 Broad Street
New York, New York
NAMES AND ADDRESSES OF REPRESENTATIVES:
-3-
<PAGE>
ANNEX II
Accountants' Letter
Pursuant to Section 7(g) of the Underwriting Agreement Standard
Provisions (December 1997), the Company's independent certified public
accountants shall furnish letters to the effect that:
(i) They are independent public accountants with respect to the Company and
its subsidiaries within the meaning of the Act and the applicable published
rules and regulations thereunder, and the answer to Item 10 of the Registration
Statement is correct insofar as it relates to them;
(ii) In their opinion, the consolidated financial statements, and any
supplementary financial information and schedules examined by them and included
or incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the published
rules and regulations thereunder; and they have made a review of the interim
financial information of the Company and its subsidiaries for the periods
specified in such letter in accordance with standards established by the
American Institute of Certified Public Accountants;
(iii) On the basis of limited procedures, not constituting an audit,
consisting of a limited review of the unaudited consolidated financial
statements and other information referred to below, a reading of the latest
available interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) the unaudited information with respect to the annual consolidated
results of operations and financial position for fiscal years which was included
or incorporated by reference in the Company's Annual Report on Form 10-K for the
most recent fiscal year does not agree with the corresponding amount in the
audited consolidated financial statements for such fiscal years which was
included or incorporated by reference in the Company's Annual Reports on Form
10-K for the last three fiscal years;
(B) the unaudited information with respect to the annual consolidated
results of operations and financial position for such fiscal years which was
included or incorporated by reference in the Prospectus does not agree with the
corresponding amounts in the audited consolidated financial statements for such
fiscal years which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for the last three years;
(C) the unaudited consolidated financial statements included or
incorporated by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Exchange
Act and published rules and regulations thereunder or are not fairly presented
in conformity with generally accepted accounting
<PAGE>
principles applied on a basis substantially consistent with that of the audited
consolidated financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited financial data included in the Prospectus as at any
time, or for any period ending, after the end of the latest interim period
covered by a Quarterly Report on Form 10-Q of the Company do not agree with the
corresponding amounts in the unaudited consolidated financial statements from
which such data are derived;
(E) the unaudited financial data included in the Prospectus do not
agree with the corresponding amounts in the unaudited financial statements which
were not included in the Prospectus but from which were derived such financial
data;
(F) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon conversions
of convertible securities, in each case which were outstanding on the date of
the latest audited financial statements included or incorporated by reference in
the Prospectus) or any increase in the consolidated long-term debt of the
Company and its subsidiaries, or any decreases in consolidated shareholders'
equity or allowance for loan losses, in each case as compared with amounts shown
in the latest consolidated statement of condition included or incorporated by
reference in the Prospectus except in each case for changes which the Prospectus
discloses have occurred or may occur or which are described in such letter; and
(G) for the period from the date of the latest complete consolidated
financial statements included or incorporated by reference in the Prospectus to
the specified date referred to in (F) above there were any decreases in
consolidated net interest income, net interest income after provision for loan
losses, or the total or fully diluted per share amounts of net income of the
Company, in each case as compared with the comparable period of the preceding
year, except in each case for decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
(iv) In addition to the examination referred to in their reports included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
subparagraph (iii) above, they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages and
financial information specified by the Underwriters which are derived from the
general accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference), in exhibits to
the Registration Statement specified by the Underwriters or in documents
incorporated by reference in the Prospectus specified by the Underwriters, and
have compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have found
them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement Standard Provisions (December
1997) as of the date of the letter delivered on the date of the Pricing
Agreement for purposes of such letter and to the
-2-
<PAGE>
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
-3-
<PAGE>
EXHIBIT 5(a)
[Sullivan & Cromwell Letterhead]
December 15, 1997
The Bank of New York Company Inc.,
48 Wall Street,
New York, New York 10286.
Ladies and Gentleman:
In connection with the registration under the Securities Act of 1933 (the
"Act") of $500,000,000 aggregate principal amount of Junior Subordinated
Deferrable Interest Debentures (the "Debt Securities") of The Bank of New York
Company, Inc., a New York corporation (the "Corporation"), $500,000,000
aggregate liquidation amount of Preferred Securities (the "Preferred
Securities") of BNY Capital III, BNY Capital IV and BNY Capital V, each of which
is a Delaware statutory business trust (each, a "Trust"), and the Guarantees
with respect to the Preferred Securities (the "Guarantees") to be executed and
delivered by the Corporation for the benefit of the holders from time to time of
the Preferred Securities, we, as your special counsel,
<PAGE>
The Bank of New York Company Inc., -2-
have examined such corporate records, certificates and other documents, and such
questions of law, as we have considered necessary or appropriate for the
purposes of this opinion.
Upon the basis of such examination, we advise you that, in our opinion,
when:
(i) the Registration Statement (Reg. No. 333-40837) relating to the
Debt Securities, the Preferred Securities and the Guarantees (the
"Registration Statement") has become effective under the Act;
(ii) the Indenture relating to the Debt Securities has been duly
executed and delivered;
(iii) the Guarantee Agreement relating to the Guarantees with respect
to the Preferred Securities of a Trust has been duly executed and
delivered;
(iv) the Amended and Restated Trust Agreement of such Trust has been
duly executed and delivered;
(v) the terms of the Debt Securities and of their issuance and sale
have been duly established in conformity with the Indenture so as not to
violate any applicable law or result in a default under, or breach of, any
agreement or instrument binding upon the Corporation and so as to comply
with any requirement or
<PAGE>
The Bank of New York Company Inc., -3-
restriction imposed by any court or governmental body having jurisdiction
over the Corporation;
(vi) the terms of the Preferred Securities of such Trust and of their
issuance and sale have been duly established in conformity with the Amended
and Restated Trust Agreement of such Trust so as not to violate any
applicable law or result in a default under, or breach of, any agreement or
instrument binding upon such Trust and so as to comply with any requirement
or restriction imposed by any court or governmental body having
jurisdiction over such Trust;
(vii) the Debt Securities have been duly executed and authenticated
in accordance with the Indenture and issued and sold as contemplated in the
Registration Statement; and
(viii) the Preferred Securities have been duly executed and
authenticated in accordance with the Amended and Restated Trust Agreement
of such Trust and issued and sold as contemplated in the Registration
Statement,
the Debt Securities and the Guarantee relating to the Preferred Securities of
such Trust will constitute valid and
<PAGE>
The Bank of New York Company Inc., -4-
legally binding obligations of the Corporation, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
Also, we have relied as to certain matters on information obtained
from public officials, officers of the Corporation and other sources believed by
us to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
Securities" in the Prospectus. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
/s/ Sullivan & Cromwell
<PAGE>
EXHIBIT 5(b)
[LETTERHEAD OF RICHARDS, LAYTON & FINGER, P.A.]
December 15, 1997
BNY Capital III
c/o The Bank of New York Company, Inc.
48 Wall Street
New York, New York 10286
Re: BNY Capital III
---------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Bank of New York
Company, a New York corporation (the "Company"), and BNY Capital III, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of November 6,
1996 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on November 12, 1996;
(b) The Trust Agreement of the Trust, dated as of November 6, 1996,
among the Company, as depositor, John A. Park, III and Robert E. Keilman, as
regular trustees, and First Chicago Delaware Inc., as trustee;
(c) The registration statement (the "Initial Registration Statement")
on Form S-3 (Registration No. 333-40837), filed by the Company, the Trust and
the other registrants listed therein with the Securities and Exchange Commission
(the "SEC") on
<PAGE>
BNY Capital III
December 15, 1997
Page 2
November 21, 1997, as amended by Amendment No. 1 to the Initial Registration
Statement, including a related preliminary prospectus, as supplemented by a
preliminary prospectus supplement (as supplemented, the "Prospectus"), relating
to the Preferred Securities of the Trust representing undivided beneficial
interests in the assets of the Trust (each, a "Preferred Security" and
collectively, the "Preferred Securities"), as proposed to be filed by the
Company, the Trust and the other registrants listed therein with the SEC on or
about December 16, 1997 ("Amendment No. 1") (the Initial Registration Statement,
as amended by Amendment No. 1, is hereinafter referred to as the "Registration
Statement");
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among the Company, as depositor, the trustees of the Trust named
therein, and the several holders, from time to time, of undivided beneficial
interests in the assets of the Trust, attached as an exhibit to the Prospectus
(the "Trust Agreement"); and
(e) A Certificate of Good Standing for the Trust, dated December 15,
1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. we have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties
<PAGE>
BNY Capital III
December 15, 1997
Page 3
to the documents examined by us, (iv) that each of the parties to the documents
examined by us has the power and authority to execute and deliver, and to
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Preferred Security is to be issued by
the Trust (collectively, the "Preferred Security Holders") of a Preferred
Securities Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Trust Agreement and
the Registration Statement, (vii) that the Preferred Securities are issued and
sold to the Preferred Security Holders in accordance with the Trust Agreement
and the Registration Statement, and (viii) that the Delaware Trustee satisfies
the requirements of Section 3807 of the Delaware Business Trust Act, 12 Del. C.
-------
Section 3801, et seq. (the "Act"). We have not participated in the preparation
-- ---
of the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Act.
2. When issued and sold, the Preferred Securities will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Laws of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
<PAGE>
BNY Capital III
December 15, 1997
Page 4
We consent to the filing of this opinion with the SEC as an exhibit to
the Registration Statement. In addition, we hereby consent to the use of our
name under the heading "Validity of Securities" in the Prospectus. In giving the
foregoing consents, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the SEC thereunder. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE>
EXHIBIT 5(c)
[LETTERHEAD OF RICHARDS, LAYTON & FINGERS, P.A.]
December 15, 1997
BNY Capital IV
c/o The Bank of New York Company, Inc.
48 Wall Street
New York, New York 10286
Re: BNY Capital IV
--------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Bank of New York
Company, a New York corporation (the "Company"), and BNY Capital IV, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request this opinion is being furnished to You.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of November 6,
1996 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on November 12, 1996;
(b) The Trust Agreement of the Trust, dated as of November 6, 1996,
among the Company, as depositor, John A. Park, III and Robert E. Keilman, as
regular trustee, and First Chicago Delaware Inc., as trustee:
(c) The registration statement (the "Initial Registration Statement")
on Form S-3 (Registration No. 333-40837, filed by the Company, the Trust and the
other registrants listed therein with the Securities and Exchange Commission
(the "SEC") on
<PAGE>
BNY Capital IV
December 15, 1997
Page 2
November 21, 1997, as amended by Amendment No. 1 to the Initial Registration
Statement, including a related preliminary prospectus, as supplemented by a
preliminary prospectus supplement (as supplemented, the "Prospectus"), relating
to the Preferred Securities of the Trust representing undivided beneficial
interests in the assets of the Trust (each, a "Preferred Security" and
collectively, the "Preferred Securities"), as proposed to be filed by the
Company, the Trust and the other registrants listed therein with the SEC on or
about December 16, 1997 ("Amendment No. 1") (the Initial Registration Statement,
as amended by Amendment No. l, is hereinafter referred to as the "Registration
Statement");
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among the Company, as depositor, the trustees of the Trust named
therein, and the several holders, from time to time, of undivided beneficial
interests in the assets of the Trust, attached as an exhibit to the Prospectus
(the "Trust Agreement"); and
(e) A Certificate of Good Standing for the Trust, dated December 15,
1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust Agreement
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Trust Agreement and the Certificates are
in full force and effect and have not been amended, (ii) except to the extent
provided in paragraph 1 below, the due creation or due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties
<PAGE>
BNY Capital IV
December 15, 1997
Page 3
to the documents examined by us, (iv) that each of the parties to the documents
examined by us has the power and authority to execute and deliver, and to
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Preferred Security is to be issued by
the Trust (collectively, the "Preferred Security Holders") of a Preferred
Securities Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Trust Agreement and
the Registration Statement, (vii) that the Preferred Securities are issued and
sold to the Preferred Security Holders in accordance with the Trust Agreement
and the Registration Statement, and (viii) that the Delaware Trustee satisfies
the requirements of Section 3807 of the Delaware Business Trust Act, 12 Del. C.
-------
Section 3801, et seq. (the "Act"). We have not participated in the preparation
-- ---
of the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Act.
2. When issued and sold, the Preferred Securities will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
<PAGE>
BNY Capital IV
December 15, 1997
Page 4
We consent to the filing of this opinion with the SEC as an exhibit to
the Registration Statement. In addition, we hereby consent to the use of our
name under the heading "Validity of Securities" in the Prospectus. In giving the
foregoing consents, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the SEC thereunder. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE>
EXHIBIT 5(d)
December 15, 1997
BNY Capital V
c/o The Bank of New York Company, Inc.
48 Wall Street
New York, New York 10286
Re: BNY Capital V
-------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Bank of New York
Company, a New York corporation (the "Company"), and BNY Capital V, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of November 6,
1996 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on November 12, 1996;
(b) The Trust Agreement of the Trust, dated as of November 6, 1996,
among the Company, as depositor, John A. Park, III and Robert E. Keilman, as
regular trustees, and First Chicago Delaware Inc., as trustee;
(c) The registration statement (the "Initial Registration Statement")
on Form S-3 (Registration No. 333-40837), filed by the Company, the Trust and
the other registrants listed therein with the Securities and Exchange Commission
(the "SEC") on
<PAGE>
BNY Capital V
December 15, 1997
Page 2
November 21, 1997, as amended by Amendment No. 1 to the Initial Registration
Statement, including a related preliminary prospectus, as supplemented by a
preliminary prospectus supplement (as supplemented, the "Prospectus"), relating
to the Preferred Securities of the Trust representing undivided beneficial
interests in the assets of the Trust (each, a "Preferred Security" and
collectively, the "Preferred Securities"), as proposed to be filed by the
Company, the Trust and the other registrants listed therein with the SEC on or
about December 16, 1997 ("Amendment No. 1") (the Initial Registration Statement,
as amended by Amendment No. 1, is hereinafter referred to as the "Registration
Statement");
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among the Company, as depositor, the trustees of the Trust named
therein, and the several holders, from time to time, of undivided beneficial
interests in the assets of the Trust, attached as an exhibit to the Prospectus
(the "Trust Agreement"); and
(e) A Certificate of Good Standing for the Trust, dated December 15,
1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties
<PAGE>
BNY Capital V
December 15, 1997
Page 3
to the documents examined by us, (iv) that each of the parties to the documents
examined by us has the power and authority to execute and deliver, and to
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Preferred Security is to be issued by
the Trust (collectively, the "Preferred Security Holders") of a Preferred
Securities Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Trust Agreement and
the Registration Statement, (vii) that the Preferred Securities are issued and
sold to the Preferred Security Holders in accordance with the Trust Agreement
and the Registration Statement, and (viii) that the Delaware Trustee satisfies
the requirements of Section 3807 of the Delaware Business Trust Act, 12 Del. C.
-------
Section 3801, et seq. (the "Act"). We have not participated in the preparation
-- ---
of the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Act.
2. When issued and sold, the Preferred Securities will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
<PAGE>
BNY Capital V
December 15, 1997
Page 4
We consent to the filing of this opinion with the SEC as an exhibit to
the Registration Statement. In addition, we hereby consent to the use of our
name under the heading "Validity of Securities" in the Prospectus. In giving the
foregoing consents, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the SEC thereunder. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE>
EXHIBIT 8
[Sullivan & Cromwell Letterhead]
December 15, 1997
The Bank of New York Company, Inc.,
48 Wall Street
New York, New York 10286.
Ladies and Gentlemen:
As special tax counsel to BNY Capital III, BNY Capital IV, BNY Capital
V (each a "Trust"), and The Bank of New York Company, Inc. in connection with
the issuance of Preferred Securities of the Trusts (the "Securities"), and
assuming that the operative documents for the Securities described in the
Prospectus and the Prospectus Supplement to which this opinion is filed as an
exhibit (the "Registration Statement") will be performed in accordance with the
terms described therein, we hereby confirm to you our opinion as set forth under
the heading "Certain Federal Income Tax Consequences" in the Prospectus
Supplement, subject to the limitations set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to us under the heading "Certain
Federal Income Tax Consequences" in the Registration Statement. By giving the
foregoing consent, we do not admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Sullivan & Cromwell
