<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION STATEMENT NOS.
333-15559 AND 333-15559-04
PROSPECTUS SUPPLEMENT
- ---------------------
(TO PROSPECTUS DATED DECEMBER 5, 1996)
14,000,000 PREFERRED SECURITIES
BANKAMERICA CAPITAL IV
7% TRUST ORIGINATED PREFERRED SECURITIES,/(SM)/
SERIES 4 ("TOPrS/(SM)/")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
BANKAMERICA CORPORATION
--------------
The 7% Trust Originated Preferred Securities, Series 4 (the "Series 4
Preferred Securities"), offered hereby represent beneficial interests in
BankAmerica Capital IV, a trust created under the laws of the State of
Delaware (the "Series 4 Issuer Trust"). BankAmerica Corporation, a Delaware
corporation (the "Corporation"), will be the owner of all of the beneficial
interests represented by common securities of the Series 4 Issuer Trust
("Series 4 Common Securities" and, collectively with the Series 4 Preferred
Securities, the "Series 4 Securities"). Bankers Trust Company is the Property
Trustee of the Series 4
-------------- (Continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE S-4 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES 4 PREFERRED SECURITIES.
--------------
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF
ANY BANK OR ANY NONBANK SUBSIDIARY OF THE CORPORATION AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY
OTHER GOVERNMENTAL AGENCY.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE 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 4
OFFERING PRICE(1) COMMISSION(2) ISSUER TRUST(3)(4)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Preferred Security....... $25.00 (3) $25.00
- --------------------------------------------------------------------------------
Total........................ $350,000,000 (3) $350,000,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued Distributions, if any, from February 24, 1998.
(2) The Series 4 Issuer Trust 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."
(3) In view of the fact that the proceeds of the sale of the Series 4
Preferred Securities will be invested in the Series 4 Subordinated
Debentures, the Corporation has agreed to pay to the Underwriters as
compensation ("Underwriters' Compensation") for their arranging the
investment therein of such proceeds $.7875 per Series 4 Preferred Security
or $.25 per Series 4 Preferred Security with respect to Series 4 Preferred
Securities that have been initially allocated for sale to certain
institutions. Based on such initial allocation, the estimated aggregate
Underwriters' Compensation is $10,939,000. The actual aggregate
Underwriters' Compensation will depend on the number of Series 4 Preferred
Securities that are actually sold to institutions, which may be greater or
less than the initial allocation. See "Underwriting."
(4) Expenses of the offering, which are payable by the Corporation, are
estimated to be $350,000.
--------------
This Prospectus Supplement and the related Prospectus may be used by
BancAmerica Robertson Stephens, an affiliate of the Corporation and the Series
4 Issuer Trust, in connection with offers and sales related to secondary
market transactions in the Series 4 Preferred Securities. BancAmerica
Robertson Stephens may act as principal or agent in such transactions. Such
sales will be made at prices related to prevailing market prices at the time
of sale or otherwise.
The Series 4 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 4 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 February 24, 1998, against payment therefor in
immediately available funds.
--------------
MERRILL LYNCH & CO. BANCAMERICA ROBERTSON STEPHENS
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
--------------
The date of this Prospectus Supplement is February 19, 1998.
- -------
(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SERIES 4
PREFERRED SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS AND
COVERING TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
----------------
(cover page continued)
Issuer Trust. The Series 4 Issuer Trust exists for the sole purpose of issuing
the Series 4 Securities and investing the proceeds thereof in 7% Junior
Subordinated Deferrable Interest Debentures, Series 4 (the "Series 4
Subordinated Debentures"), to be issued by the Corporation. The Series 4
Subordinated Debentures will mature on March 31, 2028, which date may be (i)
shortened to a date not earlier than February 24, 2003 or (ii) extended to a
date not later than March 31, 2047, in each case if certain conditions are met
(including, in the case of a shortening of the Stated Maturity (as defined
herein), the Corporation having received prior approval of the Board of
Governors of the Federal Reserve System (the "Federal Reserve") to do so if
then required under applicable capital guidelines or policies of the Federal
Reserve). The Series 4 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 4 Common Securities.
See "Description of Preferred Securities--Subordination of Common Securities"
in the accompanying Prospectus.
Holders of the Series 4 Preferred Securities will be entitled to receive
preferential cumulative cash distributions accumulating 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 March 31, 1998, at the
annual rate of 7% of the Liquidation Amount of $25 per Series 4 Preferred
Security ("Distributions"). The Distribution on March 31, 1998 will be $.17986
per Series 4 Preferred Security. The Corporation has the right to defer
payment of interest on the Series 4 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 4
Subordinated Debentures. Upon the termination of any such Extension Period and
the payment of all amounts then due, the Corporation may elect to begin a new
Extension Period subject to the requirements set forth herein. If interest
payments on the Series 4 Subordinated Debentures are so deferred,
Distributions on the Series 4 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 of the Corporation that rank
pari passu in all respects with or junior to the Series 4 Subordinated
Debentures. During an Extension Period, interest on the Series 4 Subordinated
Debentures will continue to accrue (and the amount of Distributions to which
holders of the Series 4 Preferred Securities are entitled will accumulate) at
the rate of 7% per annum, compounded quarterly, and holders of Series 4
Preferred Securities will be required to accrue interest income for United
States federal income tax purposes. See "Certain Terms of Series 4
Subordinated Debentures--Option to Extend Interest Payment Period" and
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount."
The Corporation has, through the Series 4 Guarantee, the Trust Agreement,
the Series 4 Subordinated Debentures, the Junior Subordinated Indenture and
the Expense Agreement (each as defined herein), taken together, fully,
irrevocably and unconditionally guaranteed all of the Series 4 Issuer Trust's
obligations under the Series 4 Preferred Securities. See "Relationship Among
the Preferred Securities, the Corresponding Junior Subordinated Debentures and
the Guarantees--Full and Unconditional Guarantee" in the accompanying
Prospectus. The Series 4 Guarantee of the Corporation guarantees the payment
of Distributions and payments on liquidation or redemption of the Series 4
Preferred Securities, but only in each case to the extent of funds held by the
Series 4 Issuer Trust, as described herein (the "Series 4 Guarantee"). See
"Description of Guarantees" in the accompanying Prospectus. If the Corporation
does not make interest payments on the Series 4 Subordinated Debentures held
by the Series 4 Issuer Trust, the Series 4 Issuer Trust will have insufficient
funds to pay Distributions on the Series 4 Preferred Securities. The Series 4
Guarantee does not cover payment of Distributions when the Series 4 Issuer
Trust does not have sufficient funds to pay such Distributions. In such event,
a holder of Series 4 Preferred Securities may institute a legal proceeding
directly against the Corporation to enforce payment of such Distributions to
such holder. See "Description
S-2
<PAGE>
(cover page continued)
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 4 Guarantee are subordinate and junior in
right of payment to all Senior Indebtedness (as defined in "Description of
Junior Subordinated Debentures--Subordination" in the accompanying Prospectus)
of the Corporation.
The Series 4 Preferred Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series 4 Subordinated Debentures at
their Stated Maturity or their earlier redemption. Subject to the Corporation
having received prior approval of the Federal Reserve to do so if then
required under applicable capital guidelines or policies of the Federal
Reserve, the Series 4 Subordinated Debentures are redeemable prior to their
Stated Maturity at the option of the Corporation (i) on or after February 24,
2003, in whole at any time or in part from time to time, or (ii) in whole (but
not in part) prior to February 24, 2003 and within 90 days following the
occurrence of a Tax Event or Capital Treatment Event (each as defined herein),
in each case at a price equal to 100% of the principal amount of the Series 4
Subordinated Debentures so redeemed plus the accrued and unpaid interest on
the Series 4 Subordinated Debentures so redeemed to the date fixed for
redemption. See "Certain Terms of Series 4 Preferred Securities--Redemption."
The Corporation will have the right at any time to terminate the Series 4
Issuer Trust and, after satisfaction of liabilities to creditors of the Series
4 Issuer Trust as required by applicable law, cause the Series 4 Subordinated
Debentures to be distributed to the holders of the Series 4 Securities in
liquidation of the Series 4 Issuer Trust, subject to the Corporation having
received prior approval of the Federal Reserve to do so if then required under
applicable capital guidelines or policies of the Federal Reserve. See "Certain
Terms of Series 4 Preferred Securities--Liquidation of Series 4 Issuer Trust
and Distribution of Series 4 Subordinated Debentures to Holders."
The Series 4 Subordinated Debentures are unsecured and subordinated to all
Senior Indebtedness. See "Risk Factors--Ranking of Subordinated Obligations
Under the Series 4 Guarantee and the Series 4 Subordinated Debentures."
In the event of the termination of the Series 4 Issuer Trust, after
satisfaction of liabilities to creditors of the Series 4 Issuer Trust as
required by applicable law, the holders of the Series 4 Preferred Securities
will be entitled to receive a Liquidation Amount of $25 per Series 4 Preferred
Security 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 4
Subordinated Debentures, subject to certain exceptions. See "Description of
Preferred Securities--Liquidation Distribution Upon Termination" in the
accompanying Prospectus.
The Series 4 Preferred Securities have been approved for listing on the New
York Stock Exchange under the symbol "BAC PrY," subject to notice of issuance.
Trading of the Series 4 Preferred Securities on the New York Stock Exchange is
expected to commence within a 30-day period after the initial delivery of the
Series 4 Preferred Securities. If the Series 4 Subordinated Debentures are
distributed to the holders of Series 4 Preferred Securities upon the
liquidation of the Series 4 Issuer Trust, the Corporation will use its best
efforts to list the Series 4 Subordinated Debentures on the New York Stock
Exchange or such other stock exchanges or other automated quotation systems,
if any, on which the Series 4 Preferred Securities are then listed or traded.
The Series 4 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 4 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 4 Preferred Securities in certificated form will not be issued in
exchange for the global certificates. See "Book-Entry Issuance" in the
accompanying Prospectus.
S-3
<PAGE>
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 "Junior Subordinated Indenture" means the Junior
Subordinated Indenture, as amended and supplemented from time to time, between
the Corporation and Bankers Trust Company, as trustee (the "Debenture
Trustee"), and (ii) the "Trust Agreement" means the Amended and Restated Trust
Agreement relating to the Series 4 Issuer Trust among the Corporation, as
Depositor, Bankers Trust Company, as Property Trustee (the "Property
Trustee"), Bankers Trust (Delaware), 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.
RISK FACTORS
Prospective purchasers of the Series 4 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.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES 4 GUARANTEE AND THE
SERIES 4 SUBORDINATED DEBENTURES
The obligations of the Corporation under the Series 4 Guarantee issued by
the Corporation for the benefit of the holders of Series 4 Preferred
Securities and under the Series 4 Subordinated Debentures are subordinate and
junior in right of payment to all Senior Indebtedness of the Corporation. At
December 31, 1997, the aggregate outstanding Senior Indebtedness of the
Corporation was approximately $14.5 billion. Because the Corporation is a
holding company, the right of the Corporation to participate in any
distribution of assets of any subsidiary, including Bank of America National
Trust and Savings Association, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Series 4
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. In
addition, there are also various legal limitations on the extent to which the
Corporation's depository subsidiaries may extend credit, pay dividends or
otherwise supply funds to the Corporation or various of its affiliates.
Accordingly, the Series 4 Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Series 4 Subordinated Debentures and the Series 4
Guarantee should look only to the assets of the Corporation for payments on
the Series 4 Subordinated Debentures and the Series 4 Guarantee. See
"BankAmerica Corporation." None of the Junior Subordinated Indenture, the
Series 4 Guarantee or the Trust Agreement places any limitation on the amount
of secured or unsecured debt, including Senior Indebtedness, 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 4 Issuer Trust to pay amounts due on the Series 4
Preferred Securities is solely dependent upon the Corporation making payments
on the Series 4 Subordinated Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Event of Default under the Junior Subordinated Indenture has
occurred or is continuing, the Corporation has the right under the Junior
Subordinated Indenture to defer the payment of interest on the Series 4
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
S-4
<PAGE>
Period may extend beyond the Stated Maturity of the Series 4 Subordinated
Debentures. As a consequence of any such deferral, quarterly Distributions on
the Series 4 Preferred Securities by the Series 4 Issuer Trust will be
deferred (and the amount of Distributions to which holders of the Series 4
Preferred Securities are entitled will accumulate additional Distributions
thereon at the rate of 7% 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, and may 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, (ii) make any payment
of principal, 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 4 Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation if such guarantee ranks pari passu with or
junior in interest to the Series 4 Subordinated Debentures (other than (a)
dividends or distributions in common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under any Guarantee or under any similar guarantee and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's (including its subsidiaries') benefit plans for
their directors, officers or employees). 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 4 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 7%,
compounded quarterly, 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 4 Preferred Securities--Distributions" and "Certain Terms of Series 4
Subordinated Debentures--Option to Extend Interest Payment Period."
Should an Extension Period occur, a holder of Series 4 Preferred Securities
will continue to accrue income (in the form of original issue discount, which
will include both stated interest and any de minimis original issue discount
on the Series 4 Subordinated Debentures) in respect of its pro rata share of
the Series 4 Subordinated Debentures held by the Series 4 Issuer Trust for
United States federal income tax purposes. As a result, a holder of Series 4
Preferred Securities will include such income in gross income for United
States federal income tax purposes in advance of the receipt of cash, and will
not receive the cash related to such income from the Series 4 Issuer Trust if
the holder disposes of the Series 4 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 "--Sales or
Redemption of Series 4 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 4
Subordinated Debentures. However, should the Corporation elect to exercise
such right in the future, the market price of the Series 4 Preferred
Securities is likely to be affected. A holder that disposes of its Series 4
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 4 Preferred Securities. In addition, as a result of the existence of
the Corporation's right to defer interest payments, the market price of the
Series 4 Preferred Securities (which represent preferred beneficial interests
in the Series 4 Issuer Trust) may be more volatile than the market prices of
other securities on which original issue discount accrues that are not subject
to such deferrals.
S-5
<PAGE>
TAX EVENT OR CAPITAL TREATMENT EVENT REDEMPTION
Upon the occurrence and during the continuation of a Tax Event or Capital
Treatment Event, the Corporation has the right to redeem the Series 4
Subordinated Debentures in whole (but not in part) prior to February 24, 2003
and within 90 days following the occurrence of such Tax Event or Capital
Treatment Event and therefore cause a mandatory redemption of the Series 4
Preferred Securities. Any such redemption shall be at a price equal to the
principal amount of the Series 4 Subordinated Debentures, together with
accrued interest to but excluding the date fixed for redemption. The exercise
of such right is subject to the Corporation having received prior approval of
the Federal Reserve to do so if then required under applicable capital
guidelines or policies of the Federal Reserve.
A "Tax Event" means the receipt by the Series 4 Issuer Trust of an opinion
of counsel to the Corporation 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 the Series 4 Preferred Securities under the Trust
Agreement, there is more than an insubstantial risk that (i) the Series 4
Issuer Trust 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 4 Subordinated Debentures, (ii) interest payable by the
Corporation on the Series 4 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 4
Issuer Trust 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 the occurrence 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 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 Series 4
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 Liquidation Amount of the Series 4 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.
EXCHANGE OF SERIES 4 SECURITIES FOR SERIES 4 SUBORDINATED DEBENTURES
The Corporation will have the right at any time to terminate the Series 4
Issuer Trust and after satisfaction of the liabilities of creditors of the
Series 4 Issuer Trust as provided by applicable law cause the Series 4
Subordinated Debentures to be distributed to the holders of the Series 4
Securities in liquidation of the Series 4 Issuer Trust. The exercise of such
right is subject to the Corporation having received prior approval of the
Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve. See "Certain Terms of Series 4 Preferred
Securities--Liquidation of Series 4 Issuer Trust and Distribution of Series 4
Subordinated Debentures to Holders."
EXTENSION OF STATED MATURITY OF SERIES 4 SUBORDINATED DEBENTURES
The Corporation will also have the right to extend the maturity of the
Series 4 Subordinated Debentures, whether or not the Series 4 Issuer Trust is
terminated and the Series 4 Subordinated Debentures are distributed to holders
of the Series 4 Preferred Securities, to a date no later than March 31, 2047,
provided that the Corporation can extend the maturity only if at the time such
S-6
<PAGE>
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 4
Subordinated Debentures, (iii) the Series 4 Issuer Trust is not in arrears on
payments of Distributions on the Series 4 Preferred Securities and no deferred
Distributions are accumulated and (iv) the Series 4 Subordinated Debentures
are rated not less than BBB- by Standard & Poor's Ratings Services or Baa3 by
Moody's Investors Service, Inc. or the equivalent by any other nationally
recognized statistical rating organization.
MARKET PRICES
There can be no assurance as to the market prices for Series 4 Preferred
Securities or Series 4 Subordinated Debentures that may be distributed in
exchange for Series 4 Preferred Securities if a liquidation of the Series 4
Issuer Trust occurs. Accordingly, the Series 4 Preferred Securities that an
investor may purchase, whether pursuant to the offer made hereby or in the
secondary market, or the Series 4 Subordinated Debentures that a holder of
Series 4 Preferred Securities may receive on liquidation of the Series 4
Issuer Trust, may trade at a discount to the price that the investor paid to
purchase the Series 4 Preferred Securities offered hereby. In addition,
because the Corporation has the right (i) to shorten the Stated Maturity of
the Series 4 Subordinated Debentures (subject to prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of
the Federal Reserve) or (ii) to extend the maturity of the Series 4
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 4 Subordinated Debentures as permitted by the terms
thereof and of the Junior Subordinated Indenture. Because holders of Series 4
Preferred Securities may receive Series 4 Subordinated Debentures on
termination of the Series 4 Issuer Trust, prospective purchasers of Series 4
Preferred Securities are also making an investment decision with regard to the
Series 4 Subordinated Debentures and should carefully review all the
information regarding the Series 4 Subordinated Debentures contained herein.
See "Certain Terms of the Series 4 Subordinated Debentures" in this Prospectus
Supplement and "Description of Junior Subordinated Debentures--Corresponding
Junior Subordinated Debentures" in the accompanying Prospectus.
RIGHTS UNDER THE SERIES 4 GUARANTEE
The Series 4 Guarantee will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Bankers Trust
Company will act as the indenture trustee under the Series 4 Guarantee (the
"Guarantee Trustee") for the purposes of compliance with the Trust Indenture
Act and will hold the Series 4 Guarantee for the benefit of the holders of the
Series 4 Preferred Securities. Bankers Trust Company will also act as
Debenture Trustee for the Series 4 Subordinated Debentures and as Property
Trustee and Bankers Trust (Delaware) will act as Delaware Trustee under the
Trust Agreement. The Series 4 Guarantee guarantees to the holders of the
Series 4 Preferred Securities the following payments, to the extent not paid
by the Series 4 Issuer Trust: (i) any accrued and unpaid Distributions
required to be paid on the Series 4 Preferred Securities, to the extent that
the Series 4 Issuer Trust has funds on hand available therefor at such time,
(ii) the Redemption Price with respect to any Series 4 Preferred Securities
called for redemption, to the extent that the Series 4 Issuer Trust has funds
on hand available therefor at such time and (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Series 4 Issuer
Trust (unless the Series 4 Subordinated Debentures are distributed to holders
of the Series 4 Preferred Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accrued and unpaid Distributions to the date of
payment to the extent that the Series 4 Issuer Trust has funds on hand
available therefor at such time and (b) the amount of assets of the Series 4
Issuer Trust remaining available for distribution to holders of the Series 4
Preferred Securities on liquidation of the Series 4 Issuer Trust. The Series 4
Guarantee is subordinate as described under "--Ranking of Subordinated
Obligations Under the Series 4 Guarantee and the Series 4 Subordinated
Debentures." The holders of not less than a majority in
S-7
<PAGE>
aggregate Liquidation Amount of the Series 4 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 the Series 4
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee under the Series 4 Guarantee. Any holder of the Series 4
Preferred Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Series 4 Guarantee without first
instituting a legal proceeding against the Series 4 Issuer Trust, 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 4
Subordinated Debentures, the Series 4 Issuer Trust would lack funds for the
payment of Distributions or amounts payable on redemption of the Series 4
Preferred Securities or otherwise, and, in such event, holders of the Series 4
Preferred Securities would not be able to rely upon the Series 4 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 4
Subordinated Debentures on the payment date on which such payment is due and
payable, then a holder of Series 4 Preferred 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 4 Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Series 4 Preferred Securities of such holder (a "Direct Action"). In
connection with such Direct Action, the Corporation will have a right of set-
off under the Junior Subordinated Indenture to the extent of any payment made
by the Corporation to such holder of Series 4 Preferred Securities in the
Direct Action. Except as described herein, holders of Series 4 Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Series 4 Subordinated Debentures or assert directly any
other rights in respect of the Series 4 Subordinated Debentures. See
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights
by Holders of Preferred Securities," "--Debenture Events of Default" and
"Description of Guarantees" in the accompanying Prospectus. The Trust
Agreement provides that each holder of Series 4 Preferred Securities by
acceptance thereof agrees to the provisions of the Series 4 Guarantee and the
Junior Subordinated Indenture.
LIMITED VOTING RIGHTS
Holders of Series 4 Preferred Securities will generally have limited voting
rights relating only to the modification of the Series 4 Preferred Securities
and the exercise of the Series 4 Issuer Trust's rights as holder of Series 4
Subordinated Debentures and the Series 4 Guarantee. Holders of Series 4
Preferred Securities will not be entitled to vote to appoint, remove or
replace the Property Trustee or the Delaware Trustee, and such voting rights
are vested exclusively in the holder of the Series 4 Common Securities except
upon the occurrence of certain events described herein. The Property Trustee,
the Administrative Trustees and the Corporation may amend the Trust Agreement
without the consent of holders of Series 4 Preferred Securities to ensure that
the Series 4 Issuer Trust will be classified for United States federal income
tax purposes as a grantor trust unless such action materially and 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 4 PREFERRED SECURITIES
The Series 4 Preferred Securities have been approved for listing on the New
York Stock Exchange, subject to notice of issuance. Trading of the Series 4
Preferred Securities on the New York Stock Exchange is expected to commence
within a 30-day period after the initial delivery of the Series 4 Preferred
Securities. The Series 4 Preferred Securities may trade at prices that do not
fully reflect the value of accrued but unpaid interest with respect to the
underlying Series 4 Subordinated Debentures. A holder of Series 4 Preferred
Securities that disposes of its Series 4 Preferred Securities could recognize
S-8
<PAGE>
a capital loss even though the total selling price exceeds the holder's
purchase price. 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--Sales or Redemption of
Series 4 Preferred Securities."
POSSIBLE TAX LAW CHANGES AFFECTING THE SERIES 4 PREFERRED SECURITIES
Under current law, the Corporation will be able to deduct interest on the
Series 4 Subordinated Debentures. There can be no assurance, however, that
future legislation will not affect the ability of the Corporation to deduct
interest on the Series 4 Subordinated Debentures. Such a change could give
rise to a Tax Event, which may permit the Corporation, upon approval of the
Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve, to cause a redemption of the Series 4
Preferred Securities before, as well as on or after, February 24, 2003. See
"Certain Terms of Series 4 Subordinated Debentures--Redemption" in this
Prospectus Supplement and "Description of Preferred Securities--Redemption" in
the accompanying Prospectus. See also "Certain Federal Income Tax
Consequences--Possible Tax Law Changes."
BANKAMERICA CAPITAL IV
BankAmerica Capital IV is a statutory business trust created under Delaware
law pursuant to (i) the Trust Agreement executed by the Corporation, as
Depositor, Bankers Trust Company, as Property Trustee, Bankers Trust
(Delaware), 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 4, 1996. The Series 4 Issuer Trust's business
and affairs are conducted by the Issuer Trustees: Bankers Trust Company, as
Property Trustee, and Bankers Trust (Delaware), as Delaware Trustee, and three
individual Administrative Trustees who are employees or officers of or
affiliated with the Corporation. The Series 4 Issuer Trust exists for the
exclusive purposes of (i) issuing and selling the Series 4 Securities,
(ii) using the proceeds from the sale of Series 4 Securities to acquire Series
4 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 4 Securities). Accordingly, the Series 4
Subordinated Debentures will be the sole assets of the Series 4 Issuer Trust.
In addition, the Corporation has entered into an Expense Agreement with the
Series 4 Issuer Trust obligating the Corporation to pay any costs, expenses or
liabilities of the Series 4 Issuer Trust, other than obligations of the Series
4 Issuer Trust to pay amounts due pursuant to the terms of the Series 4
Preferred Securities. Payments under the Series 4 Subordinated Debentures and
the related Expense Agreement will be the sole revenue of the Series 4 Issuer
Trust. All of the Series 4 Common Securities will be owned by the Corporation.
The Series 4 Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Series 4 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 Junior Subordinated Indenture,
the rights of the Corporation as holder of the Series 4 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 4
Preferred Securities. See "Description of Preferred Securities--Subordination
of Common Securities" in the accompanying Prospectus. The Corporation will
acquire Series 4 Common Securities in an aggregate liquidation amount equal to
3% of the total capital of the Series 4 Issuer Trust. The Series 4 Issuer
Trust has a term of 55 years, but may terminate earlier as provided in the
Trust Agreement. The principal executive office of the Series 4 Issuer Trust
is 555 California Street, San Francisco, California 94104, Attention:
Secretary, and its telephone number is (415) 622-3530. See "The Issuer Trusts"
in the accompanying Prospectus.
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<PAGE>
BANKAMERICA CORPORATION
The Corporation is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"), and was incorporated in the
State of Delaware in 1968. The Corporation is the second largest bank holding
company in the United States based upon total market capitalization of $50.2
billion at December 31, 1997.
The Corporation's largest subsidiary, based on total assets, is Bank of
America National Trust and Savings Association ("Bank of America"). Bank of
America became a subsidiary of the Corporation in 1969. Bank of America began
business in San Francisco, California, as Bank of Italy in 1904 and adopted
its present name in 1930.
The Corporation, through its network of subsidiaries, provides banking and
other financial services throughout the United States and in selected
international markets to consumers and business customers, including
corporations, governments and other institutions.
The Corporation's principal executive offices are located at 555 California
Street, San Francisco, California 94104 (telephone (415) 622-3530).
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Corporation including its
consolidated subsidiaries is computed by dividing earnings by fixed charges.
Earnings consist primarily of income (loss) before income taxes adjusted for
fixed charges. Fixed charges consist primarily of interest expense on short-
and long-term borrowings and one-third (the portion deemed representative of
the interest factor) of net rents under long-term leases.
The following table sets forth the ratio of earnings to fixed charges for
the Corporation and its consolidated subsidiaries for the periods indicated
and reflects the effects of the merger of Continental Bank Corporation with
and into the Corporation subsequent to its consummation on August 31, 1994.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES
Excluding interest on deposits......................... 2.62 2.67 2.77 3.26 3.55
Including interest on deposits......................... 1.58 1.58 1.61 1.74 1.79
</TABLE>
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<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of December 31, 1997 and as adjusted to
give effect to the consummation of the offering of the Series 4 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 in the accompanying Prospectus by reference.
<TABLE>
<CAPTION>
DECEMBER 31,
1997
-----------------
AS
ACTUAL ADJUSTED
(DOLLAR AMOUNTS IN MILLIONS) ------- --------
<S> <C> <C>
Long-Term Debt:
Senior Debt
The Corporation............................................. $ 5,516 $ 5,516
Subsidiary obligations...................................... 564 564
------- -------
6,080 6,080
------- -------
Subordinated Debt
The Corporation............................................. 7,048 7,048
Subsidiary obligations...................................... 441 441
------- -------
7,489 7,489
------- -------
Total Long-Term Debt...................................... 13,569 13,569
------- -------
Subordinated Capital Notes(a)................................. 353 353
------- -------
Corporation Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Solely Junior
Subordinated Deferrable Interest Debentures of the
Corporation(b)............................................... 1,900 2,250
Preferred Stock (authorized: 70,000,000 shares; issued:
8,724,100 shares)............................................ 614 614
------- -------
Common Stockholders' Equity:
Common stock, par value $1.5625 (authorized: 1,400,000,000
shares; issued: 774,697,520 shares)........................ 1,210 1,210
Additional paid-in capital.................................. 7,974 7,974
Retained earnings........................................... 13,726 13,726
Net unrealized gain on available-for-sale securities........ 137 137
Common stock in treasury, at cost (86,640,661 shares)....... (3,824) (3,824)
------- -------
Total Common Stockholders' Equity......................... 19,223 19,223
------- -------
Total Capitalization of the Corporation(c)............... $35,659 $36,009
======= =======
</TABLE>
- --------
(a) Issuances of common and preferred stock of $350 million have been
dedicated to retire or redeem subordinated capital notes.
(b) The Series 4 Preferred Securities are issued by the Series 4 Issuer Trust.
The sole assets of the Series 4 Issuer Trust consist of $360,824,750
principal amount of Series 4 Subordinated Debentures issued by the
Corporation to the Series 4 Issuer Trust. The Series 4 Subordinated
Debentures will bear interest at the rate of 7% per annum and will mature
on March 31, 2028, which date may be shortened to a date not earlier than
February 24, 2003 or extended to a date not later than March 31, 2047, in
either case, if certain conditions are met. The Corporation owns all of
the Series 4 Common Securities of the Series 4 Issuer Trust.
$450,000,000 of 8.07% Capital Securities, Series A (the "Series A
Securities") were issued by BankAmerica Institutional Capital A (the "Series
A Trust"). The sole assets of the Series A Trust consist of $463,918,000
principal amount of 8.07% Junior Subordinated Deferrable Interest
Debentures, Series A (the "Series A Debentures") issued by the Corporation
to the Series A Trust.
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<PAGE>
The Series A Debentures bear interest at a rate of 8.07% per annum and will
mature on December 31, 2026. The Corporation owns all of the Common
Securities of the Series A Trust.
$300,000,000 of 7.7% Capital Securities, Series B (the "Series B
Securities") were issued by BankAmerica Institutional Capital B (the "Series
B Trust"). The sole assets of the Series B Trust consist of $309,279,000
principal amount of 7.7% Junior Subordinated Deferrable Interest Debentures,
Series B (the "Series B Debentures") issued by the Corporation to the Series
B Trust. The Series B Debentures bear interest at the rate of 7.7% per annum
and will mature on December 31, 2026. The Corporation owns all of the Common
Securities of the Series B Trust.
$300,000,000 of 7 3/4% Trust Originated Preferred Securities, Series 1 (the
"Series 1 Securities") were issued by BankAmerica Capital I (the "Series 1
Trust"). The sole assets of the Series 1 Trust consist of $309,279,000
principal amount of 7 3/4% Junior Subordinated Deferrable Interest
Debentures, Series 1 (the "Series 1 Debentures") issued by the Corporation
to the Series 1 Trust. The Series 1 Debentures bear interest at the rate of
7 3/4% per annum and will mature on December 31, 2026, which date may be
shortened to a date not earlier than December 20, 2001 or extended to a date
not later than December 31, 2045, in either case, if certain conditions are
met. The Corporation owns all of the Common Securities of the Series 1
Trust.
$450,000,000 of the 8% Cumulative Semi-Annual Income Preferred Securities,
Series 2 (the "Series 2 Securities") were issued by BankAmerica Capital II (
the "Series 2 Trust"). The sole assets of the Series 2 Trust consist of
$463,918,000 principal amount of 8% Junior Subordinated Deferrable Interest
Debentures, Series 2 (the "Series 2 Debentures") issued by the Corporation
to the Series 2 Trust. The Series 2 Debentures bear interest at the rate of
8% per annum and will mature on December 15, 2026. The Corporation owns all
of the Common Securities of the Series 2 Trust.
$400,000,000 of the Floating Rate Capital Securities, Series 3 (the "Series
3 Securities") were issued by BankAmerica Capital III (the "Series 3
Trust"). The sole assets of the Series 3 Trust consist of $412,372,000
principal amount of Floating Rate Junior Subordinated Deferrable Interest
Debentures, Series 3 (the "Series 3 Debentures") issued by the Corporation
to the Series 3 Trust. The Series 3 Debentures bear interest at a floating
rate and will mature on January 15, 2027. The Corporation owns all of the
Common Securities of the Series 3 Trust.
(c) Subsequent to December 31, 1997, the consolidated capitalization of the
Corporation and its subsidiaries has been affected by various issuances,
redemptions, repurchases and maturities which are not reflected in this
table.
S-12
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Series 4 Issuer Trust will be treated
as a subsidiary of the Corporation and, accordingly, the accounts of the
Series 4 Issuer Trust will be included in the consolidated financial
statements of the Corporation. The Series 4 Preferred Securities will be
included in a separate line item in the consolidated balance sheets of the
Corporation, entitled "Corporation Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Solely Junior Subordinated Deferrable
Interest Debentures of the Corporation" and appropriate disclosures about the
Series 4 Preferred Securities, the Series 4 Guarantee and the Series 4
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 4 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 trusts created by
the Corporation on the Corporation's balance sheet in the separate line item
entitled "Corporation Obligated Mandatorily Redeemable Preferred Securities of
Subsidiary Trusts Holding Solely Junior Subordinated Deferrable Interest
Debentures of the Corporation"; (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 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 and guarantee, 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 4 PREFERRED SECURITIES
GENERAL
The following summary of certain terms and provisions of the Series 4
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 4
Preferred Securities, 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 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 4 Preferred Securities represent beneficial interests in the
Series 4 Issuer Trust, and Distributions on each Series 4 Preferred Security
will be payable at the annual rate of 7% of the stated Liquidation Amount of
$25, payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, to the holders of the Series 4 Preferred Securities
at the close of business on the relevant record dates. The record dates will
be, for so long as the Series 4 Preferred Securities remain in book-entry
form, one Business Day prior to the relevant Distribution payment date and, in
the event the Series 4 Preferred Securities are not in book-entry form, the
15th day of the month in which the relevant Distribution payment date occurs.
Distributions will accumulate from the date of original issuance. The first
Distribution payment date for the Series 4 Preferred Securities will be March
31, 1998
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<PAGE>
and the Distribution will be $.17986 per Series 4 Preferred Security. The
amount of Distributions payable for any period less than a full Distribution
period will be computed on the basis of a 360-day year of twelve 30-day months
and the actual days elapsed in a partial month in a period. Distributions
payable for each full Distribution period will be computed by dividing the
rate per annum by four. In the event that any date on which Distributions are
payable on the Series 4 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 any additional
Distributions 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 Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
See "Description of Preferred Securities--Distributions" in the accompanying
Prospectus.
So long as no Event of Default under the Junior Subordinated Indenture has
occurred and is continuing, the Corporation has the right under the Junior
Subordinated Indenture to defer the payment of interest on the Series 4
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 4 Subordinated Debentures. As a consequence of any such election,
quarterly Distributions on the Series 4 Preferred Securities will be deferred
by the Series 4 Issuer Trust during any such Extension Period. Distributions
to which holders of the Series 4 Preferred Securities are entitled will
accumulate additional Distributions thereon at the rate per annum of 7%
thereof, compounded quarterly from the relevant payment date for such
Distributions, computed on the basis of a 360-day year of twelve 30-day months
and the actual days elapsed in a partial month in a period. Additional
Distributions payable for each full Distribution period will be computed by
dividing the rate per annum by four. The term "Distributions" as used herein
shall include any such additional Distributions. During any such Extension
Period, the Corporation may not, and may 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,
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
4 Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior in interest to
the Series 4 Subordinated Debentures (other than (a) dividends or
distributions in common stock of the Corporation, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, (c) payments under any
Guarantee or under any similar guarantee and (d) purchases of common stock
related to the issuance of common stock or rights under any of the
Corporation's (including its subsidiaries') benefit plans for their directors,
officers or employees). 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 4 Subordinated Debentures. Upon the termination
of any such Extension Period and the payment of all amounts then due, 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 4 Subordinated Debentures--Option to
Extend Interest Payment Period" 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 4
Subordinated Debentures.
S-14
<PAGE>
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series 4
Subordinated Debentures, whether at Stated Maturity or upon earlier redemption
as provided in the Junior Subordinated 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 Series 4 Securities, upon not less than
30 nor more than 90 days notice prior to the date fixed for repayment or
redemption, at a redemption price, with respect to the Series 4 Securities
(the "Redemption Price"), equal to the aggregate Liquidation Amount of such
Series 4 Securities plus accumulated and unpaid Distributions thereon to but
excluding the date of redemption (the "Redemption Date"). See "Description of
Preferred Securities--Redemption" in the accompanying Prospectus. For a
description of the Stated Maturity and redemption provisions of the Series 4
Subordinated Debentures, see "Certain Terms of Series 4 Subordinated
Debentures--General" and "--Redemption."
The Corporation has the right to redeem the Series 4 Subordinated Debentures
(i) on or after February 24, 2003, in whole at any time or in part from time
to time, or (ii) in whole (but not in part) prior to February 24, 2003 and
within 90 days following the occurrence of a Tax Event or Capital Treatment
Event, in each case at a redemption price equal to the accrued and unpaid
interest on the Series 4 Subordinated Debentures so redeemed to but excluding
the date fixed for redemption, plus 100% of the principal amount thereof. A
redemption of the Series 4 Subordinated Debentures would cause a mandatory
redemption of the Series 4 Preferred Securities and Series 4 Common
Securities.
"Like Amount" means (i) with respect to a redemption of Series 4 Securities,
Series 4 Securities having a Liquidation Amount (as defined below) equal to
that portion of the principal amount of Series 4 Subordinated Debentures to be
contemporaneously redeemed in accordance with the Junior Subordinated
Indenture, allocated to the Series 4 Common Securities and to the Series 4
Preferred Securities based upon the relative Liquidation Amounts of such
classes and the proceeds of which will be used to pay the Redemption Price of
the Series 4 Securities and (ii) with respect to a distribution of Series 4
Subordinated Debentures to holders of Series 4 Securities in connection with a
dissolution or liquidation of the Series 4 Issuer Trust, Series 4 Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Series 4 Securities of the holder to whom such Series 4 Subordinated
Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Series 4 Security.
"Tax Event" means the receipt by the Series 4 Issuer Trust of an opinion of
counsel to the Corporation 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 Series 4 Preferred Securities under the Trust
Agreement, there is more than an insubstantial risk that (i) the Series 4
Issuer Trust 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 4 Subordinated Debentures, (ii) interest payable by the
Corporation on the Series 4 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) the
Series 4 Issuer Trust 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.
"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
S-15
<PAGE>
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 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 Series 4 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 Liquidation Amount of the Series 4 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.
LIQUIDATION OF SERIES 4 ISSUER TRUST AND DISTRIBUTION OF SERIES 4 SUBORDINATED
DEBENTURES TO HOLDERS
The Corporation will have the right at any time to terminate the Series 4
Issuer Trust and, after satisfaction of liabilities to creditors of the Series
4 Issuer Trust as required by applicable law, cause the Series 4 Subordinated
Debentures to be distributed to the holders of the Series 4 Securities in
liquidation of the Series 4 Issuer Trust. Such right is subject to the
Corporation having received prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal
Reserve.
Under current United States federal income tax law and interpretations and
assuming, as expected, the Series 4 Issuer Trust is treated as a grantor
trust, a distribution of the Series 4 Subordinated Debentures should not be a
taxable event to holders of the Series 4 Preferred Securities. Should there be
a change in law, a change in legal interpretation, a Tax Event or other
circumstances, however, the distribution could be a taxable event to holders
of the Series 4 Preferred Securities. See "Certain Federal Income Tax
Consequences--Distribution of Series 4 Subordinated Debentures to Holders of
Series 4 Preferred Securities." If the Corporation elects neither to redeem
the Series 4 Subordinated Debentures prior to maturity nor to liquidate the
Series 4 Issuer Trust and distribute the Series 4 Subordinated Debentures to
holders of the Series 4 Securities, the Series 4 Preferred Securities will
remain outstanding until the repayment of the Series 4 Subordinated
Debentures.
If the Corporation elects to liquidate the Series 4 Issuer Trust and thereby
causes the Series 4 Subordinated Debentures to be distributed to holders of
the Series 4 Securities in liquidation of the Series 4 Issuer Trust, the
Corporation shall continue to have the right to shorten or extend the maturity
of such Series 4 Subordinated Debentures, subject to certain conditions as
described under "Certain Terms of Series 4 Subordinated Debentures--General."
LIQUIDATION VALUE
The amount payable on the Series 4 Preferred Securities in the event of any
liquidation of the Series 4 Issuer Trust is $25 per Series 4 Preferred
Security plus accumulated and unpaid Distributions, which may be in the form
of a distribution of such amount in Series 4 Subordinated Debentures, subject
to certain exceptions. See "Description of Preferred Securities--Liquidation
Distribution Upon Termination" in the accompanying Prospectus.
REGISTRATION OF SERIES 4 PREFERRED SECURITIES
The Series 4 Preferred Securities will be represented by global certificates
registered in the name of DTC or its nominee. Beneficial interests in the
Series 4 Preferred Securities 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 4 Preferred
Securities in certificated form will not be issued in exchange for the global
certificates. See "Book-Entry Issuance" in the accompanying Prospectus.
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<PAGE>
A global security shall be exchangeable for Series 4 Preferred Securities
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
depository for such global security, or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when DTC is required to be so registered to act as such
depository, and no successor depository shall have been appointed, (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 Junior Subordinated Indenture with respect to the
Series 4 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 (as defined in the accompanying Prospectus) with respect to
ownership of beneficial interests in such global security. In the event that
Series 4 Preferred Securities are issued in definitive form, such Series 4
Preferred Securities will be in denominations of $25 and integral multiples
thereof and may be transferred or exchanged at the offices described below.
Payments on Series 4 Preferred Securities represented by a global security
will be made to DTC, as the depository for the Series 4 Preferred Securities.
In the event Series 4 Preferred Securities are issued in definitive form, the
Redemption Price and Distributions will be payable, the transfer of the Series
4 Preferred Securities will be registrable, and Series 4 Preferred Securities
will be exchangeable for Series 4 Preferred Securities of other denominations
of a like aggregate Liquidation Amount, at the corporate trust 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 4 Preferred Securities are issued in
certificated form, the record dates for payment of Distributions will be the
15th day of the last month of each calendar quarter. For a description of DTC
and the terms of the depository 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 4 SUBORDINATED DEBENTURES
GENERAL
The following summary of certain terms and provisions of the Series 4
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" and "Description of Junior Subordinated Debentures--
Corresponding Junior Subordinated Debentures," to which description reference
is hereby made. The summary of certain terms and provisions of the Series 4
Subordinated Debentures set forth below, which describes the material terms
thereof, does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Junior Subordinated Indenture, to which
reference is hereby made. The Junior Subordinated Indenture has been filed as
an exhibit to the Registration Statement of which this Prospectus Supplement
and the accompanying Prospectus form a part.
Concurrently with the issuance of the Series 4 Preferred Securities, the
Series 4 Issuer Trust will invest the proceeds thereof, together with the
consideration paid by the Corporation for the Series 4 Common Securities, in
the Series 4 Subordinated Debentures issued by the Corporation. The Series 4
Subordinated Debentures will bear interest at the annual rate of 7% 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 March 31, 1998, to the person in whose name each Series 4
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
S-17
<PAGE>
liquidation, if any, of the Series 4 Issuer Trust, each Series 4 Subordinated
Debenture will be held by the Property Trustee in trust for the benefit of the
holders of the Series 4 Securities. The amount of interest payable for any
period less than a full interest period will be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in a period. The amount of interest payable for any full interest period
will be computed by dividing the rate per annum by four. In the event that any
date on which interest is payable on the Series 4 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 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 7% thereof, compounded quarterly. 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 4 Subordinated Debentures will be issued as a series of junior
subordinated debentures under the Junior Subordinated Indenture. The Series 4
Subordinated Debentures will mature on March 31, 2028 (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 February 24, 2003, subject to the Corporation having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. 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 March 31, 2047 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 4
Subordinated Debentures, (iii) the Series 4 Issuer Trust is not in arrears on
payments of Distributions on the Series 4 Preferred Securities and no deferred
Distributions are accumulated and (iv) the Series 4 Subordinated Debentures
are rated not less than BBB- by Standard & Poor's Ratings Services or Baa3 by
Moody's Investors Service, Inc. or the equivalent by any other nationally
recognized statistical rating organization. In the event the Corporation
elects to shorten or extend the Stated Maturity of the Series 4 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 4 Subordinated Debentures no more than 90 and no less than 30 days
prior to the effectiveness thereof.
The Series 4 Subordinated Debentures will be unsecured and will rank junior
and be subordinate in right of payment to all Senior Indebtedness of the
Corporation. Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary,
including Bank of America, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Series 4
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. In
addition, there are also various legal limitations on the extent to which the
Corporation's depository subsidiaries may extend credit, pay dividends or
otherwise supply funds to the Corporation or various of its affiliates.
Accordingly, the Series 4 Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Series 4 Subordinated Debentures should look only
to the assets of the Corporation for payments on the Series 4 Subordinated
Debentures. See "BankAmerica Corporation." The Junior Subordinated Indenture
does not limit the incurrence or issuance of other secured or unsecured debt
of the Corporation, including Senior Indebtedness, whether under the Junior
Subordinated Indenture or any existing or other indenture that the Corporation
may enter into in
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<PAGE>
the future or otherwise. See "Description of Junior Subordinated Debentures--
Subordination" in the accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Event of Default under the Junior Subordinated Indenture has
occurred and is continuing, the Corporation has the right under the Junior
Subordinated Indenture at any time during the term of the Series 4
Subordinated Debentures to defer the payment of interest 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 4 Subordinated Debentures. At the end of
such Extension Period, the Corporation must pay all interest then accrued and
unpaid (together with interest thereon at the annual rate of 7%). During an
Extension Period, interest will continue to accrue and holders of Series 4
Subordinated Debentures (or holders of Series 4 Preferred Securities while
such series is 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, and may 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, 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 4 Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation if such guarantee ranks pari
passu with or junior in interest to the Series 4 Subordinated Debentures
(other than (a) dividends or distributions in common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under any Guarantee or under any similar guarantee and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's (including its subsidiaries') benefit plans for
their directors, officers or employees). 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 4 Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all amounts then
due on any Interest Payment Date, 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 of such Extension Period at least
one Business Day prior to the earlier of (i) the date the Distributions on the
Series 4 Preferred Securities 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 self-regulatory organization or to holders
of such Series 4 Preferred Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day
prior to such record date. The Property Trustee shall give notice of the
Corporation's election to begin a new Extension Period to the holders of the
Series 4 Preferred Securities. 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 Extend Interest Payment Date" in
the accompanying Prospectus.
S-19
<PAGE>
ADDITIONAL SUMS
In the event a Tax Event has occurred and is continuing and the Series 4
Issuer Trust is the holder of all of the Series 4 Subordinated Debentures, the
Corporation will pay Additional Sums, if any (as defined below), on the Series
4 Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions paid by the Series 4 Issuer Trust on the
outstanding Series 4 Preferred Securities and Common Securities of the Series
4 Issuer Trust shall not be reduced as a result of any additional taxes,
duties and other governmental charges to which the Series 4 Issuer Trust has
become subject as a result of a Tax Event.
REDEMPTION
Subject to the Corporation having received prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of
the Federal Reserve, the Series 4 Subordinated Debentures are redeemable prior
to maturity at the option of the Corporation (i) on or after February 24,
2003, in whole at any time or in part from time to time, or (ii) in whole (but
not in part) prior to February 24, 2003 and within 90 days following the
occurrence of a Tax Event or Capital Treatment Event, in each case at a
redemption price equal to the accrued and unpaid interest on the Series 4
Subordinated Debentures so redeemed to but excluding the date fixed for
redemption, plus 100% of the principal amount thereof. The proceeds of any
such redemption will be used by the Series 4 Issuer Trust to redeem the Series
4 Securities. See "Description of Junior Subordinated Debentures--Redemption"
in the accompanying Prospectus.
DISTRIBUTION OF SERIES 4 SUBORDINATED DEBENTURES
As described under "Certain Terms of Series 4 Preferred Securities--
Liquidation of Series 4 Issuer Trust and Distribution of Series 4 Subordinated
Debentures to Holders," under certain circumstances involving the termination
of the Series 4 Issuer Trust, Series 4 Subordinated Debentures may be
distributed to the holders of the Series 4 Securities in liquidation of the
Series 4 Issuer Trust after satisfaction of liabilities to creditors of the
Series 4 Issuer Trust as provided by applicable law. If distributed to holders
of Series 4 Securities in liquidation, the Series 4 Subordinated Debentures
will initially be issued in the form of one or more global securities and DTC,
or any successor depository for the Series 4 Preferred Securities, will act as
depository for the Series 4 Subordinated Debentures. It is anticipated that
the depository arrangements for the Series 4 Subordinated Debentures would be
substantially identical to those in effect for the Series 4 Preferred
Securities. If the Series 4 Subordinated Debentures are distributed to the
holders of Series 4 Preferred Securities upon the liquidation of the Series 4
Issuer Trust, the Corporation will use its best efforts to list the Series 4
Subordinated Debentures on the New York Stock Exchange or such other stock
exchanges, if any, on which the Series 4 Preferred Securities are then listed.
There can be no assurance as to the market price of any Series 4 Subordinated
Debentures that may be distributed to the holders of Series 4 Preferred
Securities.
S-20
<PAGE>
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 4 Preferred
Securities. This summary only addresses the tax consequences to a person that
acquires Series 4 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 or
(iii) an estate or trust the income of which is subject to United States
federal income tax on a net income basis with respect to the Series 4
Preferred Securities (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 4 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, dealers in securities or currencies, and traders in securities
that elect to mark to market, (iii) persons that will hold Series 4 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 4 Preferred Securities as
capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Orrick, Herrington & Sutcliffe LLP, counsel to the
Corporation and the Series 4 Issuer Trust. 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 4 Preferred Securities. An opinion of
counsel is not binding on the Internal Revenue Service or the courts, and the
authorities on which this summary is based are subject to various
interpretations. It is therefore possible that the federal income tax
treatment of the purchase, ownership and disposition of Series 4 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 4 PREFERRED SECURITIES,
AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF THE SERIES 4 ISSUER TRUST
In connection with the issuance of the Series 4 Preferred Securities,
Orrick, Herrington & Sutcliffe LLP will render its opinion to the effect that,
under then current law and assuming compliance with the terms of the Trust
Agreement, and based on certain facts and assumptions contained in such
opinion, the Series 4 Issuer Trust will be classified as a grantor trust and
not as an association taxable as a corporation for United States federal
income tax purposes. As a result, each beneficial owner of Series 4 Preferred
Securities (a "Securityholder") will be treated as owning an undivided
beneficial interest in the Series 4 Subordinated Debentures. Accordingly, each
Securityholder will be required to include in its gross income its pro rata
share of the items of income realized with respect to the Series 4
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 4 Preferred Securities
will be eligible for the dividends-received deduction.
S-21
<PAGE>
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Final Treasury Regulations issued on June 11, 1996 generally provide that
stated interest on a debt instrument is not "qualified stated interest" and,
therefore, will give rise to original issue discount ("OID") unless such
interest is unconditionally payable in cash or in property (other than debt
instruments of the issuer) at least annually at a single fixed rate. Interest
is considered to be unconditionally payable only if reasonable legal remedies
exist to compel timely payment or the debt instrument otherwise provides terms
and conditions that make the likelihood of late payment (other than late
payment that occurs within a reasonable grace period) or non-payment a "remote
contingency."
Under the Junior Subordinated Indenture, the Corporation has the right, at
any time and from time to time during the term of the Series 4 Subordinated
Debentures to defer payments of interest by extending the interest payment
period for a period not exceeding 20 consecutive quarters with respect to each
Extension Period. Unless the likelihood of exercise of such right to defer is
remote, the Series 4 Subordinated Debentures would be issued with OID. During
any Extension Period, (a) the Corporation will not be permitted to declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its capital stock, and (b) the
Corporation will not be permitted to make any payment of principal, interest
or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Corporation that rank pari passu with or
junior to the Series 4 Subordinated Debentures (although these restrictions
will not apply to dividends or distributions in common stock of the
Corporation and in certain other limited situations). See "Certain Terms of
Series 4 Subordinated Debentures--Option to Extend Interest Payment Period."
The Corporation believes that the adverse impact that the imposition of such
restrictions would have on the Corporation and on the value of the equity
securities of the Corporation makes the likelihood of the Corporation
exercising its right to defer payments of interest on the Series 4
Subordinated Debentures remote. Accordingly, the Corporation believes that the
stated interest on the Series 4 Subordinated Debentures should be considered
unconditionally payable for purposes of the OID provisions of the Code and
that the Series 4 Subordinated Debentures should not be considered to have
been issued with OID (other than de minimis OID, if any). As a result, each
Securityholder will be required to include interest payments in taxable income
at the time accrued or received in accordance with its own method of
accounting. There can be no assurance, however, that the Internal Revenue
Service will agree with such determination.
However, if the Corporation does exercise its right to defer payments of
interest thereon, the Series 4 Subordinated Debentures will be considered to
be retired and reissued for their adjusted issue price at such time, and the
Series 4 Subordinated Debentures thereafter will be considered to have been
issued with OID. In such case, all the interest payments thereafter payable
will be treated as OID. If the payments were treated as OID (either because
the Corporation exercises the right to defer interest payments or because the
exercise of such right was not remote at the time of issuance), holders must
include that discount in income on an economic accrual basis before the
receipt of cash attributable to the interest, regardless of their method of
tax accounting. The amount of OID that accrues in any quarter will
approximately equal the amount of the interest that accrues in that quarter at
the stated interest rate and any de minimis OID allocated to such period. In
the event that the interest payment period is extended, holders will continue
to accrue OID approximately equal to the amount of the interest payment due at
the end of the extended interest payment period and any de minimis OID
allocated to such period on an economic accrual basis over the length of the
extended interest period. A Securityholder that disposes of the Series 4
Preferred Securities during an Extension Period may suffer a loss because the
market value of the Series 4 Preferred Securities likely will fall if the
Corporation exercises its option to defer payments of interest on the Series 4
Subordinated Debentures. To the extent the selling price is less than the
Securityholder's adjusted tax basis (which will include all accrued but unpaid
interest), a Securityholder will recognize a capital loss.
S-22
<PAGE>
DISTRIBUTION OF SERIES 4 SUBORDINATED DEBENTURES TO HOLDERS OF SERIES 4
PREFERRED SECURITIES
Under current law, a distribution by the Series 4 Issuer Trust of the Series
4 Subordinated Debentures, as described under the caption "Certain Terms of
Series 4 Preferred Securities--Liquidation of Series 4 Issuer Trust and
Distribution of Series 4 Subordinated Debentures to Holders," will be non-
taxable and will result in the Securityholder receiving directly his pro rata
share of the Series 4 Subordinated Debentures previously held indirectly
through the Series 4 Issuer Trust, with a holding period and aggregate tax
basis equal to the holding period and aggregate tax basis such Securityholder
had in its Series 4 Preferred Securities before such distribution.
SALES OR REDEMPTION OF SERIES 4 PREFERRED SECURITIES
Gain or loss will be recognized by a Securityholder on a sale of Series 4
Preferred Securities (including a redemption for cash) in an amount equal to
the difference between the amount realized and the Securityholder's adjusted
tax basis in the Series 4 Preferred Securities sold or so redeemed. A
Securityholder's adjusted tax basis in the Series 4 Preferred Securities will
be increased by any OID included in gross income and decreased by any interest
payments not treated as "qualified stated interest" (as defined above). See
"--Interest Income and Original Issue Discount." Gain or loss recognized by a
Securityholder on Series 4 Preferred Securities held for more than one year
generally will be taxable as long-term capital gain or loss. Amounts
attributable to accrued interest with respect to a Securityholder's pro rata
share of the Series 4 Subordinated Debentures not previously included in
income will be taxable as ordinary income.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest paid or OID accrued on the Series 4 Preferred
Securities held of record by United States Persons (other than corporations
and other exempt Securityholders) will be reported to the Internal Revenue
Service. "Backup" withholding at a rate of 31% will apply to payments of
interest to non-exempt 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 4 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 Internal Revenue Service.
It is anticipated that income on the Series 4 Preferred Securities will be
reported to holders on Form 1099 and mailed to holders of the Series 4
Preferred Securities by January 31 following each calendar year.
POSSIBLE TAX LAW CHANGES
The Clinton Administration's budget proposal for fiscal year 1997 and fiscal
year 1998 contained provisions which could have adversely affected the
Corporation's ability to deduct interest on the Series 4 Subordinated
Debentures. Congress did not enact these provisions. However, there can be no
assurance that future legislative proposals, future regulations or official
administrative pronouncements, or future judicial decisions will not affect
the ability of the Corporation to deduct interest on the Series 4 Subordinated
Debentures. Such a change could give rise to a Tax Event, which may permit the
Corporation to cause a redemption of the Series 4 Preferred Securities, as
described more fully in the accompanying Prospectus under "Description of
Preferred Securities--Redemption" and "--Distribution of Corresponding Junior
Subordinated Debentures."
S-23
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Corporation and the Series 4 Issuer Trust have agreed that the Series 4
Issuer Trust will sell to each of the Underwriters named below, and each of
such Underwriters for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated,
BancAmerica Robertson Stephens, Morgan Stanley & Co. Incorporated, PaineWebber
Incorporated, Prudential Securities Incorporated and Smith Barney Inc. are
acting as representatives has severally agreed to purchase from the Series 4
Issuer Trust, the respective number of Series 4 Preferred Securities set forth
opposite its name below. In the Underwriting Agreement, the several
Underwriters have agreed, subject to the terms and conditions set forth
therein, to purchase all the Series 4 Preferred Securities offered hereby if
any of the Series 4 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 4
PREFERRED
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................... 1,600,000
BancAmerica Robertson Stephens................................ 1,598,000
Morgan Stanley & Co. Incorporated............................. 1,598,000
PaineWebber Incorporated...................................... 1,598,000
Prudential Securities Incorporated............................ 1,598,000
Smith Barney Inc.............................................. 1,598,000
BT Alex. Brown Incorporated................................... 140,000
Robert W. Baird & Co. Incorporated............................ 140,000
Bear, Stearns & Co. Inc....................................... 140,000
CIBC Oppenheimer Corp......................................... 140,000
Cowen & Company............................................... 140,000
Crowell, Weedon & Co.......................................... 140,000
Dain Rauscher Incorporated.................................... 140,000
Donaldson, Lufkin & Jenrette Securities Corporation........... 140,000
A.G. Edwards & Sons, Inc...................................... 140,000
EVEREN Securities, Inc........................................ 140,000
Legg Mason Wood Walker, Incorporated.......................... 140,000
Lehman Brothers Inc........................................... 140,000
Piper Jaffray Inc............................................. 140,000
Raymond James & Associates, Inc............................... 140,000
The Robinson-Humphrey Company, LLC............................ 140,000
Sutro & Co. Incorporated...................................... 140,000
US Clearing Corp. ............................................ 140,000
Wheat First Securities, Inc. ................................. 140,000
Advest, Inc. ................................................. 70,000
Blaylock & Partners, L.P. .................................... 70,000
J.C. Bradford & Co. .......................................... 70,000
Fahnestock & Co. Inc. ........................................ 70,000
First Albany Corporation...................................... 70,000
First of Michigan Corporation................................. 70,000
Gibraltar Securities Co....................................... 70,000
Gruntal & Co., L.L.C. ........................................ 70,000
</TABLE>
S-24
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SERIES 4
PREFERRED
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
Interstate/Johnson Lane Corporation........................... 70,000
Janney Montgomery Scott Inc. ................................. 70,000
Josephthal & Co. Inc. ........................................ 70,000
Kennedy, Cabot & Co. ......................................... 70,000
McDonald & Company Securities, Inc. .......................... 70,000
McGinn, Smith & Co., Inc. .................................... 70,000
Mesirow Financial, Inc. ...................................... 70,000
Morgan Keegan & Company, Inc. ................................ 70,000
The Ohio Company.............................................. 70,000
Olde & Co., Incorporated...................................... 70,000
Pryor, McClendon, Counts & Co., Inc. ......................... 70,000
Redwood Securities Group, Inc. ............................... 70,000
Roney & Co., LLC.............................................. 70,000
Scott & Stringfellow, Inc. ................................... 70,000
Stephens Inc. ................................................ 70,000
Stifel, Nicolaus & Company, Incorporated...................... 70,000
Stone & Youngberg............................................. 70,000
Trilon International Inc. .................................... 70,000
Utendahl Capital Partners, L.P. .............................. 70,000
----------
Total..................................................... 14,000,000
==========
</TABLE>
In view of the fact that the proceeds from the sale of the Series 4
Preferred Securities will ultimately be used to purchase the Series 4
Subordinated Debentures of the Corporation, the Underwriting Agreement
provides that the Corporation will pay as compensation ("Underwriters'
Compensation") to the Underwriters arranging the investment therein of such
proceeds, an amount in immediately available funds for the accounts of the
several Underwriters of $.7875 per Series 4 Preferred Security or, in the case
of Series 4 Preferred Securities that have been initially allocated for sale
to certain institutions, $.25 per Series 4 Preferred Security. Based on such
initial allocation, the estimated aggregate Underwriters' Compensation is
$10,939,000. The actual aggregate Underwriters' Compensation will depend on
the number of Series 4 Preferred Securities actually purchased by such
institutional investors, which may be greater or less than the initial
allocation.
The Underwriters propose initially to offer the Series 4 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 $.50 ($.15 in the case of Series 4 Preferred
Securities allocated to certain institutions) per Series 4 Preferred Security.
The Underwriters may allow, and such dealers may reallow, a discount not in
excess of $.30 per Series 4 Preferred Security to certain other dealers. After
the initial public offering, the public offering price, concession and
discount may be changed.
Prior to this offering, there has been no public market for the Series 4
Preferred Securities. The Series 4 Preferred Securities have been approved for
listing on the New York Stock Exchange, subject to notice of issuance. Trading
of the Series 4 Preferred Securities on the New York Stock Exchange is
expected to commence within a 30-day period after the initial delivery of the
Series 4 Preferred Securities. The Underwriters have advised the Corporation
that they intend to make a market in the Series 4 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 4 Preferred Securities.
S-25
<PAGE>
In order to meet one of the requirements for listing the Series 4 Preferred
Securities on the New York Stock Exchange, the Underwriters have undertaken to
sell lots of 100 or more Series 4 Preferred Securities to a minimum of 400
beneficial holders.
The Corporation and the Series 4 Issuer Trust 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.
The Underwriters may engage in over-allotment, stabilizing transactions and
covering transactions in accordance with Regulation M under the Securities
Exchange Act of 1934, as amended. Overallotment involves sales in excess of
the offering size, which creates a short position for the Underwriters.
Stabilizing transactions involve bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Covering
transactions involve purchases of the Series 4 Preferred Securities in the
open market after the distribution has been completed in order to cover short
positions. Such stabilizing transactions and covering transactions may cause
the price of the Series 4 Preferred Securities to be higher than it would
otherwise be in the absence of such transactions.
BancAmerica Robertson Stephens ("BARS") is a wholly-owned subsidiary of the
Corporation and an affiliate of the Series 4 Issuer Trust. Accordingly, any
offer and sale of the Series 4 Preferred Securities will comply with Rule 2720
of the Rules of Conduct of the National Association of Securities Dealers,
Inc. (the "NASD") regarding underwriting securities of an affiliate. No NASD
member participating in the offering of the Series 4 Preferred Securities will
execute a transaction in the Series 4 Preferred Securities in a discretionary
account without the prior written specific approval of the member's customer.
This Prospectus Supplement and the accompanying Prospectus may be used by BARS
in connection with offers and sales related to secondary market transactions
in the Series 4 Preferred Securities. BARS may act as principal or agent in
such transactions. Such sales will be made at prices related to prevailing
market prices at the time of sale.
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 4
Preferred Securities, the enforceability of the Trust Agreement and the
creation of the Series 4 Issuer Trust will be passed upon by Richards, Layton
& Finger, P.A., special Delaware Counsel to the Corporation and the Series 4
Issuer Trust. The validity of the Series 4 Guarantee and the Series 4
Subordinated Debentures will be passed upon for the Corporation by Orrick,
Herrington & Sutcliffe LLP, San Francisco, California and for the Underwriters
by Sullivan & Cromwell, Los Angeles, California. Orrick, Herrington &
Sutcliffe LLP and Sullivan & Cromwell 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 Orrick, Herrington & Sutcliffe LLP.
S-26
<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
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION, THE ISSUER TRUST OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE ISSUER TRUSTS SINCE THE DATE HEREOF. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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PROSPECTUS SUPPLEMENT
<S> <C>
Risk Factors.............................................................. S-4
BankAmerica Capital IV.................................................... S-9
BankAmerica Corporation................................................... S-10
Ratio of Earnings to Fixed Charges........................................ S-10
Capitalization............................................................ S-11
Accounting Treatment...................................................... S-13
Certain Terms of Series 4 Preferred Securities............................ S-13
Certain Terms of Series 4 Subordinated Debentures......................... S-17
Certain Federal Income Tax Consequences................................... S-21
Underwriting.............................................................. S-24
Validity of Securities.................................................... S-26
<CAPTION>
PROSPECTUS
<S> <C>
Available Information .................................................... 4
Incorporation of Certain Documents by Reference........................... 5
BankAmerica Corporation................................................... 6
The Issuer Trusts......................................................... 8
Use of Proceeds........................................................... 9
Description of Junior Subordinated Debentures............................. 9
Description of Preferred Securities....................................... 22
Description of Guarantees................................................. 33
Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures and the Guarantees............................... 36
Description of Debt Securities............................................ 38
Book-Entry Issuance....................................................... 48
Plan of Distribution...................................................... 50
Validity of Securities.................................................... 51
Experts................................................................... 51
</TABLE>
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14,000,000 PREFERRED SECURITIES
BANKAMERICA CAPITAL IV
7% TRUST ORIGINATED
PREFERRED SECURITIES,/(SM)/
SERIES 4 ("TOPrS/(SM)/")
FULLY AND UNCONDITIONALLY GUARANTEED,
TO THE EXTENT DESCRIBED HEREIN, BY
-----------------
PROSPECTUS SUPPLEMENT
-----------------
MERRILL LYNCH & CO.
BANCAMERICA ROBERTSON STEPHENS
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
FEBRUARY 19, 1998
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(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
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