<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 33-50395
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 15, 1993)
8,000,000 DEPOSITARY SHARES
LOGO BANKERS TRUST NEW YORK CORPORATION
EACH REPRESENTING A
ONE-HUNDREDTH INTEREST IN A SHARE OF
ADJUSTABLE RATE CUMULATIVE PREFERRED
STOCK, SERIES Q ($2,500 LIQUIDATION PREFERENCE)
---------------
Each of the depositary shares offered hereby (the "Depositary Shares")
represents a one-hundredth interest in a share of the Corporation's Adjustable
Rate Cumulative Preferred Stock, Series Q ($2,500 Liquidation Preference) (the
"Series Q Preferred Stock") deposited with Harris Trust Company of New York,
as depositary (the "Depositary"), and, through the Depositary, will entitle
the holder thereof to all proportional rights and preferences of the Series Q
Preferred Stock (including dividend, voting, redemption and liquidation
rights). The proportionate liquidation preference of each Depositary Share
will be $25.00. See "Certain Terms of the Depositary Shares" in this
Prospectus Supplement and "Depositary Shares" in the Prospectus accompanying
this Prospectus Supplement.
Dividends on the Series Q Preferred Stock will be cumulative from the date
of original issue and will be payable quarterly on March 1, June 1, September
1 and December 1 of each year. All dividends payable on shares of the Series Q
Preferred Stock to the Depositary, as record holder of the Series Q Preferred
Stock, will be distributed to the record holders of the Depositary Shares
representing such Series Q Preferred Stock in accordance with the Deposit
Agreement. See "Depositary Shares--Dividends and Other Distributions" in the
Prospectus accompanying this Prospectus Supplement.
The dividend rate for the dividend period ending on May 31, 1994 will be
5.90% per annum, which is equivalent to $.2581 per Depositary Share.
Thereafter, the dividend rate on the Series Q Preferred Stock will be equal to
85% of the Effective Rate (as defined below) in effect from time to time, but
in no event less than 4 1/2% or more than 10 1/2% per annum. The "Effective
Rate" for each quarterly dividend period will be the highest of the "Treasury
Bill Rate," the "Ten Year Constant Maturity Rate" and the "Thirty Year
Constant Maturity Rate" determined in advance of such dividend period. See
"Certain Terms of the Series Q Preferred Stock--Dividend Rights."
The Series Q Preferred Stock will be redeemable, in whole or in part, at the
option of the Corporation on or after March 1, 1999 at $2,500 per share (which
is equivalent to $25 per Depositary Share) plus accrued and unpaid dividends
to the redemption date. See "Certain Terms of the Series Q Preferred Stock--
Redemption."
Application has been made to list the Depositary Shares on the New York
Stock Exchange. See "Underwriting."
---------------
THE DEPOSITARY SHARES AND SERIES Q PREFERRED STOCK ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO THE
PUBLIC(1) DISCOUNT(2)(3) CORPORATION(1)(3)(4)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Depositary Share........... $25.00 $0.7875 $24.2125
- --------------------------------------------------------------------------------
Total.......................... $200,000,000 $6,300,000 $193,700,000
</TABLE>
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(1) Plus accrued dividends, if any, from March 28, 1994.
(2) The Corporation has agreed to indemnify the Underwriters against certain
liabilities, including certain liabilities under the Securities Act of
1933. See "Underwriting."
(3) The underwriting discount will be $0.50 per Depositary Share with respect
to any Depositary Shares sold to certain institutions. Therefore, to the
extent of any such sales to such institutions, the actual total
underwriting discount will be less than, and the actual total proceeds to
the Corporation will be greater than, the amounts shown in the table
above.
(4) Before deduction of expenses payable by the Corporation estimated at
$100,000.
---------------
The Depositary Shares offered by this Prospectus Supplement are offered by
the Underwriters subject to prior sale, withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by the
Underwriters and to certain further conditions. It is expected that delivery
of the Depositary Shares will be made at the offices of Lehman Brothers Inc.,
New York, New York, on or about March 28, 1994.
---------------
LEHMAN BROTHERS SMITH BARNEY SHEARSON INC.
March 21, 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
BANKERS TRUST NEW YORK CORPORATION
GENERAL
Bankers Trust New York Corporation is a bank holding company, incorporated
under the laws of the State of New York in 1965. At December 31, 1993, the
Corporation had consolidated total assets of $92.1 billion. The Corporation's
principal banking subsidiary is Bankers Trust Company ("Bankers"), which, along
with its subsidiaries, accounted for 61 percent of the Corporation's
consolidated total assets at December 31, 1993. Bankers, founded in 1903, is
among the largest commercial banks in New York City and the United States,
based on consolidated total assets. The Corporation concentrates its financial
and managerial resources on selected markets and services its clients by
meeting their needs for financing, advisory, processing and sophisticated risk
management solutions. The core organizational units of the Corporation are the
Global Investment Bank, Global Markets Proprietary, Global Investment
Management, Global Emerging Markets and Global Assets. Other business
activities include real estate finance and principal investing. The Corporation
also conducts its own proprietary operations. Among the institutional market
segments served are corporations, banks, other financial institutions,
governments and agencies, retirement plans, not-for-profit organizations,
wealthy individuals, foundations, private companies and individual investors.
Bankers originates loans and other forms of credit, accepts deposits, arranges
financings and provides numerous other commercial banking and financial
services. Bankers provides a broad range of financial advisory services to its
clients. It also engages in the proprietary trading of currencies, securities,
derivatives and commodities.
The Corporation is a legal entity separate and distinct from its
subsidiaries, including Bankers. There are various legal limitations governing
the extent to which the Corporation's banking subsidiaries may extend credit,
pay dividends or otherwise supply funds to, or engage in transactions with, the
Corporation or certain of its other subsidiaries. The rights of the Corporation
to participate in any distribution of assets of any subsidiary upon its
dissolution, winding-up, liquidation or reorganization or otherwise are subject
to the prior claims of creditors of that subsidiary, except to the extent that
the Corporation may itself be a creditor of that subsidiary and its claims are
recognized. Claims on the Corporation's subsidiaries by creditors other than
the Corporation include long-term debt and substantial obligations with respect
to deposit liabilities, securities sold, not yet purchased, federal funds
purchased, securities sold under repurchase agreements and commercial paper, as
well as various other liabilities.
The Corporation's principal executive offices are located at 280 Park Avenue,
New York, New York 10017, and its telephone number is (212) 250-2500.
CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXEDCHARGES AND PREFERRED STOCK
DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1989 1990 1991 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding Interest on Deposits......................... 0.67 1.28 1.37 1.41 1.69
Including Interest on Deposits......................... 0.82 1.15 1.21 1.26 1.47
</TABLE>
For purposes of computing these consolidated ratios, earnings represent
income (loss) before income taxes, cumulative effects of accounting changes and
equity in undistributed income of unconsolidated subsidiaries and affiliates,
plus fixed charges excluding capitalized interest. Fixed charges represent all
interest expense (ratios are presented both excluding and including interest on
deposits), the portion of net rental expense that is deemed representative of
the interest factor, the amortization of debt issuance expense and capitalized
interest. Fixed charges are then combined with preferred stock dividend
requirements, adjusted to a pretax basis, on the outstanding preferred stock.
For the year ended December 31, 1989, earnings, as defined, did not cover
combined fixed charges and preferred stock dividend requirements, excluding and
including interest on deposits, by $843 million as a result of the 1989 special
provision for refinancing country credit losses of $1.6 billion.
S-2
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION
The following selected consolidated financial data at and for each of the
two years in the period ending December 31, 1993, has been derived from and is
qualified in its entirety by the detailed financial information and
consolidated financial statements of the Corporation included in its Annual
Report on Form 10-K for the year ended December 31, 1993 which is incorporated
herein by reference.
<TABLE>
<CAPTION>
AT OR FOR THE
YEAR ENDED DECEMBER 31,
------------------------
1992 1993
----------- -----------
($ IN MILLIONS, EXCEPT
PER SHARE DATA)
CONDENSED CONSOLIDATED STATEMENT OF IN-
COME:
<S> <C> <C>
Interest revenue........................ $ 4,219 $ 4,436
Interest expense........................ 3,072 3,122
----------- -----------
Net interest revenue.................... 1,147 1,314
Provision for credit losses............. 225 93
----------- -----------
Net interest revenue after provision for
credit losses.......................... 922 1,221
Noninterest revenue..................... 2,331 3,364
Noninterest expenses.................... 2,347 3,035
----------- -----------
Income before income taxes and cumula-
tive effects of accounting changes..... 906 1,550
Income taxes............................ 267 480
----------- -----------
Income before cumulative effects of ac-
counting changes....................... 639 1,070
Cumulative effects of accounting changes
(1).................................... 446 (75)
----------- -----------
Net income.............................. $ 1,085 $ 995
=========== ===========
Net income applicable to common stock... $ 1,055 $ 972
=========== ===========
PER COMMON SHARE DATA:
Primary earnings per share
Income before cumulative effects of ac-
counting changes....................... $ 7.23 $ 12.40
Net income.............................. $ 12.53 $ 11.51
Fully diluted earnings per share
Income before cumulative effects of ac-
counting changes....................... $ 7.22 $ 12.29
Net income.............................. $ 12.51 $ 11.41
Cash dividends declared................. $ 2.88 $ 3.24
--as a percentage of net income (2)..... 40% 26%
Book value (3).......................... $ 43.23 $ 51.90
PROFITABILITY RATIOS:
Return on average common stockholders'
equity (2)............................. 19.52% 26.33%
Return on average total assets (2)...... .86% 1.25%
CONSOLIDATED BALANCES, END OF YEAR:
Trading account assets.................. $ 29,908 $ 48,276
Loans................................... $ 17,318 $ 15,200
Total assets............................ $ 72,886 $ 92,082
Deposits................................ $ 25,071 $ 22,776
Securities sold under repurchase agree-
ments.................................. $ 17,451 $ 23,834
Other short-term borrowings............. $ 11,779 $ 18,992
Long-term debt.......................... $ 3,992 $ 5,597
Common stockholders' equity............. $ 3,621 $ 4,284
Total stockholders' equity.............. $ 4,121 $ 4,534
CONSOLIDATED CAPITAL RATIOS, END OF YEAR:
Common stockholders' equity to total as-
sets................................... 4.97% 4.65%
Total stockholders' equity to total as-
sets................................... 5.65% 4.92%
Risk-based capital ratios
Tier 1 Capital.......................... 7.75% 8.50%
Total Capital........................... 13.64% 14.46%
Leverage Ratio.......................... 6.05% 6.28%
EMPLOYEES................................ 12,917 13,571
</TABLE>
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(1) The Corporation adopted the accounting standards for postretirement
benefits other than pensions (SFAS 106) and postemployment benefits (SFAS
112) effective January 1, 1993, and for income taxes (SFAS 109) effective
January 1, 1992.
(2) These figures exclude the cumulative effects of accounting changes
recorded in 1992 and 1993.
(3) This calculation includes the effect of common shares issuable under
deferred stock awards.
S-3
<PAGE>
CONSOLIDATED RESULTS OF OPERATIONS
Bankers Trust New York Corporation and subsidiaries (the "Corporation," or
the "Firm") earned $1.070 billion before cumulative effects of accounting
changes for the year 1993, up $431 million, or 67 percent, from the $639
million recorded in 1992. The Corporation's net income for 1993 was $995
million, versus net income of $1.085 billion in 1992.
Cumulative Effects of Accounting Changes
Effective January 1, 1993, the Corporation adopted the new Statements of
Financial Accounting Standards ("SFAS") for postretirement benefits other than
pensions (SFAS 106) and postemployment benefits (SFAS 112). In adopting SFAS
106 and SFAS 112, the Corporation recorded charges to earnings of $100 million
and $7 million, respectively (or $70 million and $5 million, respectively, net
of income taxes), for the cumulative effects of these changes in accounting
principles. Effective January 1, 1992, the Corporation adopted the new
accounting standard for income taxes (SFAS 109), resulting in the recording of
a $446 million credit to earnings for the cumulative effect of that accounting
change.
Business Functions
In addition to the reported income statement categories, the Corporation
breaks down and analyzes its business on the basis of five interrelated
business functions, which represent its core business activities. Their
definitions and respective shares of income before cumulative effects of
accounting changes are presented below:
--Client Finance: Meeting the credit and capital needs of clients.
--Client Advisory: Providing advice and structuring transactions designed
to implement client financial strategies.
--Client Financial Risk Management: Helping clients manage their financial
exposure.
--Client Transaction Processing: Providing operating and administrative
services to clients.
--Trading and Positioning: Proprietary activity involving securities,
derivatives, currency, commodity and funding transactions, as well as
positions assumed as part of client risk management activities.
Because the Corporation's business is complex in nature and its operations
are highly integrated, it is impractical to segregate the respective
contributions of the business functions with precision. For example, the Client
Advisory function is difficult to split from the Client Finance function, since
most complex financings include both an element of advice and the arrangement
of credit for the client. Further, transactions undertaken for the purposes of
Client Financial Risk Management may contain an element of Client Finance or
Trading and Positioning. Finally, the Trading and Positioning function serves
as an element of support for client-based activities. As a result, estimates
and subjective judgments have been made to apportion revenue and expenses among
the business functions. In addition, certain revenue and expenses have been
excluded from the business functions because, in the opinion of management,
they could not be reasonably allocated or because their attribution to a
particular function would be distortive. In 1993 and 1992, approximately $60
million and $40 million, respectively, of corporate expenses and, in 1992,
approximately $95 million of revenue (principally interest), were not allocated
or attributed to business functions. The corporate expenses included items such
as premises costs for temporarily unoccupied space; the interest revenue in
1992 primarily related to cash receipts and proceeds from past due claims on
refinancing countries. Despite these important qualifications concerning the
precision of the allocation of income before cumulative effects of accounting
changes among the functions, the Corporation believes that the categories and
the amounts presented provide a reasonable insight into the sources of its
income. Subject
S-4
<PAGE>
to the foregoing limitations, estimates and assumptions, a discussion of
significant factors affecting the results is presented below.
Client Finance--Client finance activities generate net interest revenue and
corporate finance fees from the following major products: debt and equity
underwriting, commercial paper, lending, loan syndication, leasing, structured
finance and private placements. Client Finance income in 1993 rose to $76
million from a slight loss in the prior year, principally due to a strong
market for debt underwritings worldwide, improved profitability of loan
syndications and a decline in credit costs attributable to the improvement in
the loan portfolio.
Client Advisory--Client Advisory activities include asset management, trust
advisory, merger and acquisition, strategic risk management, insurance and
other specialized advisory services. These activities principally give rise to
fiduciary and funds management revenue, and fees and commissions. Client
Advisory income declined by approximately 45 percent, to $63 million, in 1993.
While the majority of services earned higher revenue than in 1992, this was
offset by increased investments in 1993 in human resources and technology
necessary to support business expansion and enhance the related infrastructure.
Performance-based funds management fees declined from their 1992 level.
Client Financial Risk Management--Primary risk management products include
derivatives contracts related to interest rates, currencies, equities and
commodities (or indices thereof), and credit. These products generate both
trading and net interest revenue. The Corporation continues to benefit from the
expanded use of an increasingly sophisticated array of risk management products
by clients on a global basis. As a result, Client Financial Risk Management
income increased by approximately 50 percent in 1993, to $336 million.
Client Transaction Processing--This business function produces net interest
revenue, fiduciary and funds management revenue, and fees and commissions from
money transfer, securities custody and clearance, securities lending, and
retirement plan recordkeeping and administrative services. Processing volumes
in 1993 were up slightly. However, profit margins in Client Transaction
Processing were generally flat to slightly down, which together with higher
expenses due to significant investments in new systems (designed to improve
future margins), led to a modest decline in income, to $60 million.
Trading and Positioning--Trading and Positioning activities involve U.S.
government and agency securities, foreign government securities, various
derivative positions (including those assumed in connection with clients),
currencies, equities (including private equities which are generally held for
the intermediate- to long-term) and increasingly, commodities, which generate
trading, net interest and other revenue. 1993 provided favorable market
conditions surrounding interest rates, upon which the Corporation capitalized
in its mainstream U.S., European and Japanese bond trading. The year also
afforded profitable trading opportunities in emerging markets, especially Latin
America. As a result, income from Trading and Positioning activities tripled,
to $594 million, in 1993.
Net Interest Revenue
Fully taxable net interest revenue for 1993 was $1.396 billion, up $197
million, or 16 percent, from 1992.
The $197 million increase in net interest revenue during 1993 was due to a
$274 million, or 84 percent, increase in trading-related net interest revenue,
which totaled $601 million for 1993. The Firm's trading-related net interest
revenue began to climb significantly in the third quarter of 1992, and on a
year-over-year basis, it increased in each quarter of 1993.
A significant portion of the Firm's trading and risk management activities
involve positions in interest rate instruments and related derivatives. The
revenue from these activities can periodically shift between
S-5
<PAGE>
trading and net interest, depending on a variety of factors, including risk
management strategies. Therefore, the Corporation views trading revenue and
trading-related net interest revenue together.
Aside from trading-related net interest revenue, the Corporation's fully
taxable net interest revenue for 1993 declined by $77 million, or 9 percent,
from 1992. This decrease was primarily attributable to the combination of lower
levels of average interest-earning assets, particularly loans, and a $38
million decline, to $48 million, in interest recognized on past due claims with
Argentina and Brazil.
Provision and Allowance for Credit Losses
The provision for credit losses amounted to $93 million for 1993, compared
with $225 million for 1992.
Total net charge-offs for 1993 were $389 million, compared with $294 million
in the prior year. Nonrefinancing country net charge-offs for 1993 were $399
million and included charge-offs of $221 million which resulted from the sale
of Mexican government Par and Discount Bonds and industrial development bonds,
as well as the loss on revaluation to market value of the remainder of these
bonds as the result of their designation as available for sale in connection
with the adoption of SFAS 115 at December 31, 1993. Net charge-offs of $119
million of real estate loans and $15 million of loans to highly leveraged
borrowers were also recorded during 1993. For 1992, nonrefinancing country net
charge-offs were $274 million, which included $117 million of loans to highly
leveraged borrowers, $98 million of real estate loans and $59 million to other
borrowers, $50 million of which was attributable to a single domestic
commercial credit. In 1993, the Corporation recorded $10 million of refinancing
country net recoveries. In 1992, refinancing country net charge-offs totaled
$20 million, which included charge-offs of the Corporation's remaining medium-
and long-term loans (after sales of $295 million of such loans which resulted
in losses of $117 million during the year) to all refinancing countries other
than Brazil and Venezuela. Gross charge-offs during 1993 were $460 million,
compared with $343 million for 1992.
The allowance for credit losses decreased to $1.324 billion at December 31,
1993, from $1.620 billion at year end 1992. The allowance was equal to 136
percent and 118 percent of total cash basis loans at December 31, 1993 and
1992, respectively. Total medium- and long-term loans to refinancing countries
were $131 million at December 31, 1993, which consisted mostly of cash basis
loans to Brazilian borrowers. At December 31, 1992, the Corporation's
refinancing country loan portfolio, consisting primarily of loans to Brazilian
borrowers, had a total book value of $259 million, which amount approximated
the then-current net realizable value of this portfolio.
Noninterest Revenue
A significant portion of the Firm's trading and risk management activities
involve positions in interest rate instruments and related derivatives. The
revenue from these activities can periodically shift between trading and
trading-related net interest, depending on a variety of factors, including risk
management strategies.
Trading-related net interest revenue represents interest earned on cash
instruments held in the trading positions for either proprietary trading or
risk management purposes, less the cost to fund both cash and derivatives
positions.
For the year 1993, trading revenue was $1.631 billion, up $735 million, or 82
percent, from the $896 million reported in 1992. Similarly, trading-related net
interest increased to $601 million, up $274 million, or 84 percent, from $327
million in 1992. The $1.009 billion increase in combined trading revenue and
trading-related net interest revenue in 1993 resulted from the Firm's increased
positioning in sovereign bonds and other interest rate-sensitive securities and
particularly in instruments denominated in European currencies
S-6
<PAGE>
and in Yen as well as in the issues of several emerging markets countries.
These positions were acquired in connection with both proprietary and client
risk management activities.
The table below quantifies the Firm's 1993 trading revenue and trading-
related net interest revenue by major category of market risk. These categories
are based on management's view of the predominant underlying risk exposure of
each of the Firm's trading positions.
<TABLE>
<CAPTION>
Trading-
Related
Trading Net Interest
Year Ended December 31, 1993 Revenue Revenue Total
---------------------------- ------- ------------ ------
(in millions)
<S> <C> <C> <C>
Interest rate risk........................... $1,066 $642 $1,708
Foreign exchange risk........................ 191 -- 191
Equity and commodity risk.................... 374 (41) 333
------ ---- ------
Total...................................... $1,631 $601 $2,232
====== ==== ======
Year ended December 31, 1992................. $896 $327 $1,223
====== ==== ======
</TABLE>
Fiduciary and funds management revenue was $703 million in 1993, up $55
million, or 8 percent, from the $648 million earned in 1992. The increase in
1993 was primarily due to new business in securities lending and retirement
services, as well as higher levels of private banking assets under management.
These improvements were partially offset by a decline in performance-based
funds management fees.
Total fees and commissions were $710 million for 1993, which represented an
increase of $122 million, or 21 percent, from the $588 million earned in 1992.
Of the 1993 increase, $81 million related to corporate finance fees, which rose
by 25 percent, to $407 million. The 1993 increase in corporate finance fees was
driven by higher revenue from securities underwriting and loan and lease
syndication activities, as the year's extremely favorable market conditions led
many of the Firm's clients to restructure their balance sheets. The largest
components of the remaining $41 million increase were fees from the structuring
of products for employee benefit plans and fees for brokerage services.
Other noninterest revenue totaled $307 million for 1993, an increase of $104
million from 1992. The largest factor in this increase was a nearly ten-fold
increase in net revenue from equity investment transactions, including write-
offs, to $126 million. This category of other noninterest revenue included $32
million of total equity write-offs in 1993 (down from $52 million in 1992), as
well as a $16 million gain on the sale of the Corporation's minority interest
in A.F.P. Provida, S.A., a Chilean pension fund administrator. Also
contributing to the year-to-year increase in other noninterest revenue were a
$14 million increase in insurance premium revenue, a 1993 gain on the sale of
the Corporation's Bankstat business and slightly higher gains on sales of
certain other assets. Partially offsetting these factors were a higher level of
losses from the revaluation of non-trading foreign currency positions and a
1993 writedown of assets previously acquired in satisfaction of indebtedness as
well as gains during 1992 from the partial curtailment of an overseas defined
benefit plan ($15 million) and the sale of the San Francisco branch of the
California subsidiary ($10 million).
Noninterest Expenses
Total noninterest expenses were $3.035 billion for 1993, an increase of $688
million, or 29 percent, from the $2.347 billion recorded in 1992. Incentive
compensation and employee benefits expense increased by $442 million, or 61
percent, driven by a higher bonus accrual recorded in connection with the
higher earnings, although higher severance expense was also a factor in the
increase. Salaries expense was up $57 million, or 9 percent in 1993. The
average number of employees increased by 7 percent from the 1992 figure, to
13,334.
S-7
<PAGE>
All other noninterest expenses totaled $1.176 billion for 1993, which was
$189 million, or 19 percent, higher than in 1992. Increases in other real
estate expense, fees for professional services, agency personnel fees, the
provision for policyholder benefits and contributions expense accounted for
two-thirds of the total 1993 increase.
Income Taxes
Income tax expense for 1993 amounted to $480 million, compared with $267
million for 1992. The effective tax rate for 1993 was 31 percent, while the
1992 effective tax rate was 29 percent. These figures exclude the income taxes
included in the reported cumulative effect of accounting changes for SFAS 106
and SFAS 112 (1993) and SFAS 109 (1992).
In connection with the adoption of SFAS 109, a valuation allowance of $227
million was recorded effective January 1, 1992. The valuation allowance, the
amount of which was unchanged through December 31, 1993, related to deferred
tax assets the realization of which are dependent on the source and mix of
future income.
RECENT DEVELOPMENTS
The Corporation's business is affected by global factors, including, but not
limited to, economic and political conditions, broad trends in business and
finance, legislation and regulation affecting the U.S. and foreign business and
financial communities, currency, commodity and equity values, market conditions
and the level and volatility of interest rates. Among other effects, these
factors affect the volume and price levels of securities, foreign exchange
rates, futures and commodities transactions and the stability and liquidity of
markets. In particular, in the first quarter of 1994, market conditions have
been difficult due to, among other things, the Federal Reserve Board's decision
to raise short-term interest rates and the breakdown of U.S.-Japan trade talks,
which conditions have adversely affected certain of the Corporation's trading
positions. The Corporation issued a public statement on March 2, 1994, that
" . . . its operations thus far in 1994 have been profitable." The
Corporation's operations in 1994 continue to be profitable as of the date of
this Prospectus Supplement.
ACCOUNTING DEVELOPMENTS
In March 1992, the Financial Accounting Standards Board issued Interpretation
No. 39, "Offsetting of Amounts Related to Certain Contracts" (the
"Interpretation"), which is effective for fiscal years beginning after December
15, 1993. The Interpretation requires that unrealized gains and losses on
swaps, forwards, options and similar contracts be recognized as assets and
liabilities, whereas it had been the Corporation's policy to record such
unrealized gains and losses on a net basis on the balance sheet. The
Interpretation does allow the netting of such unrealized gains and losses with
the same counterparty when they are covered by a master netting arrangement
with the counterparty and the contracts are reported at market value.
The Corporation estimated that, under the terms of the Interpretation, at
December 31, 1993, total assets and liabilities each would have increased by
approximately $15 billion. Adoption of the Interpretation will result in
decreases in the Corporation's ratios of stockholders' equity to total assets
and the Leverage Ratio; however, net income and the risk-based capital ratios
will not be affected. The Corporation adopted the Interpretation effective
January 1, 1994.
USE OF PROCEEDS
$150,000,000 of the net proceeds from the sale of the Depositary Shares will
be used to purchase newly issued common stock of Bankers. The Series Q
Preferred Stock and the common stock of Bankers will qualify as Tier 1 capital
for the purposes of the Board of Governors of the Federal Reserve System's
risk-based capital and leverage guidelines at the Corporation and Bankers,
respectively. See "Bankers Trust New York Corporation--Accounting Developments"
for further information. The balance of such net proceeds will be used for
general corporate purposes.
S-8
<PAGE>
CERTAIN TERMS OF THE DEPOSITARY SHARES
The Corporation has provided for the issuance by the Depositary of the
Depositary Receipts evidencing Depositary Shares, each of which represents a
one-hundredth interest in a share of the Series Q Preferred Stock as described
below.
The shares of Series Q Preferred Stock represented by the Depositary Shares
will be deposited under the Deposit Agreement, dated as of March 28, 1994 (the
"Deposit Agreement"), between the Corporation, Harris Trust Company of New
York, as Depositary (the "Depositary"), and the holders from time to time of
Depositary Receipts issued by the Depositary thereunder. Depositary Receipts
will be issuable only in definitive registered form. Each Depositary Share will
represent a one-hundredth interest in a share of the Series Q Preferred Stock.
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will be entitled, through the Depositary and in proportion to the one-hundredth
interest in a share of the Series Q Preferred Stock represented by such
Depositary Share, to all rights and preferences of a share of the Series Q
Preferred Stock (including dividend, voting, redemption and liquidation
rights). See "Certain Terms of the Series Q Preferred Stock" below and
"Description of Series Preferred Stock" and "Depositary Shares" in the
Prospectus accompanying this Prospectus Supplement.
Harris Trust Company of New York will act as Depositary and as transfer
agent, dividend disbursing agent and registrar for the Series Q Preferred Stock
and acts as transfer agent, dividend disbursing agent and registrar for the
Corporation's Common Stock and certain series of the Corporation's series
preferred stock. In addition, the Corporation and Bankers have other
relationships arising in the ordinary course of business with Harris Trust
Company of New York and its affiliates.
The information contained herein concerning the Depositary Shares does not
purport to be complete and is subject to and qualified in its entirety by
reference to the provisions of the Deposit Agreement, including the definitions
therein of certain terms, and should be read in conjunction with the statements
under "Depositary Shares" in the Prospectus accompanying this Prospectus
Supplement.
CERTAIN TERMS OF THE SERIES Q PREFERRED STOCK
The following description of certain terms of the Series Q Preferred Stock
supplements, and to the extent inconsistent therewith supersedes, the
description of the general terms and provisions of the series preferred stock
set forth under the heading "Description of Series Preferred Stock" in the
Prospectus accompanying this Prospectus Supplement, to which reference is
hereby made. The Series Q Preferred Stock is a series of the series preferred
stock of the Corporation, which series preferred stock may be issued from time
to time in one or more series with such rights, preferences and limitations as
are determined by the Corporation's Board of Directors or a duly authorized
committee thereof. The description of certain provisions of the Series Q
Preferred Stock set forth below does not purport to be complete and is subject
to and qualified in its entirety by reference to the Restated Certificate of
Incorporation, as amended, of the Corporation, which has been filed with the
Commission as an exhibit to the Registration Statement of which the Prospectus
accompanying this Prospectus Supplement is a part, and the Certificate of
Amendment of the Restated Certificate of Incorporation, as amended, relating to
the Series Q Preferred Stock adopted by the Board of Directors of the
Corporation, to be filed by the Secretary of State of the State of New York on
or prior to the date of original issuance of the Series Q Preferred Stock. The
Certificate of Amendment will be filed with the Commission on or about the date
of original issuance of the Depositary Shares.
DIVIDEND RIGHTS
Holders of shares of Series Q Preferred Stock will be entitled to receive
cumulative cash dividends when, as and if declared by the Board of Directors of
the Corporation, out of funds legally available therefor, from the date of
original issuance of such shares to and including May 31, 1994 (the "Initial
Dividend Period"),
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and for each dividend period commencing on each March 1, June 1, September 1
and December 1 thereafter, and ending on and including the day next preceding
the first day of the next dividend period (such Initial Dividend Period and
each of such other periods being hereinafter referred to as a "Dividend
Period") at a rate per annum equal to the Applicable Rate (as defined below) in
respect of such Dividend Period. The amount of dividends per share payable for
the Initial Dividend Period and for any portion of any other Dividend Period
less than a full Dividend Period shall be computed on the basis of a 360-day
year consisting of twelve 30-day months and the actual number of days elapsed
in the Dividend Period for which the dividends are payable, and by multiplying
the Applicable Rate by $2,500.
Dividends will accrue from the date of original issuance and will be payable
when, as and if declared by the Board of Directors of the Corporation, out of
funds legally available therefor, quarterly on each March 1, June 1, September
1 and December 1 in each year, commencing June 1, 1994 (each, a "Dividend
Payment Date"), to the holders of record on such respective dates, not
exceeding 30 days preceding the related Dividend Payment Date, as may be
determined by the Board of Directors of the Corporation, or a duly authorized
committee of the Board of Directors, in advance of such Dividend Payment Date.
To the extent not declared and paid for any past Dividend Periods, dividends
may be declared and paid at any time, without reference to any regular Dividend
Payment Date, to holders of record on such date, not exceeding 30 days
preceding the payment date therefor, as may be fixed by the Board of Directors
of the Corporation, or a duly authorized committee of the Board of Directors.
No interest, or sum of money in lieu of interest, shall be payable in respect
of any dividend that is not paid when it accrues.
No dividend will be declared and paid or set apart for payment on any share
of Series Q Preferred Stock or any share of any other series of series
preferred stock or any share of any class of stock, or series thereof, ranking
on a parity with the Series Q Preferred Stock as to dividends, for any Dividend
Period unless at the same time a like proportionate dividend for the same
Dividend Period, ratably in proportion to the respective dividends applicable
thereto (adjusted in the case of the Initial Dividend Period to reflect the
length of such period), shall be declared and paid or set apart for payment on
all shares of Series Q Preferred Stock and all shares of all other series of
series preferred stock and all shares of any class, or series thereof, ranking
on a parity with Series Q Preferred Stock as to dividends, then issued and
outstanding and entitled to receive dividends. Except as herein provided,
holders of shares of Series Q Preferred Stock will not be entitled to any
dividend, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on the Series Q Preferred Stock.
So long as any shares of Series Q Preferred Stock are outstanding, unless the
full cumulative dividends on all outstanding shares of Series Q Preferred Stock
have been declared and paid or set apart for payment for all past Dividend
Periods and except as provided in the immediately preceding paragraph, (i) no
dividend (other than a dividend in Common Stock or in any other stock of the
Corporation ranking junior to the Series Q Preferred Stock as to dividends and
distribution of assets upon liquidation, dissolution or winding up) may be
declared and paid or set aside for payment, or other distribution declared or
made, on the Common Stock or on any other stock ranking junior to or on a
parity with the Series Q Preferred Stock as to dividends or distribution of
assets upon liquidation, dissolution or winding up, and (ii) no shares of
Common Stock or shares of any other stock of the Corporation ranking junior to
or on a parity with the Series Q Preferred Stock as to dividends or
distribution of assets upon liquidation, dissolution or winding up will be
redeemed, purchased or otherwise acquired for any consideration by the
Corporation or any subsidiary of the Corporation (nor may any moneys be paid to
or made available for a sinking or other fund for the redemption, purchase or
other acquisition of any shares of any such stock), other than by conversion
into or exchange for Common Stock or any other stock of the Corporation ranking
junior to the Series Q Preferred Stock as to dividends and distribution of
assets upon liquidation, dissolution or winding up. The cutting-off of
dividends on the Common Stock and other stock junior to the Series Q Preferred
Stock and the limitations on redemptions and other acquisitions of such stock
until the arrearages have been paid or provided for, as outlined above, and the
right to vote for the election of directors described below under "Voting
Rights" shall be the only consequences of the failure to declare or pay
dividends on the Series Q Preferred Stock.
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After payment in full of all dividend arrearages on the Series Q Preferred
Stock, dividends on the Common Stock and such other junior stock may be
declared and paid out of funds legally available for that purpose as the Board
of Directors may determine.
APPLICABLE RATE
The dividend rate per annum referred to above for any Dividend Period (the
"Applicable Rate") will be equal to (i) in the case of the Initial Dividend
Period, 5.90% per annum (which is equivalent to $.2581 per Depositary Share)
and (ii) in the case of any subsequent Dividend Period, 85% of the Effective
Rate (as defined below), but not less than 4 1/2% per annum, or more than 10
1/2% per annum. The "Effective Rate" for any Dividend Period will be equal to
the highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Thirty Year Constant Maturity Rate (each as defined below under "Three-way
Pricing Index") for the Dividend Period. In the event that the Corporation
determines in good faith that for any reason:
(i) any one of the Treasury Bill Rate, the Ten Year Constant Maturity
Rate and the Thirty Year Constant Maturity Rate cannot be determined for
any Dividend Period, then the Effective Rate for such Dividend Period will
be equal to the higher of whichever two such rates can be so determined;
(ii) only one of the Treasury Bill Rate, the Ten Year Constant Maturity
Rate and the Thirty Year Constant Maturity Rate can be determined for any
Dividend Period, then the Effective Rate for such Dividend Period will be
equal to whichever such rate can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten Year Constant Maturity Rate
and the Thirty Year Constant Maturity Rate can be determined for any
Dividend Period, then the Effective Rate for the preceding Dividend Period
will be continued for such Dividend Period.
THREE-WAY PRICING INDEX. Except as described below in this paragraph, the
"Treasury Bill Rate" for each Dividend Period will be the arithmetic average of
the two most recent weekly per annum market discount rates (or the one weekly
per annum market discount rate, if only one such rate is published during the
relevant Calendar Period (as defined below)) for three-month U.S. Treasury
bills, as published weekly by the Federal Reserve Board (as defined below)
during the Calendar Period immediately preceding the last ten calendar days
preceding the Dividend Period for which the dividend rate on the Series Q
Preferred Stock is being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum market discount rate during any
such Calendar Period, then the Treasury Bill Rate for such Dividend Period will
be the arithmetic average of the two most recent weekly per annum market
discount rates (or the one weekly per annum market discount rate, if only one
such rate is published during the relevant Calendar Period) for three-month
U.S. Treasury bills, as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency selected by
the Corporation. In the event that a per annum market discount rate for three-
month U.S. Treasury bills is not published by the Federal Reserve Board or by
any Federal Reserve Bank or by any U.S. Government department or agency during
such Calendar Period, then the Treasury Bill Rate for such Dividend Period will
be the arithmetic average of the two most recent weekly per annum market
discount rates (or the one weekly per annum market discount rate, if only one
such rate is published during the relevant Calendar Period) for all of the U.S.
Treasury bills then having remaining maturities of not less than 80 nor more
than 100 days, as published during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board does not publish such rates, by any
Federal Reserve Bank or by any U.S. Government department or agency selected by
the Corporation. In the event that the Corporation determines in good faith
that for any reason no such U.S. Treasury bill rates are published as provided
above during such Calendar Period, then the Treasury Bill Rate for such
Dividend Period will be the arithmetic average of the per annum market discount
rates based upon the closing bids during such Calendar Period for each of the
issues of marketable noninterest-bearing U.S. Treasury
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securities with a remaining maturity of not less than 80 nor more than 100 days
from the date of each such quotation, as chosen and quoted daily for each
business day in New York City (or less frequently if daily quotations are not
generally available) to the Corporation by at least three recognized dealers in
U.S. Government securities selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the Corporation cannot
determine the Treasury Bill Rate for any Dividend Period as provided above in
this paragraph, the Treasury Bill Rate for such Dividend Period will be the
arithmetic average of the per annum market discount rates based upon the
closing bids during such Calendar Period for each of the issues of marketable
interest-bearing U.S. Treasury securities with a remaining maturity of not less
than 80 nor more than 100 days, as chosen and quoted daily for each business
day in New York City (or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized dealers in U.S.
Government securities selected by the Corporation.
Except as described below in this paragraph, the "Ten Year Constant Maturity
Rate" for each Dividend Period will be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (as defined below) (or the one
weekly per annum Ten Year Average Yield, if only one such yield is published
during the relevant Calendar Period), as published weekly by the Federal
Reserve Board during the Calendar Period immediately preceding the last ten
calendar days preceding the Dividend Period for which the dividend rate on the
Series Q Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Ten Year Average Yield
during such Calendar Period, then the Ten Year Constant Maturity Rate for such
Dividend Period will be the arithmetic average of the two most recent weekly
per annum Ten Year Average Yields (or the one weekly per annum Ten Year Average
Yield, if only one such yield is published during the relevant Calendar
Period), as published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that a per annum Ten Year Average Yield is not
published by the Federal Reserve Board or by any Federal Reserve Bank or by any
U.S. Government department or agency during such Calendar Period, then the Ten
Year Constant Maturity Rate for such Dividend Period will be the arithmetic
average of the two most recent weekly per annum average yields to maturity (or
the one weekly per annum average yield to maturity, if only one such yield is
published during the relevant Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than Special
Securities (as defined below)) then having remaining maturities of not less
than eight nor more than twelve years, as published during such Calendar Period
by the Federal Reserve Board or, if the Federal Reserve Board does not publish
such yields, by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. In the event that the Corporation
determines in good faith that for any reason the Corporation cannot determine
the Ten Year Constant Maturity Rate for any Dividend Period as provided above
in this paragraph, then the Ten Year Constant Maturity Rate for such Dividend
Period will be the arithmetic average of the per annum average yields to
maturity based upon the closing bids during such Calendar Period for each of
the issues of actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final maturity date not less
than eight nor more than twelve years from the date of each such quotation, as
chosen and quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to the Corporation
by at least three recognized dealers in U.S. Government securities selected by
the Corporation.
Except as described below in this paragraph, the "Thirty Year Constant
Maturity Rate" for each Dividend Period will be the arithmetic average of the
two most recent weekly per annum Thirty Year Average Yields (as defined below)
(or the one weekly per annum Thirty Year Average Yield, if only one such yield
is published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately preceding the last
ten calendar days preceding the Dividend Period for which the dividend rate on
the Series Q Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Thirty Year Average
Yield during such Calendar Period, then the Thirty Year Constant Maturity Rate
for such Dividend Period will be the arithmetic average of the two most recent
weekly per annum Thirty Year Average Yields (or the one weekly per annum Thirty
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Year Average Yield, if only one such yield is published during the relevant
Calendar Period), as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency selected by
the Corporation. In the event that a per annum Thirty Year Average Yield is not
published by the Federal Reserve Board or by any Federal Reserve Bank or by any
U.S. Government department or agency during such Calendar Period, then the
Thirty Year Constant Maturity Rate for such Dividend Period will be the
arithmetic average of the two most recent weekly per annum average yields to
maturity (or the one weekly per annum average yield to maturity, if only one
such yield is published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) then having remaining maturities of not less than
twenty-eight nor more than thirty years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal Reserve Board does not
publish such yields, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the Corporation cannot
determine the Thirty Year Constant Maturity Rate for any Dividend Period as
provided above in this paragraph, then the Thirty Year Constant Maturity Rate
for such Dividend Period will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) with a final maturity
date not less than twenty-eight nor more than thirty years from the date of
each such quotation, as chosen and quoted daily for each business day in New
York City (or less frequently if daily quotations are not generally available)
to the Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty
Year Constant Maturity Rate will each be rounded to the nearest five hundredths
of a percent.
The Effective Rate with respect to each Dividend Period (other than the
Initial Dividend Period) will be calculated as promptly as practicable by the
Corporation according to the appropriate method described above. The
Corporation will cause each Applicable Rate to be published in a newspaper of
general circulation in New York City before the commencement of the Dividend
Period to which it applies and will cause notice of such Applicable Rate to be
enclosed with the dividend payment checks next mailed to the holders of Series
Q Preferred Stock.
As used above, the term "Calendar Period" means a period of fourteen calendar
days; the term "Federal Reserve Board" means the Board of Governors of the
Federal Reserve System; the term "Special Securities" means securities which
can, at the option of the holder, be surrendered at face value in payment of
any Federal estate tax or which provide tax benefits to the holder and are
priced to reflect such tax benefits or which were originally issued at a deep
or substantial discount; the term "Ten Year Average Yield" means the average
yield to maturity for actively traded marketable U.S. Treasury fixed interest
rate securities (adjusted to constant maturities of ten years); and the term
"Thirty Year Average Yield" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of thirty years).
VOTING RIGHTS
Whenever, at any time or times, dividends payable on shares of Series Q
Preferred Stock are in arrears in an amount equivalent to dividends for six
full Dividend Periods, then, immediately upon the happening of such event, the
number of directors of the Corporation will be increased by two and the holders
of outstanding shares of Series Q Preferred Stock will have the right, voting
together as a single class with holders of shares of any other series of series
preferred stock then outstanding and upon which like voting rights have been
conferred and are then exercisable, to the exclusion of (a) the holders of the
Common Stock, (b) the holders of any other series of series preferred stock
upon which such voting rights have not been conferred or are not
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then exercisable, and (c) the holders of any other stock of the Corporation
having general voting rights, to vote for the election of two members of the
Board of Directors of the Corporation to fill such newly created directorships,
until all dividends in arrears on the Series Q Preferred Stock have been
declared and paid or set apart for payment in full. The right of the holders of
Series Q Preferred Stock to elect members of the Board of Directors of the
Corporation as aforesaid will continue until such time as all dividends in
arrears on the Series Q Preferred Stock have been declared and paid or set
apart for payment in full, at which time such right will terminate, except as
set forth in the Certificate of Amendment of the Corporation's Restated
Certificate of Incorporation, as amended, or by law expressly provided, subject
to revesting in the event of each and every subsequent arrearage in the amount
above mentioned. Upon any termination of the right of such holders to elect
directors as herein described, the term of office of all directors then in
office elected thereby, and the vacancies created pursuant to the Certificate
of Amendment of the Restated Certificate of Incorporation, as amended, and
described above, will terminate immediately. Any director who has been so
elected may be removed at any time, with or without cause, and any vacancy
thereby created may be filled, only by the affirmative vote of the holders of
Series Q Preferred Stock voting together as a single class with the holders of
shares of any other series of series preferred stock entitled to vote for such
director. If the office of any director elected as described above becomes
vacant for any reason other than removal from office, the remaining director
may choose a successor who will hold office for the remainder of such unexpired
term.
So long as any shares of Series Q Preferred Stock shall be outstanding,
unless the vote or consent of the holders of a greater number of shares shall
then be required by law, the affirmative vote or consent of the holders of (a)
at least 66 2/3% of the shares of the Series Q Preferred Stock and (b) the
holders of at least a majority of the shares of the Series Q Preferred Stock
and of any other series of series preferred stock then outstanding upon which
like voting rights have been conferred and are then exercisable, voting
together as a single class, in each case given in person or by proxy either in
writing or by resolution at any special or annual meeting called for the
purpose, shall be necessary to authorize, permit, effect or validate any one or
more of the following: (i) the authorization or any increase in the authorized
amount of any class of stock, or the establishment or designation of any series
of stock (unless the class of which such series is a part has been authorized
previously pursuant to this paragraph), or the issuance or sale of any
obligation, security or instrument convertible into, exchangeable for, or
evidencing the right to purchase, acquire or subscribe for shares of a class or
series of stock, if such class or series of stock ranks prior to the Series Q
Preferred Stock as to dividends or distribution of assets upon liquidation,
dissolution or winding up (unless the class or series has been authorized
previously pursuant to this paragraph), and (ii) the amendment, alteration or
repeal, whether by merger, consolidation or otherwise, of any of the provisions
of the Restated Certificate of Incorporation, as amended, as amended by the
Certificate of Amendment relating to the Series Q Preferred Stock, which would
materially and adversely affect any right, preference, privilege or voting
rights of the series preferred stock then outstanding; provided, however, that
in the event that any such amendment, alteration or repeal would materially and
adversely affect the rights of only the Series Q Preferred Stock, then such
amendment, alteration or repeal may be effected only with the affirmative vote
or consent of the holders of 66 2/3% of the shares of Series Q Preferred Stock
then outstanding; provided, further, that the authorization, establishment,
designation, issuance or sale of other series preferred stock shall not have,
or be deemed to have, such material adverse effect; and, provided, further,
however, that an increase in the authorized amount of series preferred stock,
or the authorization, establishment, designation, issuance or sale of any
shares of stock that do not rank prior to the series preferred stock as to
dividends or distribution of assets upon liquidation, dissolution or winding
up, shall not have, or be deemed to have, such material adverse effect.
In addition, unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the affirmative vote or consent of the
holders of at least a majority of the shares of Series Q Preferred Stock and
any other series of series preferred stock then outstanding upon which like
voting rights have been conferred and are then exercisable, voting together as
a single class, given in person or by proxy either in writing or by resolution
at any special or annual meeting called for the purpose, shall be necessary to
authorize an increase in the authorized amount of the series or serial
preferred stock or the creation of a class of stock that would rank pari passu
with the series or serial preferred stock as to dividends or distribution of
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assets upon liquidation, dissolution or winding up, or to authorize, permit,
effect or validate the voluntary liquidation, dissolution or winding up of the
Corporation; provided, however, that a consolidation or merger of the
Corporation with or into another corporation or corporations, or a sale, lease
or conveyance, whether for cash, shares of stock, securities or properties, of
all or substantially all or any part of the assets of the Corporation, shall
not be deemed or construed to be a liquidation, dissolution or winding up of
the Corporation within the meaning of this paragraph.
The foregoing voting provisions will not apply if, in connection with the
matters specified, provision is made for the redemption or retirement of all
outstanding Series Q Preferred Stock.
Holders of Series Q Preferred Stock, and the holders of shares of any other
series of series preferred stock of the Corporation upon which like voting
rights have been conferred and are then exercisable (other than the
Corporation's Series C Junior Participating Preferred Stock), shall be entitled
to one vote for each share of such stock held on matters as to which holders
shall be entitled to vote.
Under regulations adopted by the Federal Reserve Board, if the holders of
shares of Series Q Preferred Stock become entitled to vote for the election of
directors because dividends on such shares are in arrears, the Series Q
Preferred Stock may then be deemed a "class of voting securities" and a holder
of 25% or more of the shares of such series (or a holder of 5% or more if it
otherwise exercises a "controlling influence" over the Corporation) may then be
subject to regulation as a bank holding company in accordance with the Bank
Holding Company Act of 1956, as amended. In addition, at such time (i) any bank
holding company may be required to obtain the approval of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") under the
Bank Holding Company Act of 1956, as amended, to acquire or retain 5% or more
of the Series Q Preferred Stock and (ii) any person other than a bank holding
company may be required to obtain the approval of the Federal Reserve Board
under the Change in Bank Control Act to acquire 10% or more of the Series Q
Preferred Stock.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of shares of Series Q Preferred
Stock will be entitled to receive out of assets of the Corporation available
for distribution to shareholders, before any payment or distribution is made on
the Common Stock or on any other class or series of stock of the Corporation
ranking junior to the Series Q Preferred Stock, upon liquidation, dissolution
or winding up, liquidating distributions in the amount of $2,500 per share
(which is equivalent to $25 per Depositary Share) plus, in each case, an amount
equal to accrued and unpaid dividends (whether or not declared) to the date of
final distribution. After such payment, the holders of Series Q Preferred Stock
will be entitled to no other payments. If, in such case, the assets of the
Corporation or proceeds thereof shall be insufficient to make the full
liquidating payment on the Series Q Preferred Stock and liquidating payments on
any other outstanding series preferred stock (including accrued and unpaid
dividends, if any), then such assets and proceeds shall be distributed among
the holders of Series Q Preferred Stock and any other outstanding series of
series preferred stock, ratably in accordance with the respective amounts which
would be payable on all series preferred stock (including accrued and unpaid
dividends, if any) if all such liquidating amounts payable were paid in full. A
consolidation or merger of the Corporation with or into another corporation or
corporations or a sale, lease or conveyance whether for cash, shares of stock,
securities or properties, of all or substantially all or any part of the assets
of the Corporation shall not be deemed or construed to be a liquidation,
dissolution or winding up of the Corporation.
REDEMPTION
Shares of Series Q Preferred Stock are not redeemable prior to March 1, 1999.
On or after such date, the shares of Series Q Preferred Stock will be
redeemable at the option of the Corporation, as a whole or in part, at any time
or from time to time on not less than 30 nor more than 60 days' notice, at the
redemption price of $2,500 per share (which is equivalent to $25 per Depositary
Share) plus, in each case, an amount equal to accrued and unpaid dividends
(whether or not declared) to the date fixed for redemption.
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Upon mailing of notice, dividends on the shares of Series Q Preferred Stock
called for redemption will cease to accrue from and after the date fixed for
redemption (unless default shall be made by the Corporation in providing funds
for the payment of the redemption price), and such shares will no longer be
deemed to be outstanding. All rights of the holders of such shares as holders
of Series Q Preferred Stock (except the right to receive the redemption price,
but without interest) shall cease. The Corporation's obligation to provide
funds in accordance with the preceding sentence will be deemed fulfilled if, on
or before 12:00 noon, New York City time on the date fixed for redemption, the
Corporation deposits with a paying agent (which may be an affiliate of the
Corporation) (a "Paying Agent"), which shall be a bank or trust company
organized and in good standing under the laws of the United States or the State
of New York, having an office or agency in the Borough of Manhattan, The City
of New York, and having, together with its corporate parent, capital, surplus
and undivided profits aggregating at least $50,000,000, funds necessary for
such redemption, in trust, with irrevocable instructions and authorization that
such funds be applied to the redemption of the shares of Series Q Preferred
Stock called for redemption upon surrender of certificates for such shares
(properly endorsed or assigned for transfer). If fewer than all the outstanding
shares of the Series Q Preferred Stock are to be redeemed, the selection of the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors of the Corporation.
Any interest accrued on funds deposited with a Paying Agent in connection
with any redemption of shares of Series Q Preferred Stock will be paid to the
Corporation from time to time and the holders of any such shares to be redeemed
with such money will have no claim to any such interest. Any funds deposited
and unclaimed at the end of two years from any redemption date will be repaid
or released to the Corporation, after which the holder or holders of shares of
Series Q Preferred Stock so called for redemption shall look only to the
Corporation for payment of the redemption price, without any interest thereon.
In no event will the Corporation redeem, purchase or otherwise acquire for
consideration fewer than all the outstanding shares of Series Q Preferred Stock
unless full cumulative dividends have been declared and paid or set apart for
payment on all outstanding shares of Series Q Preferred Stock for all prior
Dividend Periods; provided, however, that the foregoing will not prevent, if
otherwise permitted, the purchase or acquisition of shares of Series Q
Preferred Stock pursuant to a tender or exchange offer made on the same terms
to holders of all the outstanding shares of Series Q Preferred Stock and mailed
to the holders of record of all such outstanding shares at such holders'
addresses as the same appear on the books of the Corporation; and provided
further that if some, but fewer than all, of the shares of Series Q Preferred
Stock are to be purchased or otherwise acquired pursuant to such tender or
exchange offer and the number of shares so tendered exceeds the number of
shares so to be purchased or otherwise acquired by the Corporation, the shares
of Series Q Preferred Stock tendered will be purchased or otherwise acquired by
the Corporation on a pro rata basis (with adjustments to eliminate fractions)
according to the number of such shares tendered by each holder tendering shares
of Series Q Preferred Stock for such purchase or exchange.
At the option of the Corporation, shares of Series Q Preferred Stock redeemed
or otherwise acquired may be restored to the status of authorized but unissued
shares of series preferred stock.
Any optional redemption by the Corporation will be with the approval of the
Federal Reserve Board unless at the time the Federal Reserve Board determines
that its approval is not required.
MISCELLANEOUS
Harris Trust Company of New York will serve as transfer agent, dividend
disbursing agent and registrar for the Series Q Preferred Stock. The holders of
Series Q Preferred Stock will not have any preemptive rights to purchase or
subscribe for any shares of any class or other securities of any type of the
Corporation. When issued, the Series Q Preferred Stock will be fully paid and
nonassessable. The Certificate of Amendment of the Restated Certificate of
Incorporation, as amended, of the Corporation setting forth the provisions of
the Series Q Preferred Stock will become effective after the date of this
Prospectus Supplement but on or before issuance of the Series Q Preferred
Stock.
S-16
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following brief description of certain Federal income tax considerations
of the ownership of Depositary Shares representing the Series Q Preferred Stock
reflects the opinion of Sullivan & Cromwell, special tax counsel to the
Corporation. Hereinafter, references in this section to Series Q Preferred
Stock will mean either the Series Q Preferred Stock or Depositary Shares
representing the Series Q Preferred Stock, as the case may be. This description
is a summary only, and each purchaser of Series Q Preferred Stock offered by
this Prospectus Supplement and the accompanying Prospectus should consult his
own tax adviser as to the tax consequences to him of acquiring, holding and
disposing of shares of Series Q Preferred Stock in his particular
circumstances, including the effect of the alternative minimum tax and the
application of state, local and other tax laws.
Owners of the Depositary Shares will be treated for Federal income tax
purposes as if they were owners of the Series Q Preferred Stock represented by
such Depositary Shares and, accordingly, must take into account for Federal
income tax purposes the income and deductions to which they would be entitled
if they were holders of such Series Q Preferred Stock.
Dividends declared and paid by the Corporation with respect to the Series Q
Preferred Stock will be dividends for Federal income tax purposes to the extent
of the current or accumulated earnings and profits of the Corporation as
determined for Federal income tax purposes. Accordingly, such dividends will be
eligible for the 70% dividends-received deduction allowed to corporate
shareholders. In determining entitlement to the dividends-received deduction,
corporate holders of shares of Series Q Preferred Stock should consider the
effects of (i) Section 246(c) of the Internal Revenue Code of 1986, as amended
(the "Code"), which, among other things, disallows the dividends-received
deduction in respect of any dividend on a share of stock held or deemed held
for 45 days or less; (ii) Section 246A of the Code, which reduces the
dividends-received deduction allowed to a corporate shareholder that has
indebtedness "directly attributable" to an investment in portfolio stock; and
(iii) Section 1059 of the Code, which, under certain circumstances, reduces the
tax basis of stock, for the purposes of calculating gain or loss in a
subsequent disposition, by the portion of any "extraordinary dividend" eligible
for the dividends-received deduction.
Dividends on the Series Q Preferred Stock will not be increased following any
reduction in or elimination of the 70% dividends-received deduction.
EXPERTS
The consolidated financial statements of the Corporation appearing in the
Annual Report on Form 10-K for the year ended December 31, 1993, incorporated
by reference in this Prospectus Supplement, the accompanying Prospectus and the
Registration Statement, have been audited by Ernst & Young, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in auditing and accounting.
S-17
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Corporation has agreed to sell to each of the Underwriters named below, and
each of such Underwriters has severally agreed with the Corporation to
purchase, the number of Depositary Shares set forth opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER DEPOSITARY SHARES
----------- -----------------
<S> <C>
Lehman Brothers Inc........................................ 5,080,000
Smith Barney Shearson Inc. ................................ 2,920,000
-----------
Total Number of Depositary Shares...................... 8,000,000
===========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Depositary Shares
offered hereby, if any are taken.
The Underwriters have advised the Corporation that they propose to offer all
or part of the Depositary Shares directly to the public at the price to public
set forth on the cover page of this Prospectus Supplement, and in part to
certain dealers, at such price less a concession not in excess of $.50 per
Depositary Share. The Underwriters may allow and such dealers may reallow
discounts not in excess of $.25 per Depositary Share to certain other dealers.
After the initial public offering, the price and concessions may be changed.
The Depositary Shares are offered subject to receipt and acceptance by the
Underwriters and to certain other conditions, including the right to reject
orders in whole or in part.
The Depositary Shares are a new issue of securities with no established
trading market. Application has been made to list the Depositary Shares on the
New York Stock Exchange. There can be no assurance that the Depositary Shares
will be so listed or will continue to be listed. Although the Corporation has
been advised by the Underwriters that they may from time to time purchase
Depositary Shares in the secondary market, they are not obligated to do so and
may discontinue market-making at any time without notice. Consequently, there
can be no assurance as to the liquidity of the trading market for the
Depositary Shares.
The Corporation has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
This Prospectus Supplement and the accompanying Prospectus may also be
delivered in connection with sales of the Depositary Shares by affiliates of
the Corporation that have acquired such Depositary Shares.
Underwriters and certain of their associates and affiliates may be customers
of (including borrowers from), engage in transactions with, and/or perform
services for the Corporation and its subsidiaries (including Bankers) in the
ordinary course of business.
Vernon E. Jordan Jr., a member of the board of directors of the Corporation,
is also a member of the board of directors of American Express Company, which
is the parent of Lehman Brothers Inc., one of the Underwriters.
S-18
<PAGE>
PROSPECTUS
- ----------
U.S.$1,000,000,000
LOGO BANKERS TRUST NEW YORK CORPORATION
DEBT SECURITIES AND SERIES PREFERRED STOCK
Bankers Trust New York Corporation (the "Corporation") may offer from time to
time up to U.S.$1,000,000,000 aggregate principal amount, or its equivalent
(based on the applicable exchange rate at the time of offering) in such foreign
currencies, or units of two or more thereof, as shall be designated by the
Corporation at the time of offering, of one or more series of debt securities
(the "Debt Securities") or one or more series of its series preferred stock,
without par value (the "Series Preferred Stock"), interests in which may be
represented by depositary shares (the "Depositary Shares"). If Debt Securities
are issued at an original issue discount, the Corporation may issue such higher
principal amount as may be sold for an initial public offering price of up to
U.S.$1,000,000,000, or its equivalent (based on the applicable exchange rate at
the time of offering) in such foreign currencies, or units of two or more
thereof, as shall be designated by the Corporation at the time of offering. The
Debt Securities may be senior debt securities (the "Senior Debt Securities") or
subordinated debt securities (the "Subordinated Debt Securities"). Debt
Securities, Series Preferred Stock and Depositary Shares (collectively, the
"Offered Securities") will be offered on terms to be determined at the time of
offering. The specific title, the aggregate principal amount, the purchase
price, the maturity, the rate and time of payment of any interest, any
redemption provisions, any terms of conversion or exchange and any other
specific terms of the Debt Securities in respect of which this Prospectus is
being delivered are set forth in the accompanying supplement to this Prospectus
(the "Prospectus Supplement"). If Series Preferred Stock is offered, the
Prospectus Supplement will set forth the specific title, number of shares of
Series Preferred Stock and number of Depositary Shares, if any, any dividend,
liquidation, redemption, conversion, voting or other rights, the initial public
offering price and any other terms of the offering.
The Offered Securities may be sold by the Corporation directly or through
agents or dealers. In addition, the Offered Securities may be sold to or
through underwriting syndicates led by one or more managing underwriters or
through one or more underwriters acting alone pursuant to offering terms fixed
at the time of offering. The agents and dealers or underwriters in connection
with the sale of any Offered Securities will be set forth in the applicable
Prospectus Supplement.
The Senior Debt Securities, when issued, will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Corporation. The Subordinated
Debt Securities, when issued, will be unsecured and subordinated as described
herein under "Description of Debt Securities--Subordination--Subordinated Debt
Securities." Payment of the principal of the Subordinated Debt Securities may
be accelerated only in the case of certain events involving the bankruptcy,
insolvency or reorganization of the Corporation. There is no right of
acceleration of payment of Subordinated Debt Securities in the case of a
default in the performance of any covenant of the Corporation, including the
payment of principal or interest. See "Description of Debt Securities--Events
of Default--Subordinated Debt Securities."
FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING, NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT.
THE OFFERED SECURITIES WILL NOT BE DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND
WILL NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is October 15, 1993.
<PAGE>
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Corporation can be inspected
and copied at the Commission's office at 450 Fifth Street, N.W., Washington,
D.C. 20549, and the Commission's Regional Offices in New York (Seven World
Trade Center, 13th Floor, New York, New York 10048) and Chicago (500 West
Madison Street, Suite 1400, Chicago, Illinois 60661), and copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, such material can be inspected at the office of the New York Stock
Exchange and the office of the American Stock Exchange. This Prospectus does
not contain all of the information set forth in the Registration Statement, of
which this Prospectus is a part which the Corporation has filed with the
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference in this Prospectus the
following documents:
(a) The Corporation's Annual Report on Form 10-K (file number 1-5920) for
the year ended December 31, 1992, filed pursuant to Section 13 of the
Exchange Act;
(b) The Corporation's Quarterly Reports on Form 10-Q (file number 1-5920)
for the quarters ended March 31 and June 30, 1993, filed pursuant to
Section 13 of the Exchange Act; and
(c) The Corporation's Current Reports on Form 8-K (file number 1-5920)
dated January 14, January 15, January 25, March 19, April 20, May 25, June
24, July 22, July 26, August 6 and September 24, 1993, filed pursuant to
Section 13 of the Exchange Act.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Offered Securities shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein or in
any accompanying Prospectus Supplement modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Any person who receives a copy of this Prospectus may obtain without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (unless such
exhibits are specifically incorporated by reference herein). Written requests
should be mailed to the Office of the Secretary, Bankers Trust New York
Corporation, 280 Park Avenue, New York, New York, 10017. Telephone requests may
be directed to (212) 454-4022.
----------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT, IN CONNECTION WITH THE
OFFERING CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION. THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH THEY RELATE OR
AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER WOULD BE
UNLAWFUL OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE THEREOF OR, IN THE CASE OF INFORMATION
INCORPORATED HEREIN BY REFERENCE, THE DATE OF FILING WITH THE COMMISSION.
2
<PAGE>
BANKERS TRUST NEW YORK CORPORATION
GENERAL
The Corporation is a bank holding company incorporated under the laws of the
State of New York in 1965. At June 30, 1993, the Corporation had consolidated
total assets of $84.0 billion. The Corporation's principal banking subsidiary
is Bankers Trust Company ("Bankers"). Bankers, founded in 1903, is among the
largest commercial banks in New York City and the United States, based on
consolidated total assets. The Corporation concentrates its financial and
managerial resources on selected markets and services its clients by meeting
their needs for financing, processing and sophisticated risk management
solutions. The core business organizations of the Corporation are Financial
Services and Global Assets. Financial Services consists of Global Investment
Bank, Global Markets Proprietary and Global Emerging Markets. Other businesses
within Financial Services are real estate finance and principal investing.
Global Assets is comprised of Banks, Governments & Agencies, Corporations &
Financial Institutions, Retirement Services, Individual Services (Private
Banking, Mutual Funds and Brokerage), Investment Management and Information
Services. Bankers makes loans and other extensions of credit, accepts
deposits, arranges financing and provides numerous other commercial banking
and financial services. Bankers also provides a broad range of financial
advisory services to its clients, and engages in the proprietary trading of
currencies, securities, derivatives and commodities.
Because the Corporation is a holding company, the right of the Corporation,
and hence the right of creditors and shareholders of the Corporation, to
participate in any distribution of assets of any subsidiary, including
Bankers, upon its liquidation or reorganization or otherwise is necessarily
subject to the prior claims of creditors of the subsidiary, except to the
extent that claims of the Corporation itself as a creditor of the subsidiary
may be recognized.
The Corporation's principal executive offices are located at 280 Park
Avenue, New York, New York 10017, and its telephone number is (212) 250-2500.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
------------------------ ENDED
1988 1989 1990 1991 1992 JUNE 30, 1993
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on Deposits........... 1.49 0.67 1.30 1.40 1.44 1.47
Including Interest on Deposits........... 1.25 0.83 1.16 1.22 1.28 1.31
</TABLE>
For purposes of computing these consolidated ratios, earnings represent
income (loss) before income taxes, cumulative effects of accounting changes
and equity in undistributed income of unconsolidated subsidiaries and
affiliates, plus fixed charges excluding capitalized interest. Fixed charges
represent all interest expense (ratios are presented both excluding and
including interest on deposits), the portion of net rental expense that is
deemed representative of the interest factor, the amortization of debt
issuance expense and capitalized interest. For the year ended December 31,
1989, earnings, as defined, did not cover fixed charges, excluding and
including interest on deposits, by $834 million as a result of the 1989
special provision for refinancing country credit losses of $1.6 billion.
CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
------------------------ ENDED
1988 1989 1990 1991 1992 JUNE 30, 1993
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on Deposits........... 1.49 0.67 1.28 1.37 1.41 1.44
Including Interest on Deposits........... 1.25 0.82 1.15 1.21 1.26 1.30
</TABLE>
For purposes of computing these consolidated ratios, earnings represent
income (loss) before income taxes, cumulative effects of accounting changes
and equity in undistributed income of unconsolidated subsidiaries and
affiliates, plus fixed charges excluding capitalized interest. Fixed charges
represent all interest expense (ratios are presented both excluding and
including interest on deposits), the portion of net rental expense that is
deemed representative of the interest factor, the amortization of debt
issuance expense and capitalized interest. Fixed charges are then combined
with preferred stock dividend requirements, adjusted to a pretax basis, on
outstanding preferred stock. For the year ended December 31, 1989, earnings,
as defined, did not cover combined fixed charges and preferred stock dividend
requirements, excluding and including interest on deposits, by $843 million as
a result of the 1989 special provision for refinancing country credit losses
of $1.6 billion.
3
<PAGE>
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for general
corporate purposes, including investments in, or extensions of credit to, the
Corporation's subsidiaries. Except as described in the applicable Prospectus
Supplement, specific allocations of the proceeds to such purposes have not been
made, although management will have determined at the date of the applicable
Prospectus Supplement that funds should be borrowed at that time. The precise
amount and timing of such investments in, or extensions of credit to,
subsidiaries will depend on the subsidiaries' funding requirements and the
availability of other funds. Pending such applications, such net proceeds may
be temporarily invested or applied to the reduction of short-term indebtedness.
DESCRIPTION OF DEBT SECURITIES
Senior Debt Securities may be issued from time to time in one or more series
under an Indenture, dated as of November 1, 1991, as amended by the First
Supplemental Indenture, dated as of September 1, 1993 (as so supplemented, the
"Senior Indenture"), between the Corporation and The Chase Manhattan Bank
(National Association), as Trustee (the "Senior Trustee"). Subordinated Debt
Securities may be issued from time to time in one or more series under either
an Indenture, dated as of April 1, 1992, as amended by the First Supplemental
Indenture, dated as of January 15, 1993 (as so supplemented, the "First
Subordinated Indenture"), between the Corporation and Marine Midland Bank,
N.A., as Trustee (the "First Subordinated Trustee") or under an indenture (the
"Second Subordinated Indenture," and with the First Subordinated Indenture, the
"Subordinated Indentures"), to be entered into before the first issuance of
securities thereunder, between the Corporation and a trustee to be named in the
Prospectus Supplement applicable to the first series of Debt Securities to be
issued pursuant to such indenture (the "Second Subordinated Trustee," and with
the First Subordinated Trustee, the "Subordinated Trustees"). The Senior
Indenture and the Subordinated Indentures are sometimes referred to
collectively as the "Indentures," and the Senior Trustee and the Subordinated
Trustees are sometimes referred to collectively as the "Trustees." As used
under this caption, unless the context otherwise requires, "debt securities" in
lower case refers to all debt securities issued or issuable, as the case may
be, under the Indentures, and "Debt Securities" with a capital "D" refers to
the Debt Securities covered by this Prospectus and any accompanying Prospectus
Supplement. The statements under this caption are brief summaries of certain
provisions contained in the Indentures, do not purport to be complete, and are
qualified in their entirety by reference to the Indentures, including the
definitions therein of certain terms, copies of which are filed or incorporated
by reference as exhibits to the Registration Statement of which this Prospectus
is a part.
GENERAL
Each Indenture provides for the issuance of debt securities in one or more
series, and does not limit the principal amount of debt securities that may be
issued thereunder.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Debt Securities being offered hereby: (1) the specific title of
the Debt Securities; (2) whether the Debt Securities are Senior Debt Securities
or Subordinated Debt Securities; (3) the aggregate principal amount of the Debt
Securities; (4) the percentage of their principal amount at which the Debt
Securities will be issued; (5) the date on which the Debt Securities will
mature; (6) the rate or rates per annum or the method for determining such rate
or rates, if any, at which the Debt Securities will bear interest; (7) the time
or times at which any such interest will be payable; (8) any provisions
relating to optional or mandatory redemption of the Debt Securities; (9) the
denominations in which the Debt Securities are authorized to be issued; (10)
the place or places at which, the period or periods within which, the price or
prices at which and the terms and conditions, if any, upon which the Debt
Securities may be exchanged for or converted into other securities of the
Corporation, including capital securities; (11) the currency or units of two or
more currencies in which the Debt Securities are denominated, if other than
U.S. dollars, and the currency or units of two or more currencies in which
interest is payable if other than the currency in which the Debt Securities are
denominated; (12) the place or
4
<PAGE>
places at which the Corporation will make payments of principal (and premium,
if any) and interest, if any, and the method of such payment; (13) whether the
Debt Securities will be issued, in whole or in part, in the form of one or more
Global Debt Securities (as hereinafter defined) and, in such case, the
depository for such Debt Security or Debt Securities; (14) the person to whom
any Debt Security of such series will be payable, if other than the person in
whose name that Debt Security (or one or more Predecessor Securities (as
defined in the applicable Indenture)) is registered at the close of business on
the Regular Record Date (as defined in the applicable Indenture) for such
interest; (15) the extent to which, or the manner in which, any interest
payable on a Global Debt Security on an Interest Payment Date (as defined in
the applicable Indenture) will be paid; (16) any additional covenants and
Events of Default and the remedies with respect thereto not set forth in the
respective Indenture; and (17) any other specific terms of the Debt Securities.
SUBORDINATION
Subordinated Debt Securities
Unless otherwise indicated in the applicable Prospectus Supplement, the
Subordinated Debt Securities will be subject to the subordination provisions
set forth in the applicable Subordinated Indenture and described below.
The payment of the principal of, premium, if any, and interest on the
Subordinated Debt Securities will, to the extent set forth in the applicable
Subordinated Indenture, be subordinated in right of payment to the prior
payment in full of all Senior Indebtedness (as defined below). In certain
events of insolvency, the payment of the principal of, premium, if any, and
interest on the Subordinated Debt Securities will, to the extent set forth in
the applicable Subordinated Indenture, also be effectively subordinated in
right of payment to the prior payment in full of all Other Financial
Obligations (as defined below). Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshalling of assets or any
bankruptcy, insolvency or similar proceedings of the Corporation, the holders
of all Senior Indebtedness will first be entitled to receive payment in full of
all amounts due or to become due thereon before the holders of the Subordinated
Debt Securities will be entitled to receive any payment in respect of the
principal of, premium, if any, or interest on the Subordinated Debt Securities.
If upon any such payment or distribution of assets to creditors, there remain,
after giving effect to such subordination provisions in favor of the holders of
Senior Indebtedness, any amounts of cash, property or securities available for
payment or distribution in respect of Subordinated Debt Securities (as defined
in each Subordinated Indenture, "Excess Proceeds") and if, at such time, any
Entitled Persons (as defined below) in respect of Other Financial Obligations
have not received payment in full of all amounts due or to become due on or in
respect of such Other Financial Obligations, then such Excess Proceeds will
first be applied to pay or provide for the payment in full of such Other
Financial Obligations before any payment or distribution may be made in respect
of the Subordinated Debt Securities. In the event of the acceleration of the
maturity of any Subordinated Debt Securities, the holders of all Senior
Indebtedness will first be entitled to receive payment in full of all amounts
due thereon before the holders of the Subordinated Debt Securities will be
entitled to receive any payment upon the principal of, premium, if any, or
interest on the Subordinated Debt Securities. No payments on account of
principal of, premium, if any, or interest on the Subordinated Debt Securities
or on account of the purchase or acquisition of Subordinated Debt Securities
may be made if there has occurred and is continuing a default in any payment
with respect to Senior Indebtedness, or if any judicial proceeding is pending
with respect to any such default.
By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of insolvency, creditors of the Corporation who hold
obligations other than Senior Indebtedness and the Subordinated Debt Securities
may recover less in respect of such obligations, ratably, than holders of
Senior Indebtedness and may recover more in respect of such obligations,
ratably, than the holders of the Subordinated Debt Securities. By reason of the
obligation of the holders of the Subordinated Debt Securities to pay over any
Excess Proceeds to Entitled Persons in respect of Other Financial Obligations,
in the event of insolvency, holders of Existing
5
<PAGE>
Subordinated Indebtedness (as defined in the applicable Indenture) that are not
required to pay over Excess Proceeds may recover less, ratably, than Entitled
Persons in respect of Other Financial Obligations and may recover more,
ratably, than the holders of Subordinated Debt Securities.
Senior Indebtedness is defined in each Subordinated Indenture as the
principal of, premium, if any, and interest (including interest accruing
subsequent to the commencement of any proceeding for the bankruptcy or
reorganization of the Corporation) on (a) all indebtedness of the Corporation
for money borrowed, whether outstanding on the date of execution of such
Subordinated Indenture or thereafter created, assumed or incurred, except such
indebtedness as is by its terms expressly stated to be not superior in right of
payment to the Subordinated Debt Securities or to rank pari passu with the
Subordinated Debt Securities or is identified in a Board Resolution or any
indenture supplemental hereto as not superior in right of payment or to rank
pari passu with the Subordinated Debt Securities and (b) any deferrals,
renewals or extensions of any such indebtedness for money borrowed. Senior
Indebtedness does not, however, include any obligations on account of Existing
Subordinated Indebtedness. The term "indebtedness for money borrowed," when
used with respect to the Corporation, is defined to mean any obligation of, or
any obligation guaranteed by, the Corporation for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the purchase price
of property or assets.
"Existing Subordinated Indebtedness" means the Corporation's 7.50%
Convertible Capital Securities due 2033, Subordinated LIBOR/CMT Floating Rate
Debentures due 2003, 7 5/8% Convertible Capital Securities due 2033,
Subordinated Floating Rate Notes due 2005, Subordinated Constant Maturity
Treasury Floating Rate Debentures due 2003, 7.25% Subordinated Debentures due
January 15, 2003, Subordinated Floating Rate Notes due 2002, 7 1/8%
Subordinated Debentures due July 31, 2002, 8 1/8% Subordinated Debentures due
May 15, 2002, 7.50% Subordinated Debentures due January 15, 2002, 9.00%
Subordinated Debentures due August 1, 2001, 9.40% Subordinated Debentures due
March 1, 2001, 9.50% Subordinated Debentures due June 14, 2000, Zero Coupon
Subordinated Yen Notes due 1997-2004, Floating Rate Subordinated Notes due
March 2000, 10.20% Subordinated Debentures due March 15, 1999, 9.20%
Subordinated Capital Notes due July 15, 1999, Subordinated Money Market Capital
Notes, Series A, B and C due 1999, 8% Subordinated Debentures due March 15,
1997, 8 1/4% Subordinated Debentures due July 2, 1996 and the Corporation's
guaranty in respect of the 6.90% Subordinated Notes due March 1, 1995 of
Bankers and such other indebtedness as may be specified in the Prospectus
Supplement.
"Other Financial Obligations" means all obligations of the Corporation to
make payment pursuant to the terms of financial instruments, such as (i)
securities contracts and foreign currency exchange contracts, (ii) derivative
instruments, such as swap agreements (including interest rate and foreign
exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange rate agreements,
options, commodity futures contracts, commodity option contracts, and (iii) in
the case of both (i) and (ii) above, similar financial instruments, other than
(A) obligations on account of Senior Indebtedness and (B) obligations on
account of indebtedness for money borrowed ranking pari passu with or
subordinate to the Subordinated Debt Securities. "Entitled Persons" means any
person who is entitled to payment pursuant to the terms of Other Financial
Obligations.
The Corporation's obligations under the Subordinated Debt Securities will
rank pari passu in right of payment with each other and with the Existing
Subordinated Indebtedness, subject to the obligations of the holders of
Subordinated Debt Securities to pay over any Excess Proceeds to Entitled
Persons in respect of Other Financial Obligations as provided in the applicable
Subordinated Indenture.
As of June 30, 1993, Senior Indebtedness and Other Financial Obligations of
the Corporation aggregated approximately $8.5 billion.
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The Subordinated Indentures do not limit or prohibit the incurrence of
additional Senior Indebtedness and other Financial Obligations, which may
include indebtedness that is senior to the Subordinated Debt Securities but
subordinate to other obligations of the Corporation, including obligations of
the Corporation in respect of Other Financial Obligations.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in certificated or global form.
Debt Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed) at the office of the Security
Registrar (as defined in the applicable indenture), or at the office of any
transfer agent designated by the Corporation for such purpose with respect to
any series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the relevant Indenture. Such transfer or
exchange will be effected upon the Security Registrar or such transfer agent,
as the case may be, being satisfied with the documents of title and identity of
the person making the request. The Corporation has appointed Bankers as
Security Registrar with respect to both the Senior Debt Securities and the
Subordinated Debt Securities. If a Prospectus Supplement refers to any transfer
agents (in addition to the Security Registrar) initially designated by the
Corporation with respect to any series of Debt Securities, the Corporation may
at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent acts, except that
the Corporation will be required to maintain a transfer agent in each Place of
Payment (as defined in the applicable indenture) for such series. The
Corporation may at any time designate additional transfer agents with respect
to any series of Debt Securities.
In the event of any redemption in part, the Corporation shall not be required
to (i) issue, register the transfer of or exchange any Debt Security during a
period beginning at the opening of business 15 days before the day of mailing
of a notice of redemption of Debt Securities of like tenor and of the series of
which such Debt Security is a part, and ending at the close of business on the
earliest date in which the relevant notice of redemption is deemed to have been
given to all holders of Debt Securities of like tenor and of such series to be
redeemed and (ii) register the transfer of or exchange any Debt Security so
selected for redemption, in whole or in part, except the unredeemed portion of
any Debt Security being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and premium, if any, on any Debt Security will be made only
against surrender to the Paying Agent (as defined in the applicable indenture)
of such Debt Security. Unless otherwise indicated in an applicable Prospectus
Supplement, principal of, premium, if any, and interest on Debt Securities will
be payable, subject to any applicable laws and regulations, at the office of
such Paying Agent or Paying Agents as the Corporation may designate from time
to time, except that at the option of the Corporation payment of any interest
may be made by check mailed to the address of the person entitled thereto as
such address shall appear in the Security Register (as defined in the
applicable indenture) with respect to such Debt Securities. Unless otherwise
indicated in an applicable Prospectus Supplement, payment of interest on a Debt
Security on any Interest Payment Date (as defined in the applicable indenture)
will be made to the person in whose name such Debt Security (or Predecessor
Security) is registered at the close of business on the Regular Record Date for
such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office (as defined in the applicable indenture) of Bankers in
The City of New York will be designated as the Corporation's sole Paying Agent
for payments with respect to Debt Securities of each series. Any Paying Agents
outside the United States and any other Paying Agents in the United States
initially designated by the Corporation for the Debt Securities of any series
will be named in the applicable Prospectus Supplement.
The Corporation may at any time designate additional Paying Agents or rescind
the designation of any Paying Agent or approve a change in the office through
which any Paying Agent acts, except that the Corporation will be required to
maintain a Paying Agent in each Place of Payment for each series of Debt
Securities.
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All moneys paid by the Corporation to a Paying Agent for the payment of the
principal of, premium, if any, or interest on any Debt Security of any series
and that remain unclaimed at the end of two years after such principal,
premium, if any, or interest shall have become due and payable will be repaid
to the Corporation and the holder of such Debt Security must thereafter look
only to the Corporation for payment of such amounts.
GLOBAL DEBT SECURITIES
The Debt Securities may be issued in the form of one or more global
certificates (collectively, with respect to each series, the "Global Debt
Security") registered in the name of a depositary or a nominee of a depositary.
Unless otherwise specified in an applicable Prospectus Supplement, the
depositary will be The Depository Trust Company ("DTC"). The Corporation has
been informed by DTC that its nominee will be CEDE & CO. ("CEDE"). Accordingly,
CEDE is expected to be the initial registered holder of the Debt Securities
that are issued in global form. No person that acquires an interest in the Debt
Securities (a "Holder") will be entitled to receive a certificate representing
such person's interest in the Debt Securities except as set forth herein or in
the applicable Prospectus Supplement. Unless and until definitive Debt
Securities are issued under the limited circumstances described herein, all
references to actions by Holders of Debt Securities issued in global form shall
refer to actions taken by DTC upon instructions from its Participants (as
defined below), and all references herein to payments and notices to Holders
shall refer to payments and notices to DTC or CEDE, as the registered holder of
such Debt Securities, as the case may be, for distribution to Holders in
accordance with DTC's procedures.
DTC has informed the Corporation that it is a limited purpose trust company
organized under the laws of the State of New York, that it is a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to
Section 17A of the Exchange Act and was created to hold securities for its
participating organizations ("Participants") and to facilitate the clearance
and settlement of securities transactions between Participants through
electronic book-entry, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies and clearing corporations, and may include certain other
organizations. Indirect access to the DTC system also is available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants").
Holders that are not Participants or Indirect Participants but that desire to
purchase, sell or otherwise transfer ownership of, or other interests in, Debt
Securities may do so only through Participants and Indirect Participants. Under
a book-entry format, Holders may experience some delay in their receipt of
payments, as such payments will be forwarded by the agent designated by the
Corporation to CEDE, as nominee for DTC. DTC will forward such payments to its
Participants, which thereafter will forward them to Indirect Participants or
Holders. Holders will not be recognized by the Trustee as registered holders of
the Debt Securities entitled to the benefits of the applicable Indenture.
Holders that are not Participants will be permitted to exercise their rights as
such only indirectly through and subject to the procedures of Participants and,
if applicable, Indirect Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations as currently in effect (the "Rules"), DTC will be required to
make book-entry transfers of Debt Securities among Participants and to receive
and transmit payments to Participants. Participants and Indirect Participants
with which Holders have accounts with respect to the Debt Securities similarly
are required by the Rules to make book-entry transfers and receive and transmit
such payments on behalf of their respective Holders.
Because DTC can act only on behalf of Participants, who in turn act only on
behalf of Indirect Participants, and on behalf of certain banks, trust
companies and other persons approved by it, the ability of a Holder to pledge
Debt Securities to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to such Debt Securities, may be
limited due to the absence of physical certificates for such Debt Securities.
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DTC has advised the Corporation that DTC will take any action permitted to be
taken by a Holder of any Debt Securities under the applicable Indenture only at
the direction of one or more Participants to whose accounts with DTC the Debt
Securities are credited.
A Global Debt Security will be exchangeable for certificated Debt 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
depository for such Global Debt Security or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act at a time when DTC is
required to be so registered in order to act as such depository, (ii) the
Corporation executes and delivers to the applicable Trustee a Company Order (as
defined in the applicable Indenture) that such Global Debt Security shall be so
exchangeable or (iii) there has occurred and is continuing a default in the
payment of principal of, premium, if any, or interest on, the Debt Securities
or an Event of Default or an event that, with the giving of notice or lapse of
time, or both, would constitute an Event of Default with respect to the Debt
Securities. Any Global Debt Security that is exchangeable pursuant to the
preceding sentence will be exchangeable for Debt Securities registered in such
names as DTC directs.
Upon the occurrence of any event described in the immediately preceding
paragraph, DTC is generally required to notify all Participants of the
availability through DTC of certificated Debt Securities. Upon surrender by DTC
of the Global Debt Security representing the Debt Securities and delivery of
instructions for re-registration, the Trustee will reissue the Debt Securities
as certificated Debt Securities, and thereafter such Trustee will recognize the
holders of such certificated Debt Securities as registered holders of Debt
Securities entitled to the benefits of the applicable Indenture.
Except as described above, the Global Debt Security may not be transferred
except as a whole by DTC with respect to such Global Debt Security to a nominee
of DTC or by a nominee of DTC to DTC or another nominee of DTC or to a
successor depositary appointed by the Corporation. Except as described above,
DTC may not sell, assign, transfer or otherwise convey any beneficial interest
in a Global Debt Security evidencing all or part of the Debt Securities unless
such beneficial interest is in an amount equal to an authorized denomination
for the Debt Securities.
MODIFICATION OF THE INDENTURES
Each Indenture contains provisions that permit the Corporation and the
respective Trustee, with the consent of the holders of not less than 66 2/3% in
principal amount of the debt securities that are affected by the modification,
to modify the particular Indenture or any supplemental indenture or the rights
of the holders of the debt securities issued under such Indenture. However, no
such modification may, without the consent of the holder of each outstanding
debt security affected thereby, (a) change the stated maturity date of the
principal of, or any installment of principal of or interest, if any, on, any
such debt security, (b) reduce the principal amount of, or premium or rate of
interest, if any, on, any such debt security, (c) reduce the amount of
principal of an original issue discount debt security payable upon acceleration
of the maturity thereof, (d) change the place or currency of payment of
principal of, or premium or interest, if any, on, any such debt security, (e)
impair the right to institute suit for the enforcement of any payment on or
with respect to any such debt security, or (f) reduce the percentage in
principal amount of Outstanding Debt Securities (as defined in such Indenture)
of any series, the consent of whose holders is required for modification or
amendment of the Indenture or for waiver of compliance with certain provisions
of such Indenture or for waiver of certain defaults.
EVENTS OF DEFAULT
Senior Debt Securities
An Event of Default with respect to Senior Debt Securities of any series is
defined in the Senior Indenture as being: default for 30 days in payment of any
interest on Senior Debt Securities of such series; default in payment of
principal of, or premium, if any, on, Senior Debt Securities of such series;
default for 30 days in payment of any mandatory sinking fund payment required
by the Senior Debt Securities of such series; default for 90 days after notice
in performance of any other covenant in the Senior Debt Securities of such
series or
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in the Senior Indenture; or certain events of bankruptcy, insolvency or
reorganization. If an Event of Default with respect to Senior Debt Securities
of any series occurs and is continuing, the Senior Trustee or the holders of
not less than 25% in principal amount of the Senior Debt Securities of such
series then outstanding may declare the principal of all such Senior Debt
Securities to be due and payable. The Corporation is required to furnish to the
Senior Trustee annually a statement as to the performance by the Corporation of
its obligations under the Senior Indenture and as to any default in such
performance. Under certain circumstances, any declaration of acceleration with
respect to Senior Debt Securities of any series may be rescinded and past
defaults (except, unless theretofore cured, a default in the payment of
principal of, premium, if any, or interest on the Senior Debt Securities) may
be waived by the holders of a majority in aggregate principal amount of the
Senior Debt Securities of such series then outstanding. The Senior Trustee may
withhold notice to the holders of Senior Debt Securities of any series of any
continuing default (except in the payment of the principal of, or premium, if
any, or interest on any Senior Debt Securities of such series or in the payment
of any sinking or purchase fund installment) if such Senior Trustee considers
it in the interest of holders of such series of Senior Debt Securities to do
so.
Subordinated Debt Securities
An Event of Default with respect to Subordinated Debt Securities of any
series is defined in each Subordinated Indenture as being certain events
involving a bankruptcy, insolvency or reorganization of the Corporation. If an
Event of Default with respect to Subordinated Debt Securities of any series
shall have occurred and be continuing, either the applicable Subordinated
Trustee or the holders of not less than 25% in aggregate principal amount of
the Subordinated Debt Securities of such series then outstanding may declare
the principal of such Subordinated Debt Securities to be due and payable
immediately. The Corporation is required to furnish to each Subordinated
Trustee annually a statement as to the performance by the Corporation of its
obligations under the applicable Subordinated Indenture and as to any default
in such performance. Under certain circumstances, any declaration of
acceleration with respect to Subordinated Debt Securities of any series may be
rescinded and past defaults (except, unless theretofore cured, a default in the
payment of principal of, premium, if any, or interest on such Subordinated Debt
Securities) may be waived by the holders of a majority in aggregate principal
amount of the Subordinated Debt Securities of such series then outstanding.
Each Subordinated Trustee may withhold notice to the holders of the
Subordinated Debt Securities of any series issued under the applicable
Indenture of any continuing default (except in the payment of the principal of,
or premium, if any, or interest on any Subordinated Debt Securities of such
series or in the payment of any sinking or purchase fund installment) if such
Subordinated Trustee considers it in the interest of the holders of such series
of Subordinated Debt Securities to do so.
The Subordinated Indentures do not provide for any right of acceleration of
the payment of the principal of a series of Subordinated Debt Securities upon a
default in the payment of principal, premium, if any, or interest or a default
in the performance of any covenant or agreement in the Subordinated Debt
Securities of the particular series or in the Subordinated Indenture. In the
event of a default in the payment of interest, principal or premium, if any,
the holder of a Subordinated Debt Security (or the Subordinated Trustee on
behalf of the holders of all of the series of Subordinated Debt Securities
affected) may, subject to certain limitations and conditions, seek to enforce
payment of such interest, principal or premium, if any.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Corporation has covenanted in the Indentures that it will not merge or
consolidate with any other corporation or sell or convey all or substantially
all of its assets to any person, firm or corporation unless the Corporation is
the continuing corporation, or the successor corporation is a corporation
organized under the laws of the United States of America or a state thereof and
such corporation expressly assumes the obligations under any outstanding Debt
Securities and the respective Indentures and the Corporation or such successor
corporation is not, immediately after such merger, consolidation, sale or
conveyance, in default in the performance of any of the covenants or conditions
of the respective Indentures. The Indentures do not contain any other covenant
that restricts the Corporation's ability to merge or consolidate with any other
corporation,
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sell or convey all or substantially all of its assets to any persons, firm or
corporation or otherwise engage in restructuring transactions. Further, the
Indentures do not contain any provisions that would provide protection to
holders of Debt Securities against a sudden and dramatic decline in credit
quality resulting from a takeover, recapitalization or similar restructuring of
the Corporation.
TITLE
The Corporation, the Trustees and any agent of the Corporation or the
relevant Trustee may treat the registered owner of any Debt Security as the
absolute owner thereof (whether or not such Debt Security shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes.
REPLACEMENT OF DEBT SECURITIES
Any mutilated Debt Security will be replaced by the Corporation at the
expense of the holder upon surrender of such Debt Security to the Trustee. Debt
Securities that become destroyed, lost or stolen will be replaced by the
Corporation at the expense of the holder upon delivery to the relevant Trustee
of evidence of the destruction, loss or theft thereof satisfactory to the
Corporation and the relevant Trustee. In the case of a destroyed, lost or
stolen Debt Security, an indemnity satisfactory to the relevant Trustee and the
Corporation may be required at the expense of the holder of such Debt Security
before a replacement Debt Security will be issued.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
INFORMATION CONCERNING THE TRUSTEES
Subject to the provisions of the relevant Indenture relating to its duties,
each Trustee will be under no obligation to exercise any of its rights or
powers under such Indenture at the request, order or direction of any of the
holders of Debt Securities issued thereunder, unless such holders shall have
offered to such Trustee reasonable indemnity. Subject to such provision for
indemnification, the holders of a majority in principal amount of the debt
securities then outstanding thereunder will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee under the relevant Indenture, or exercising any trust or power
conferred on such Trustee.
Senior Trustee
Bankers serves as trustee under various indentures for The Chase Manhattan
Corporation, parent company of the Senior Trustee. The Senior Trustee also
serves as trustee under another indenture with the Corporation relating to
other issues of its debt securities. In addition, the Corporation and Bankers
have other relationships arising in the ordinary course of business with the
Senior Trustee.
First Subordinated Trustee
Bankers serves as trustee under an indenture for the First Subordinated
Trustee. In addition, the Corporation and Bankers have other relationships
arising in the ordinary course of business with the First Subordinated Trustee.
Second Subordinated Trustee
The Second Subordinated Trustee will be named in the Prospectus Supplement
relating to the first series of Subordinated Debt Securities issued under the
Second Subordinated Indenture.
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FOREIGN CURRENCY RISKS
GENERAL
Debt Securities of a series may be denominated in such foreign currencies or
currency units as may be designated by the Corporation at the time of offering
(the "Foreign Currency Securities").
THIS PROSPECTUS DOES NOT DESCRIBE ALL RISKS OF AN INVESTMENT IN FOREIGN
CURRENCY SECURITIES THAT RESULT FROM SUCH FOREIGN CURRENCY SECURITIES BEING
DENOMINATED IN A FOREIGN CURRENCY OR UNITS OF TWO OR MORE OF SUCH FOREIGN
CURRENCIES EITHER AS SUCH RISKS EXIST AT THE DATE OF THIS PROSPECTUS OR AS SUCH
RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR
OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN
FOREIGN CURRENCY SECURITIES. FOREIGN CURRENCY SECURITIES ARE NOT AN APPROPRIATE
INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN
CURRENCY TRANSACTIONS. ADDITIONAL FACTORS MAY BE SET FORTH IN CONNECTION WITH A
SPECIFIC FOREIGN CURRENCY SECURITY IN THE APPLICABLE PROSPECTUS SUPPLEMENT.
Unless otherwise indicated in an applicable Prospectus Supplement, a Foreign
Currency Security will not be sold in, or to a resident of, the country of the
Specified Currency (as defined below) in which such Foreign Currency Security
is denominated. The information set forth below is by necessity incomplete and
prospective purchasers of Foreign Currency Securities should consult their own
financial and legal advisors with respect to any matters that may affect the
purchase or holding of a Foreign Currency Security or the receipt of payments
of principal of, premium, if any, and interest on a Foreign Currency Security
in a Specified Currency.
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Foreign Currency Securities entails significant risks that
are not associated with a similar investment in a security denominated in U.S.
dollars. Such risks include, without limitation, the possibility of significant
changes in the rate of exchange between the U.S. dollar and the currency or
currency unit designated by the Corporation at the time of offering (the
"Specified Currency") and the possibility of the imposition or modification of
foreign exchange controls by either the United States or foreign governments.
Such risks generally depend on economic and political events and the supply of
and demand for the relevant currencies, over which the Corporation has no
control. In recent years, rates of exchange between the U.S. dollar and certain
foreign currencies have been highly volatile and such volatility may be
expected in the future. Fluctuations in any particular exchange rate that have
occurred in the past are not necessarily indicative, however, of fluctuations
in the rate that may occur during the term of any Foreign Currency Security.
Depreciation of the Specified Currency applicable to a Foreign Currency
Security against the U.S. dollar would result in a decrease in the U.S. dollar-
equivalent yield of such Foreign Currency Security, in the U.S. dollar-
equivalent value of the principal repayable at maturity of such Foreign
Currency Security and, generally, in the U.S. dollar-equivalent market value of
such Foreign Currency Security.
Governments have imposed from time to time exchange controls and may in the
future impose or revise exchange controls at or prior to a Foreign Currency
Security's maturity. Even if there are no exchange controls in effect with
respect to a Specified Currency, it is possible that the Specified Currency for
any particular Foreign Currency Security would not be available at such Foreign
Currency Security's maturity due to other circumstances beyond the control of
the Corporation.
JUDGMENTS
If an action based on Foreign Currency Securities were commenced in a court
of the United States, it is likely that such court would grant judgment
relating to such Foreign Currency Securities only in U.S. dollars. It is not
clear, however, whether, in granting such judgment, the rate of conversion into
U.S. dollars would be determined with reference to the date of default, the
date on which judgment is rendered or some other date. Holders of Foreign
Currency Securities would bear the risk of exchange rate fluctuations between
the time the amount of the judgment is calculated and the time the applicable
Trustee converts U.S. dollars to the Specified Currency for payment of the
judgment.
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DESCRIPTION OF SERIES PREFERRED STOCK
The Corporation is authorized to issue up to 10,000,000 shares of series
preferred stock, without par value. All shares of Series Preferred Stock,
irrespective of series, constitute one and the same class. See "Description of
the Corporation's Capital Stock." The following description of the terms of the
Series Preferred Stock sets forth certain general terms and provisions of the
Series Preferred Stock to which any Prospectus Supplement may relate. Certain
terms of any series of Series Preferred Stock offered by any Prospectus
Supplement will be described in the Prospectus Supplement relating to such
series of Series Preferred Stock. If so indicated in the Prospectus Supplement,
the terms of any such series may differ from the terms set forth below.
The Board of Directors is authorized to establish and designate series and to
fix the number of shares and the relative rights, preferences and limitations
of the respective series of the Series Preferred Stock. The terms of a
particular series of Series Preferred Stock may differ, among other things, in
(1) the number of shares that constitute such series, (2) the dividend rate (or
the method of calculation) on the shares of such series, and whether such
dividends are cumulative, (3) whether or not the shares of the series shall be
redeemable and the terms thereof, (4) whether or not the shares of the series
shall be convertible into, or exchangeable for, Common Stock (as defined below)
or other stock of the Corporation and the terms thereof, (5) the amount per
share payable on the shares of the series in case of liquidation, dissolution
or winding up of the Corporation, (6) the terms of voting rights, if any, of
shares of the series, and (7) the other rights and privileges and any
qualifications, limitations or restrictions of such rights or privileges of
such series. Unless otherwise specifically set forth in the Prospectus
Supplement relating to a series of Series Preferred Stock, all shares of Series
Preferred Stock shall be of equal rank, preference and priority as to
dividends; when the stated dividends on any series are not paid in full, the
shares of all series of the Series Preferred Stock are to share ratably in any
dividend payment that is made; and upon liquidation, dissolution or winding up,
if assets are insufficient to pay in full all series preferred stock, then such
assets are to be distributed among the holders ratably.
As described under "Depositary Shares" below, the Corporation may, at its
option, elect to offer Depositary Shares evidenced by Depositary Receipts (as
defined below), each representing a fraction (to be specified in the Prospectus
Supplement relating to the particular series of Series Preferred Stock) of a
share of the particular series of Series Preferred Stock issued and deposited
with a depositary, in lieu of offering full shares of such series of the Series
Preferred Stock.
The description of certain provisions of the Series Preferred Stock set forth
below does not purport to be complete and is subject to and qualified in its
entirety by reference to the Restated Certificate of Incorporation, as amended,
of the Corporation (the "Certificate of Incorporation") and the Certificate of
Amendment of the Certificate of Incorporation that relates to a particular
series of Series Preferred Stock, which will be filed with the Commission at or
prior to the time of the sale of the related Series Preferred Stock.
DIVIDEND RIGHTS
The holders of the Series Preferred Stock shall be entitled to receive, but
only when, as and if declared by the Board of Directors out of funds legally
available for that purpose, cash dividends at the rates and on the dates set
forth in the Prospectus Supplement relating to a particular series of Series
Preferred Stock, and no more (each date of such payment, a "Dividend Payment
Date"). Such rate may be fixed or variable, as set forth in the applicable
Prospectus Supplement. Each such dividend will be payable to the holders of
record of the shares of such series as they appear on the stock books of the
Corporation (or, if applicable, the records of the Depositary referred to below
under "Depositary Shares") on such record dates as are fixed by the Board of
Directors of the Corporation or a duly authorized committee thereof. Dividends
payable on any series of Series Preferred Stock for any period less than a full
quarter will be computed on the basis of the
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actual number of days elapsed over a 360-day year, and for a period of a full
quarter will be computed on the basis of a 360-day year consisting of twelve
30-day months. Unless otherwise specified in the Prospectus Supplement relating
to a series of Series Preferred Stock, such dividends shall be payable from,
and shall be cumulative from, the date of original issue of each share, so that
if in any quarterly dividend period (being the period between such Dividend
Payment Dates) dividends at the rate or rates as described in the Prospectus
Supplement relating to such series of Series Preferred Stock shall not have
been declared and paid or set apart for payment on all outstanding shares of
Series Preferred Stock for such quarterly dividend period and all preceding
quarterly dividend periods from and after the first day from which dividends
are cumulative, then the aggregate deficiency shall be declared and fully paid
or set apart for payment, but without interest, before any dividends shall be
declared or paid or set apart for payment on the Common Stock by the
Corporation. The cutting-off of dividends on Common Stock until the arrearages
have been paid or provided for, as outlined above, and such rights, if any, to
vote for the election of directors as may be set forth in the Prospectus
Supplement relating to a series of Series Preferred Stock, shall be the only
consequences of the failure to declare or pay dividends on the Series Preferred
Stock. After payment in full of all dividend arrearages on the Series Preferred
Stock, dividends on the Common Stock may be declared and paid out of funds
legally available for that purpose as the Board of Directors may determine.
Each series of the Series Preferred Stock will be entitled to dividends as
described in the Prospectus Supplement relating to such series. Different
series of the Series Preferred Stock may be entitled to dividends at different
dividend rates or based upon different methods of determination.
OPTIONAL REDEMPTION
The Corporation may, at its option, at any time or from time to time on not
less than 30 and not more than 60 days' notice, redeem one or more series of
the Series Preferred Stock, in whole or in part, at the redemption prices and
on the dates set forth in the Prospectus Supplement for the related series of
Series Preferred Stock.
Any optional redemption by the Corporation will be made only with the
approval of the appropriate bank regulatory authorities unless at the time of
redemption such approval is not required. At the date of this Prospectus, the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") require that the optional redemption of any series of
Series Preferred Stock, if such series is to be treated as tier 1 capital of
the Corporation, must be subject to the prior approval of the Federal Reserve
Board.
If less than all the outstanding shares of a series of Series Preferred Stock
are to be redeemed, the selection of the shares to be redeemed will be
determined by lot or pro rata as may be determined by the Board of Directors of
the Corporation or by any other method that the Board of Directors may
determine to be equitable. From and after the redemption date (unless default
shall be made by the Corporation in providing for the payment of the redemption
price), dividends shall cease to accrue on the shares of Series Preferred Stock
called for redemption and all rights of the holders thereof (except the right
to receive the redemption price) shall cease.
At the option of the Corporation, shares of Series Preferred Stock redeemed
or otherwise acquired by the Corporation may be restored to the status of
authorized but unissued shares of Series Preferred Stock.
CONVERSION OR EXCHANGE
The holders of shares of any series of Series Preferred Stock will have such
rights, if any, to convert such shares into, or to exchange such shares for,
cash, shares of Common Stock or shares of any other series of preferred stock
of the Corporation, as may be set forth in the Prospectus Supplement relating
to such series of Series Preferred Stock.
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VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of Series Preferred Stock, or except as expressly required by
applicable law, the holders of the Series Preferred Stock will not be entitled
to vote. In the event that the Corporation issues full shares of any series of
Series Preferred Stock, each such share will be generally entitled to one vote
on matters on which holders of such series are entitled to vote, irrespective
of such series' aggregate stated value, liquidation preference or initial
offering price. However, as more fully described under "Depositary Shares"
below, if the Corporation elects to issue Depositary Shares representing a
fraction of a share of a series of Series Preferred Stock, each such Depositary
Share will, in effect, be entitled to the same fraction of a vote, rather than
a full vote, per Depositary Share.
Unless otherwise specified in the applicable Prospectus Supplement, so long
as any shares of any series of Series Preferred Stock remain outstanding, the
Corporation shall not amend the Certificate of Incorporation so as to adversely
affect or subordinate the rights of the Series Preferred Stock without the
affirmative vote or consent of the holders of at least a majority of the
outstanding shares of Series Preferred Stock. However, if any such adverse
alteration affects the rights of only a single series of Series Preferred
Stock, then the alteration may be effected only with the vote or consent of at
least a majority of the outstanding shares of such series of Series Preferred
Stock. An increase in the authorized amount of the Series Preferred Stock
and/or the creation and issuance of other series of Series Preferred Stock in
accordance with the Certificate of Incorporation will not be, or be deemed to
be, an adverse alteration.
The foregoing voting provisions will not apply if, in connection with the
matters specified, provision is made for the redemption or retirement of all
outstanding Series Preferred Stock.
Under regulations adopted by the Federal Reserve Board, if the holders of any
series of Series Preferred Stock become entitled to vote for the election of
directors because dividends on such series are in arrears, such series may then
be deemed a "class of voting securities," and a holder of 25% or more of such
series (or a holder of 5% or more if it otherwise exercises a "controlling
influence" over the Corporation) may then be subject to regulation as a bank
holding company in accordance with the Bank Holding Company Act of 1956, as
amended (the "BHC Act"). In addition, at such time (i) any bank holding company
may be required to obtain the approval of the Federal Reserve Board under the
BHC Act, and any foreign bank, and any company that controls a foreign bank,
that has certain types of U.S. banking operations may be required to obtain the
approval of the Federal Reserve Board under the International Banking Act of
1978, as amended, to acquire or retain 5% or more of any series of Series
Preferred Stock and (ii) any person other than a bank holding company may be
required to obtain the approval of the Federal Reserve Board under the Change
in Bank Control Act to acquire 10% or more of such series of Series Preferred
Stock.
LIQUIDATION RIGHTS
Upon any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Series Preferred Stock will have
preference and priority over the Common Stock for payment out of the assets of
the Corporation or proceeds thereof, whether from capital or surplus, of such
amounts as are set forth in the Prospectus Supplement relating to such series
of Series Preferred Stock and, after such payment, the holders of such series
of Series Preferred Stock will be entitled to no other payments. If, in such
case, the assets of the Corporation or proceeds thereof are insufficient to
make the full liquidating payment on such series of Series Preferred Stock and
liquidating payments on any other outstanding Series Preferred Stock (including
accrued and unpaid dividends, if any), then such assets and proceeds will be
distributed among the holders of such series of Series Preferred Stock and any
other outstanding series of Series Preferred Stock, ratably in accordance with
the respective amounts that would be payable on all Series Preferred Stock
(including accrued and unpaid dividends, if any) if all such liquidating
amounts payable were
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paid in full. A consolidation or merger of the Corporation with or into any
other corporation or corporations or a sale, whether for cash, shares of stock,
securities or properties, of all or substantially all or any part of the assets
of the Corporation will not be deemed or construed to be a liquidation,
dissolution or winding up of the Corporation.
MISCELLANEOUS
Harris Trust Company of New York will serve as transfer agent, dividend
disbursing agent and registrar for the Series Preferred Stock issued in
connection with this Prospectus. The holders of Series Preferred Stock,
including any Series Preferred Stock issued in connection with this Prospectus,
will not have any preemptive rights to purchase or subscribe for any shares of
any class or other securities of any type of the Corporation. When issued, the
Series Preferred Stock will be fully paid and nonassessable. The Certificate of
Amendment of the Certificate of Incorporation setting forth the provisions of
each series of Series Preferred Stock will become effective after the date of
this Prospectus but on or before issuance of the related series of Series
Preferred Stock.
DEPOSITARY SHARES
GENERAL
The Corporation may, at its option, elect to offer fractional shares of
Series Preferred Stock, rather than full shares of Series Preferred Stock. In
the event such option is exercised, the Corporation will issue to the public
receipts for Depositary Shares, each of which will represent a fraction (to be
set forth in the Prospectus Supplement relating to a particular series of
Series Preferred Stock) of a share of a particular series of Series Preferred
Stock as described below.
The shares of any series of Series Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (each, a "Deposit
Agreement") between the Corporation and a bank or trust company selected by the
Corporation, having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000 (each, a "Depositary").
Subject to the terms of the applicable Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fraction of
a share of Series Preferred Stock represented by such Depositary Share, to all
the rights and preferences of the Series Preferred Stock represented thereby
(including dividend, voting, redemption and liquidation rights).
The Depositary Shares relating to any series of Series Preferred Stock will
be evidenced by Depositary Receipts issued pursuant to the applicable Deposit
Agreement. Depositary Receipts will be distributed to those persons purchasing
the fractional shares of the related series of Series Preferred Stock in
accordance with the terms of the offering described in the related Prospectus
Supplement. Copies of the forms of Deposit Agreement and Depositary Receipt are
filed as exhibits to the Registration Statement of which this Prospectus is a
part, and the following summary is qualified in its entirety by reference to
such exhibits.
Pending the preparation of definitive engraved or printed Depositary Receipts
relating to any series of Series Preferred Stock, the applicable Depositary
may, upon the written order of the Corporation, issue temporary Depositary
Receipts substantially identical to (and entitling the holders thereof to all
the rights pertaining to) such definitive Depositary Receipts but not in
definitive form. Definitive Depositary Receipts will be prepared thereafter
without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Corporation's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash distributions
received in respect of any series of Series Preferred Stock represented by
Depositary Shares to the record holders of such Depositary Shares in proportion
to the number of such Depositary Shares owned by such holders.
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In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Corporation, sell such property and distribute the net proceeds from such
sale to such holders.
WITHDRAWAL OF STOCK
Upon surrender of Depositary Receipts at the corporate trust office of the
Depositary (unless the related Depositary Shares have previously been called
for redemption), the holder of the Depositary Shares evidenced thereby will be
entitled to delivery at such office to or upon such holder's order, of the
number of whole shares of the related series of Series Preferred Stock and any
money or other property represented by such Depositary Shares. Holders of
Depositary Shares will be entitled to receive whole shares of the related
series of Series Preferred Stock on the basis set forth in the related
Prospectus Supplement for such series of Series Preferred Stock, but holders of
such whole shares of such Series Preferred Stock will not thereafter be
entitled to receive Depositary Shares in exchange therefor. If the Depositary
Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of the related series of Series Preferred Stock to be withdrawn, the
Depositary will deliver to such holder at the same time a new Depositary
Receipt evidencing such excess number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of Series Preferred Stock represented by Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary upon the redemption, in whole or in part, of such
series of Series Preferred Stock held by the Depositary. The redemption price
per Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of Series Preferred Stock.
Whenever the Corporation redeems shares of Series Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares representing shares of the related series of Series
Preferred Stock so redeemed. If less than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by lot or pro
rata or by any other method as may be determined by the Depositary to be
equitable.
VOTING THE SERIES PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Series
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such Series Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Series Preferred Stock) will be entitled to instruct the
Depositary as to the exercise of the voting rights pertaining to the amount of
the Series Preferred Stock represented by such holder's Depositary Shares. The
Depositary will endeavor, insofar as practicable, to vote the amount of the
Series Preferred Stock represented by such Depositary Shares in accordance with
such instructions, and the Corporation will agree to take all action that may
be deemed necessary by the Depositary in order to enable the Depositary to do
so. The Depositary will abstain from voting shares of the Series Preferred
Stock to the extent that it does not receive specific instructions from the
holders of Depositary Shares representing such Series Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing Depositary Shares and any provision
of the applicable Deposit Agreement may at any time be amended by agreement
between the Corporation and the Depositary. However, any amendment that
materially and adversely alters the rights of the holders of Depositary Shares
issued under any Deposit Agreement will not be effective unless such amendment
has been approved by the holders of at least a majority of the Depositary
Shares then outstanding under such Deposit Agreement. A Deposit Agreement may
be terminated by the Corporation or the Depositary only if (i) all outstanding
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Depositary Shares under such Deposit Agreement have been redeemed or (ii) there
has been a final distribution in respect of the related series of Series
Preferred Stock in connection with any liquidation, dissolution or winding up
of the Corporation and such distribution has been distributed to the holders of
Depositary Receipts.
CHARGES OF DEPOSITARY
The Corporation will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. The
Corporation will also pay charges of the Depositary in connection with the
initial deposit of the related series of Series Preferred Stock, any redemption
of such Series Preferred Stock at the option of the Corporation, and any
withdrawals of Series Preferred Stock by the holders of Depositary Shares.
Holders of Depositary Receipts will pay transfer and other taxes and
governmental charges and such other charges as are expressly provided in the
applicable Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
A Depositary may resign at any time by delivering to the Corporation notice
of its election to do so, and the Corporation may at any time remove a
Depositary, and any such resignation or removal will take effect upon the
appointment of a successor Depositary and its acceptance of such appointment.
Such successor Depositary must be appointed within 60 days after delivery of
the notice of resignation or removal and must be a bank or trust company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
MISCELLANEOUS
Each Depositary will forward all reports and communications from the
Corporation that are delivered to such Depositary as the holders of the
applicable series of Series Preferred Stock.
Neither a Depositary nor the Corporation will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the applicable Deposit Agreement. The obligations of the
Corporation and the Depositary under each Deposit Agreement will be limited to
performance in good faith of their duties thereunder and they will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Series Preferred Stock unless satisfactory indemnity is
furnished. They may rely on written advice of counsel or accountants, or
information provided by persons presenting Series Preferred Stock for deposit,
holders of Depositary Receipts or other persons believed to be competent, and
on documents believed to be genuine.
DESCRIPTION OF THE CORPORATION'S CAPITAL STOCK
The Corporation is authorized to issue 300,000,000 shares of Common Stock,
par value $1.00 per share (the "Common Stock"), and 10,000,000 shares of the
Series Preferred Stock. Neither the Common Stock nor the Series Preferred Stock
has preemptive rights. At the Annual Meeting of the Corporation on April 17,
1990, shareholders voted in favor of an amendment to the Certificate of
Incorporation (the "Proposed Amendment") increasing the number of shares of
authorized preferred stock from 10,000,000 to 20,000,000 by creating a new
class of serial preferred stock, without par value, with 10,000,000 authorized
shares. The Proposed Amendment does not give the holders of serial preferred
stock preemptive rights. The following summary does not purport to be complete
and is subject in all respects to the applicable provisions of the Certificate
of Incorporation and the By-Laws of the Corporation.
COMMON STOCK
Subject to the rights of holders of preferred stock, holders of Common Stock
are entitled to receive dividends when, as and if declared by the Board of
Directors of the Corporation out of any funds legally available therefor, and
are entitled upon liquidation, dissolution or winding up, after claims of
creditors, to
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receive pro rata the net assets of the Corporation. The holders of the Common
Stock are entitled to one vote for each share held and are vested with all of
the voting power except as the Board of Directors shall have provided voting
rights with respect to any series of preferred stock described below.
Holders of shares of Common Stock have non-cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election
of directors can elect 100% of the directors if they choose to do so, and, in
such event, the holders of the remaining fewer than 50% of the shares voting
for the election of directors will not be able to elect any person or persons
to the Board of Directors. The Common Stock does not have any sinking fund,
conversion or redemption provisions.
Harris Trust Company of New York is the Transfer Agent and Registrar of the
Common Stock of the Corporation. The Common Stock is listed on the New York
Stock Exchange and The International Stock Exchange of the United Kingdom and
the Republic of Ireland Limited. At June 30, 1993, there were outstanding
82,281,043 shares of the Corporation's Common Stock.
PREFERRED STOCK
Series Preferred Stock
General. The Series Preferred Stock, of which 10,000,000 shares have been
authorized, upon issuance has preference over the Common Stock with respect to
the payment of dividends and the distribution of assets in the event of
liquidation, dissolution or winding up of the Corporation and such other
rights, preferences and limitations as may be fixed by the Board of Directors.
Dividend provisions, liquidation preferences, voting rights, if any, sinking
fund and redemption provisions, if any, and conversion and exchange provisions,
if any, with respect to each series of Series Preferred Stock also will be
fixed by the Board of Directors. The shares of Series Preferred Stock referred
to in this Prospectus, when issued and paid for, will be validly issued, fully
paid and non-assessable.
Preferred Share Purchase Rights. On February 16, 1988, the Board of Directors
of the Corporation declared a dividend distribution of one Preferred Share
Purchase Right (each, a "Right") for each share of Common Stock held, payable
February 26, 1988 to shareholders of record on that date. Rights also
automatically attach to each share of Common Stock issued after February 26,
1988. The Rights are issued pursuant to an agreement dated as of February 22,
1988 (the "Rights Agreement") between the Corporation and Harris Trust Company
of New York, as Rights Agent, as successor to Morgan Shareholder Services Trust
Company.
Each Right entitles the record holder to purchase from the Corporation a
1/100th interest in a share of the Corporation's Series C Junior Participating
Preferred Stock at an exercise price of $140, subject to certain adjustments.
The Rights will not be exercisable or transferable apart from the Common Stock
until the tenth day after either a public announcement that a person or group
has acquired beneficial ownership of 20% or more of the Common Stock or the
announcement or commencement of a tender offer for 20% or more of the Common
Stock. If the Corporation is acquired or 50% or more of its consolidated assets
or earning power are sold, each holder of a Right will have the right to
receive, upon exercise at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company having a market value
of two times the exercise price of the Right. If any person becomes an
Acquiring Person (as defined in the Rights Agreement) (unless such person first
acquires 20% or more of the outstanding Common Stock by a purchase pursuant to
a tender offer for all of the Common Stock for cash, which purchase increases
such person's beneficial ownership to 80% or more of the outstanding Common
Stock), each holder of a Right other than Rights beneficially owned by the
Acquiring Person (which will be void) will have the right to receive upon
exercise that number of shares of Common Stock having a market value of two
times the exercise price of the Right. The Rights will expire on February 26,
1998, but may be redeemed for $0.01 per Right at any time before a person or
group acquires the beneficial ownership of 20% or more of the Common Stock.
Until a Right is exercised, the holder has no rights as a shareholder of the
Corporation.
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After the acquisition by a person or group of beneficial ownership of 20% or
more of the outstanding Common Stock and prior to the acquisition by such
person or group of 50% or more of the outstanding Common Stock, the Board of
Directors of the Corporation may exchange the Rights (other than Rights owned
by such person or group), in whole or in part, at an exchange ratio of one
share of Common Stock, or a 1/100th interest in a share of Series C Junior
Participating Preferred Stock (or a share of a class or series of the
Corporation's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
If issued, each share of Series C Junior Participating Preferred Stock will
be entitled, subject to adjustment, to (i) a quarterly dividend of the greater
of $1 per share or 100 times the quarterly dividend declared on each share of
Common Stock, (ii) in the event of liquidation, dissolution or winding up, a
preferential liquidation payment of the greater of $100 per share or 100 times
the liquidation payment made per share of Common Stock, and (iii) 100 votes per
share voting together with the holders of the Corporation's Common Stock on all
matters.
Under certain conditions, the Rights will also be redeemed in connection with
an acquisition of all of the Corporation's Common Stock for cash in a
transaction approved by the Corporation's shareholders. Subject to certain
specified conditions, a special meeting of the Corporation's shareholders to
vote on such a transaction will be called upon the request of a potential
acquiror.
These statements are qualified in their entirety by reference to the Rights
Agreement, a copy of which was filed with the Commission.
Fixed/Adjustable Rate Cumulative Preferred Stock, Series D. On August 31,
1989, the Corporation issued 5,000,000 shares of its Fixed/Adjustable Rate
Cumulative Preferred Stock, Series D ($50 Liquidation Preference) (the "Series
D Preferred Stock") of which 4,105,550 shares are currently outstanding.
Dividends on the Series D Preferred stock are cumulative. If dividends payable
on the Series D Preferred Stock are in arrears in an amount equivalent to
dividends for six full dividend periods, the number of directors of the
Corporation will be increased by two and the holders of the outstanding Series
D Preferred Stock, voting together as a single class with holders of shares of
any other Series Preferred Stock then outstanding upon which like voting rights
have been conferred and are then exercisable, will be entitled to elect two
additional directors until all dividends in arrears have been declared and paid
or set apart for payment in full. In the event of liquidation, dissolution or
winding up of the Corporation, the holders of the Series D Preferred Stock will
be entitled to receive a distribution of $50 per share, plus, in each case,
accrued and unpaid dividends to the date of final distribution.
Except under certain circumstances, shares of Series D Preferred Stock were
not redeemable prior to September 1, 1992. Since such date and prior to
September 1, 1994, shares of Series D Preferred Stock are redeemable at the
option of the Corporation, as a whole or in part, at a redemption price per
share of $51.50 and thereafter at $50 per share. The redemption price set forth
above with respect to Series D Preferred Stock will be increased, in each case,
by the amount of accrued and unpaid dividends thereon to the date fixed for
redemption.
The dividend rate on the Series D Preferred Stock for each dividend period
prior to September 1, 1994 will be 8.72% per annum. Thereafter, dividends on
the Series D Preferred Stock will be established quarterly at a rate per annum
equal to the sum of an amount determined by applying (i) the effective rate (as
defined below) in effect from time to time and (ii) the amount (not to exceed
$0.25 per share) by which the regular quarterly cash dividend per share, if
any, declared on the Corporation's Common Stock during the immediately
preceding dividend period exceeds the last regular quarterly cash dividend per
share actually paid by the Corporation on the Common Stock prior to June 1,
1994. The "effective rate" for any dividend period will be equal to .25% over
the highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Thirty Year Constant Maturity Rate, each as defined in the Certificate of
Incorporation,
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determined for the dividend period. The effective rate for any dividend period,
however, will not be less than 8% per annum nor greater than 15% per annum.
Under certain circumstances, the amount of dividends payable or accrued in
respect of shares of the Series D Preferred Stock will be adjusted to take
account of certain amendments to the Internal Revenue Code of 1986, as amended
(the "Code"). In no event will the dividends payable on the Series D Preferred
Stock exceed 17% per annum.
8.55% Cumulative Preferred Stock, Series I. On March 20, 1992, the
Corporation filed a Certificate of Amendment to its Certificate of
Incorporation providing for the issuance of up to 1,150,000 shares of the
Corporation's 8.55% Cumulative Preferred Stock, Series I ($100 Liquidation
Preference) ("Series I Preferred Stock") in connection with the issuance by the
Corporation and Bankers of 4,000,000 preferred purchase units, each consisting
of a subordinated note of Bankers in the principal amount of $25, the guaranty
by the Corporation of such note, and a purchase contract of the Corporation
requiring the Corporation to issue and sell and the obligor thereunder to
purchase, subject to certain conditions, a depositary share representing a one-
fourth interest in a share of Series I Preferred Stock at a purchase price of
$25 per depositary share, on March 1, 1995, on which date the Series I
Preferred Stock will be issuable. When and if issued, dividends on the Series I
Preferred Stock will be cumulative. If dividends payable on the Series I
Preferred Stock are in arrears in an amount equivalent to dividends for six
full dividend periods, the number of directors of the Corporation will be
increased by two and the holders of the outstanding Series I Preferred Stock,
voting together as a single class with holders of shares of any other Series
Preferred Stock then outstanding upon which like voting rights have been
conferred and are then exercisable, will be entitled to elect two additional
directors until all dividends in arrears have been declared and paid or set
apart for payment in full. In the event of liquidation, dissolution or winding
up of the Corporation, the holders of the Series I Preferred Stock will be
entitled to receive a distribution of $100 per share, plus, in each case,
accrued and unpaid dividends to the date of final distribution.
The Series I Preferred Stock, when and if issued, will not be redeemable
prior to March 1, 1997. On or after such date, the Series I Preferred Stock
will be redeemable at the option of the Corporation, in whole or in part, at a
redemption price of $100 per share, plus accrued and unpaid dividends thereon
to the date fixed for redemption.
Fixed/Adjustable Rate Cumulative Preferred Stock, Series J. On October 28,
1992, the Corporation issued 447,225 shares of the Corporation's
Fixed/Adjustable Rate Cumulative Preferred Stock, Series J ($100 Liquidation
Preference) (the "Series J Preferred Stock"). Dividends on the Series J
Preferred Stock are cumulative. If dividends payable on the Series J Preferred
Stock are in arrears in an amount equivalent to dividends for six full dividend
periods, the number of directors of the Corporation will be increased by two
and the holders of the outstanding Series J Preferred Stock, voting together as
a single class with holders of shares of any other Series Preferred Stock then
outstanding upon which like voting rights have been conferred and are then
exercisable, will be entitled to elect two additional directors until all
dividends in arrears have been declared and paid or set apart for payment in
full. In the event of liquidation, dissolution or winding up of the
Corporation, the holders of the Series J Preferred Stock are entitled to
receive a distribution of $100 per share, plus, in each case, accrued and
unpaid dividends to the date of final distribution.
Except under certain circumstances, shares of Series J Preferred Stock are
not redeemable prior to December 1, 1995. On or after such date and prior to
December 1, 1997, shares of Series J Preferred Stock are redeemable at the
option of the Corporation at a redemption price per share of $103.00 and
thereafter at $100 per share. The redemption price set forth above with respect
to Series J Preferred Stock will be increased, in each case, by the amount of
accrued and unpaid dividends thereon to the date fixed for redemption.
The dividend rate on the Series J Preferred Stock for each dividend period to
December 1, 1997 is 7 3/8% per annum. Thereafter, dividends on the Series J
Preferred Stock will be established quarterly at a rate per annum equal to the
sum of (i) the amount determined by applying the effective rate (as defined
below) in effect from time to time and (ii) the amount (not to exceed $0.50 per
share) by which the regular quarterly
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cash dividend per share, if any, declared on the Corporation's Common Stock
during the immediately preceding dividend period exceeds the last regular
quarterly cash dividend per share actually paid by the Corporation on the
Common Stock prior to September 1, 1997. The "effective rate" for any dividend
period will be equal to .25% over the highest of the Treasury Bill Rate, the
Ten Year Constant Maturity Rate and the Thirty Year Constant Maturity Rate,
each as defined in the Certificate of Incorporation, determined for the
dividend period. The effective rate for any dividend period, however, will not
be less than 7% per annum nor greater than 15% per annum. Under certain
circumstances, the amount of dividends payable or accrued in respect of shares
of the Series J Preferred Stock will be adjusted to take account of certain
amendments to the Code. In no event will the dividends payable on the Series J
Preferred Stock exceed 17% per annum.
Auction Rate Cumulative Preferred Stock, Series K, L, M and N. On January 22,
1993, in connection with the issuance of an exchangeable preferred stock issued
by a wholly owned indirect subsidiary of the Corporation, the Corporation
issued and held in treasury its Auction Rate Cumulative Stock, Series K, L, M
and N (the "Auction Rate Preferred Stock"), each series having 625 shares and
each share having a liquidation preference of $100,000, plus accrued and unpaid
dividends, and contingent voting rights. The Auction Rate Preferred Stock is
being held for exchange as fully described in the Certificate of Incorporation.
Each of the four series is identical except that, when exchanged, the dividend
rates and dividend payment dates vary and separate auctions on different dates
are held for each series.
The shares of each of these series of Auction Rate Preferred Stock are
redeemable, as a whole or in part, except under certain conditions, at the
option of the Corporation, at a redemption price of $100,000 per share plus an
amount equal to accrued and unpaid dividends.
When exchanged for the exchangeable preferred stock, each series of the
Auction Rate Preferred Stock will pay a dividend for the applicable dividend
period (generally 49 days) at a rate that is determined by an auction conducted
on each such series of Auction Rate Preferred Stock on the business day
preceding the commencement of a subsequent dividend period. The rate for any
dividend period is subject to a maximum rate based upon the Three-Point ARP
Index, as defined in the Certificate of Incorporation, in effect on a
particular auction date, but in no event will such rate for any dividend period
exceed 24%.
7 5/8% Cumulative Preferred Stock, Series O. On June 1, 1993, the Corporation
filed a Certificate of Amendment to its Certificate of Incorporation providing
for the issuance of 1,000,000 shares of the Corporation's 7 5/8% Cumulative
Preferred Stock, Series O ($250 liquidation preference) ("Series O Preferred
Stock") in connection with the issuance by the Corporation of $150,000,000 of
its 7 5/8% Convertible Capital Securities due 2033 (the "7 5/8% Capital
Securities"). The interest rate on the 7 5/8% Capital Securities, subject to
notice, may be reset by the Corporation with respect to all or a portion of the
7 5/8% Capital Securities to a rate of 6 1/8% per annum. Upon an election by
the Corporation to reset the interest rate applicable to a 7 5/8% Capital
Security, the holder of such 7 5/8% Capital Security will have the right to
convert such security into depositary shares of the Corporation, each
representing a one-tenth interest in a share of Series O Preferred Stock. When
and if the Series O Preferred Stock is issued, dividends on the Series O
Preferred Stock will be cumulative. If dividends payable on the Series O
Preferred Stock are in arrears in an amount equivalent to dividends for six
full dividend periods, the number of directors of the Corporation will be
increased by two and the holders of the outstanding Series O Preferred Stock,
voting together as a single class with holders of shares of any other series
preferred stock then outstanding upon which like voting rights have been
conferred and are then exercisable, will be entitled to elect two additional
directors until all dividends in arrears on the Series O Preferred Stock have
been declared and paid or set apart for payment in full. In the event of
liquidation, dissolution or winding up of the Corporation, the holders of the
Series O Preferred Stock will be entitled to receive a distribution of $250 per
share plus, in each case, an amount equal to accrued and unpaid dividends to
the date of final distribution.
The Series O Preferred Stock, when and if issued, will be redeemable at the
option of the Corporation, in whole or in part, at any time or from time to
time on not more than 60 and not fewer than 30 days' notice.
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The redemption price payable by the Corporation in respect of any such
redemption will be $300 per share in the case of any redemption occurring on or
before June 1, 1998, and $250 per share in the case of any redemption occurring
thereafter.
7.50% Cumulative Preferred Stock, Series P. On August 17, 1993, the
Corporation filed a Certificate of Amendment to its Certificate of
Incorporation providing for the issuance of 100,000 shares of the Corporation's
7.50% Cumulative Preferred Stock, Series P ($1,000 liquidation preference)
("Series P Preferred Stock") in connection with the issuance by the Corporation
of $100,000,000 of its 7.50% Convertible Capital Securities due 2033 (the
"7.50% Capital Securities"). The interest rate on the 7.50% Capital Securities,
subject to notice, may be reset by the Corporation with respect to all or a
portion of the 7.50% Capital Securities to a rate of 6.00% per annum. Upon an
election by the Corporation to reset the interest rate applicable to a 7.50%
Capital Security, the holder of such 7.50% Capital Security will have the right
to convert such security into depositary shares of the Corporation, each
representing a one-fortieth interest in a share of Series P Preferred Stock.
When and if the Series P Preferred Stock is issued, dividends on the Series P
Preferred Stock will be cumulative. If dividends payable on the Series P
Preferred Stock are in arrears in an amount equivalent to dividends for six
full dividend periods, the number of directors of the Corporation will be
increased by two and the holders of the outstanding Series P Preferred Stock,
voting together as a single class with holders of shares of any other series
preferred stock then outstanding upon which like voting rights have been
conferred and are then exercisable, will be entitled to elect two additional
directors until all dividends in arrears on the Series P Preferred Stock have
been declared and paid or set apart for payment in full. In the event of
liquidation, dissolution or winding up of the Corporation, the holders of the
Series P Preferred Stock will be entitled to receive a distribution of $1,000
per share plus, in each case, an amount equal to accrued and unpaid dividends
to the date of final distribution.
The Series P Preferred Stock, when and if issued, will be redeemable at the
option of the Corporation, in whole or in part, at any time or from time to
time on not more than 60 and not fewer than 30 days' notice. The redemption
price payable by the Corporation in respect of any such redemption will be
$1,200 per share in the case of any redemption occurring on or before August
15, 1998, and $1,000 per share in the case of any redemption occurring
thereafter.
SERIAL PREFERRED STOCK
The Proposed Amendment relating to the serial preferred stock would authorize
10,000,000 shares, which shares of stock upon issuance would have preference
over the Common Stock with respect to the payment of dividends and the
distribution of assets in the event of liquidation, dissolution or winding up
of the Corporation and such other rights, preferences and limitations as may be
fixed by the Board of Directors. The serial preferred stock upon issuance would
rank on a parity with the Series Preferred Stock with respect to the payment of
dividends and the distribution of assets in the event of liquidation,
dissolution or winding up of the Corporation. Dividend provisions, liquidation
preferences, voting rights, if any, sinking fund and redemption provisions, if
any, and conversion and exchange provisions, if any, would be fixed by the
Board of Directors. There are currently no outstanding shares of serial
preferred stock. The Board of Directors has determined not to cause the
Proposed Amendment to be filed at this time.
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities to which this Prospectus relates will
be passed upon for the Corporation by Gordon S. Calder, Jr., Esq., a Managing
Director and Counsel of Bankers, and for any underwriters or agents by Sullivan
& Cromwell, New York, New York. Sullivan & Cromwell performs services for the
Corporation, and may act as special tax counsel to the Corporation in
connection with offerings of Offered Securities. Mr. Calder has an interest in
a number of shares equal to less than .015% of the Corporation's outstanding
Common Stock.
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EXPERTS
The consolidated financial statements of the Corporation for the year ended
December 31, 1992, appearing in the Corporation's Current Report on Form 8-K
dated April 20, 1993, incorporated by reference into this Prospectus, have been
audited by Ernst & Young, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
auditing and accounting.
PLAN OF DISTRIBUTION
The Corporation may sell Offered Securities to one or more underwriters for
public offering and sale by them or may sell Offered Securities to investors
directly or through agents. Any underwriter or agent involved in the offer and
sale of the Offered Securities will be named in the applicable Prospectus
Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Corporation also may offer and sell the Offered
Securities in exchange for one or more of its outstanding issues of debt
securities or Series Preferred Stock. The Corporation also may, from time to
time, authorize firms acting as the Corporation's agents to offer and sell the
Offered Securities upon the terms and conditions as shall be set forth in any
Prospectus Supplement. In connection with the sale of Offered Securities,
underwriters may be deemed to have received compensation from the Corporation
in the form of underwriting discounts or commissions and may also receive
commissions from purchasers of Offered Securities for whom they may act as
agent. Underwriters may sell Offered Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed from
time to time) from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Corporation to underwriters or
agents in connection with the offering of Offered Securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in the applicable Prospectus Supplement.
Underwriters, dealers and agents participating in the distribution of the
Offered Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Securities may be deemed to be underwriting discounts and commissions,
under the Securities Act. Underwriters, dealers and agents may be entitled,
under agreements with the Corporation, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by the Corporation for certain expenses.
If so indicated in the applicable Prospectus Supplement, the Corporation will
authorize dealers acting as the Corporation's agents to solicit offers by
certain institutions to purchase Offered Securities from the Corporation at the
public offering price set forth in such Prospectus Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery on
the date or dates stated in such Prospectus Supplement. Each Contract will be
for an amount not less than, and the aggregate principal amount of Offered
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in such Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be
subject to the approval of the Corporation. Contracts will not be subject to
any conditions except (i) the purchase by an institution of the Offered
Securities covered by its Contracts shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which
such institution is subject, and (ii) if the Offered Securities are being sold
to underwriters, the Corporation shall have sold to such underwriters the total
principal amount of the Offered Securities less the principal amount thereof
covered by Contracts. Agents and underwriters will have no responsibility in
respect of the delivery or performance of Contracts.
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Each series of Offered Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Offered Securities are
sold by the Corporation for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of or the trading markets for any Offered
Securities.
This Prospectus may also be delivered in connection with sales of the Offered
Securities by affiliates of the Corporation that have acquired such Offered
Securities.
The offer and sale of the Offered Securities will comply with the
requirements of Schedule E of the By-Laws of the National Association of
Securities Dealers, Inc. regarding underwriting securities of an affiliate.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, the Corporation in
the ordinary course of business.
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No dealer, salesman or other person has been authorized to give any informa-
tion or to make any representation not contained in this Prospectus Supplement
or the accompanying Prospectus and, if given or made, such information or rep-
resentation must not be relied upon as having been authorized by the Corpora-
tion or any Underwriter. This Prospectus Supplement and the accompanying Pro-
spectus do not constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby in any jurisdiction to any person to whom
it is unlawful to make such offer in such jurisdiction. Neither the delivery of
this Prospectus Supplement or the accompanying Prospectus nor any sale made
hereunder or thereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Corporation since the date
hereof.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Bankers Trust New York Corporation......................................... S-2
Use of Proceeds............................................................ S-8
Certain Terms of the Depositary Shares..................................... S-9
Certain Terms of the Series Q Preferred Stock.............................. S-9
Certain Federal Income Tax Considerations.................................. S-17
Experts.................................................................... S-17
Underwriting............................................................... S-18
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Bankers Trust New York Corporation......................................... 3
Use of Proceeds............................................................ 4
Description of Debt Securities............................................. 4
Foreign Currency Risks..................................................... 12
Description of Series Preferred Stock...................................... 13
Depositary Shares.......................................................... 16
Description of the Corporation's Capital Stock............................. 18
Validity of Offered Securities............................................. 23
Experts.................................................................... 24
Plan of Distribution....................................................... 24
</TABLE>
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8,000,000 Depositary Shares
LOGO BANKERS TRUST
NEW YORK CORPORATION
Each Representing a
One-Hundredth Interest in a Share of
Adjustable Rate Cumulative
Preferred Stock, Series Q
($2,500 Liquidation Preference)
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PROSPECTUS SUPPLEMENT
March 21, 1994
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LEHMAN BROTHERS
SMITH BARNEY SHEARSON INC.
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