<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 33-50395
PROSPECTUS SUPPLEMENT
- ---------------------
(TO PROSPECTUS DATED OCTOBER 15, 1993)
5,000,000 DEPOSITARY SHARES
BANKERS TRUST NEW YORK CORPORATION
EACH REPRESENTING A ONE-HUNDREDTH INTEREST IN A SHARE OF 7 3/4%
CUMULATIVE PREFERRED STOCK, SERIES S ($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 7 3/4%
Cumulative Preferred Stock, Series S ($2,500 Liquidation Preference) (the
"Series S 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 S
Preferred Stock (including dividend, voting, redemption and liquidation
rights). The proportionate liquidation preference of each Depositary Share
will be $25.00. The Depositary Shares are evidenced by depositary receipts
(the "Depositary Receipts"). 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 S Preferred Stock will be cumulative from the date
of original issuance and will be payable quarterly on March 1, June 1,
September 1 and December 1 of each year beginning September 1, 1995. All
dividends payable on shares of the Series S Preferred Stock to the Depositary,
as record holder of the Series S Preferred Stock, will be distributed to the
record holders of the Depositary Shares representing such Series S Preferred
Stock in accordance with the Deposit Agreement. See "Depositary Shares--
Dividends and Other Distributions" in the Prospectus accompanying this
Prospectus Supplement.
The Series S Preferred Stock will be redeemable, in whole or in part, at the
option of the Corporation at any time on or after June 1, 2000 at the
redemption price of $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 S Preferred Stock--Redemption."
Application will be made to list the Depositary Shares on the New York Stock
Exchange. Trading of the Depositary Shares on the New York Stock Exchange is
expected to commence within a 30-day period after the initial delivery of the
Depositary Shares. See "Underwriting."
----------------
THE DEPOSITARY SHARES AND SERIES S 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.
----------------
PRICE $25 PER DEPOSITARY SHARE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2)(3) CORPORATION(1)(3)(4)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Depositary Share $25 $.7875 $24.2125
- ------------------------------------------------------------------------------
Total $125,000,000 $3,937,500 $121,062,500
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued dividends, if any, from the date of original issuance.
(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 $.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 are offered by the several Underwriters, subject to
prior sale, when, as and if issued to and accepted by them and subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected
that delivery of the Depositary Receipts evidencing the Depositary Shares will
be made in New York, New York on or about June 30, 1995.
----------------
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
The date of this Prospectus Supplement is June 27, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEPOSITARY
SHARES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
BANKERS TRUST NEW YORK CORPORATION
GENERAL
Bankers Trust New York Corporation (the "Corporation") is a bank holding
company, incorporated under the laws of the State of New York in 1965. At March
31, 1995, the Corporation had consolidated total assets of $107.4 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,
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, trading liabilities, 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 FIXED CHARGES AND PREFERRED STOCK
DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------ ------------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on Deposits..... 1.28 1.37 1.41 1.69 1.27 .72
Including Interest on Deposits..... 1.15 1.21 1.26 1.47 1.20 .80
</TABLE>
S-2
<PAGE>
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 which 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 three months ended March 31, 1995, earnings, as defined, did not cover
combined fixed charges and preferred stock dividend requirements, including and
excluding interest on deposits, by $242 million, as a result of a net loss
recorded during the period.
CONSOLIDATED RESULTS OF OPERATIONS
The Corporation recorded a loss of $122 million for the quarter ended March
31, 1995, or $1.66 primary loss per share, excluding an after-tax provision for
severance-related costs of $35 million taken in connection with the
Corporation's expense reduction programs. Net loss for the quarter, including
the effect of this provision, was $157 million, or $2.11 primary loss per
share. In the first quarter of 1994, the Corporation earned $164 million, or
$1.90 primary earnings per share.
BUSINESS FUNCTIONS ANALYSIS
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 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.
The following table breaks down earnings on the basis of the Corporation's
five business functions, which represent its core business activities and are
an important tool for analyzing the results of operations. Detailed definitions
of these categories, as well as a discussion of the methodology used to
calculate their results, appear in the 1994 Annual Report on Form 10-K.
BUSINESS FUNCTIONS PROFITABILITY
(IN MILLIONS)
<TABLE>
<CAPTION>
FIRST FIRST
QTR. QTR. INCREASE
1995 1994 (DECREASE)
----- ----- ----------
<S> <C> <C> <C>
Client Finance................................... $ 14 $ 43 $ (29)
Client Advisory.................................. 20 30 (10)
Client Financial Risk Management................. (122) 114 (236)
Client Transaction Processing.................... 8 32 (24)
Trading and Positioning.......................... (36) (49) 13
Unallocated...................................... (41) (6) (35)
----- ---- -----
Income (Loss).................................. $(157) $164 $(321)
===== ==== =====
</TABLE>
Client Finance--Client Finance income was $14 million in the first quarter of
1995, down from $43 million in last year's first quarter. This decline was
principally attributable to lower levels of securities underwriting and loan
syndication fees as general market activity for financings was relatively
slower than the year-ago quarter.
S-3
<PAGE>
Client Advisory--Client Advisory income was $20 million in the first quarter
of 1995, a decline of $10 million from the prior year's first quarter. This
decline was primarily due to a decrease in revenue from funds management
activities offset in part by higher revenue from merger and acquisition and
financial advisory activities.
Client Financial Risk Management--Client Financial Risk Management income
decreased by $236 million from the exceptionally strong period last year
principally due to a sudden absence of liquidity in selected emerging markets
of Latin America. Additionally, while the volume of transactions from risk
management products remained relatively steady, revenue has been reduced as the
mix of business has shifted to lower-margin transactions.
Client Transaction Processing--Client Transaction Processing income was $8
million in the first quarter of 1995, down $24 million from the prior year's
first quarter. This decline was primarily due to a decrease in processing
volumes. Also impacting this function was a higher level of expenses in the
Corporation's Australian subsidiary.
Trading and Positioning--The Corporation recorded a Trading and Positioning
net loss of $36 million during the first quarter of 1995 principally due to
losses in fixed income securities, primarily in Latin America. In the first
quarter of 1994 the Corporation recorded a net loss of $49 million.
Unallocated--Included in the unallocated category during the first quarter of
1995 was a $35 million after-tax provision for severance-related costs
associated with the expense reduction programs.
REVENUE
The table below shows net interest revenue, average balances and average
rates. The tax equivalent adjustment is made to present the revenue and yields
on certain assets, primarily tax-exempt securities and loans, as if such
revenue were taxable.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
---------------- INCREASE
1995 1994 (DECREASE)
------- ------- ----------
<S> <C> <C> <C>
Net Interest Revenue (in millions)
Book basis................................... $ 182 $ 370 $ (188)
Tax equivalent adjustment.................... 15 21 (6)
------- ------- -------
Fully taxable basis.......................... $ 197 $ 391 $ (194)
======= ======= =======
Average Balances (in millions)
Interest-earning assets...................... $78,228 $81,037 $(2,809)
Interest-bearing liabilities................. 75,642 77,935 (2,293)
------- ------- -------
Earnings assets financed by noninterest-bear-
ing funds................................... $ 2,586 $ 3,102 $ (516)
======= ======= =======
Average Rates (fully taxable basis)
Yield on interest-earning assets............. 7.09% 6.17% .92%
Cost of interest-bearing liabilities......... 6.28 4.38 1.90
------- ------- -------
Interest rate spread......................... .81 1.79 (.98)
Contribution of noninterest-bearing funds.... .21 .17 .04
------- ------- -------
Net interest margin.......................... 1.02% 1.96% (.94)%
======= ======= =======
</TABLE>
Net interest revenue for the first quarter of 1995 totaled $182 million, down
$188 million, or 51 percent, from the first quarter of 1994. Of this decline,
$176 million was from trading-related net interest revenue.
S-4
<PAGE>
Combined trading revenue and trading-related net interest revenue for the
first quarter of 1995 was a loss of $77 million, a $268 million decrease from
the first quarter of 1994. The first quarter loss was primarily attributable to
losses sustained in the emerging markets of Latin America. The devaluation of
the Mexican peso and the associated sudden absence of liquidity adversely
affected the Corporation's positions. Additionally, while the volume of
transactions from the Corporation's Client Financial Risk Management activities
remained relatively steady, revenue has been reduced as the mix of business has
shifted to lower-margin transactions.
A significant portion of the Corporation'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 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, as quantified below (in
millions):
<TABLE>
<CAPTION>
TRADING-
RELATED
TRADING NET INTEREST
REVENUE REVENUE TOTAL
------- ------------ -----
<S> <C> <C> <C>
Three months ended March 31, 1995
Interest rate risk........................... $ (57) $ 18 $ (39)
Foreign exchange risk........................ (43) -- (43)
Equity and commodity risk.................... 22 (17) 5
----- ---- -----
Total....................................... $ (78) $ 1 $ (77)
===== ==== =====
Three months ended March 31, 1994
Interest rate risk........................... $ 32 $185 $ 217
Foreign exchange risk........................ (110) -- (110)
Equity and commodity risk.................... 92 (8) 84
----- ---- -----
Total....................................... $ 14 $177 $ 191
===== ==== =====
</TABLE>
Interest Rate Risk--The Corporation's positions in interest rate instruments
and related derivatives were adversely affected by the general volatility in
interest rates that occurred during the first quarter of 1995 coupled with
unusual fluctuations and associated liquidity problems in the emerging markets
of Latin America. As a result, total trading and trading-related net interest
revenue declined $256 million from the exceptionally strong results recorded in
the first quarter of 1994.
Foreign Exchange Risk--Trading revenue improved compared to the first quarter
of 1994, however, the results were negatively affected by the continued
volatility in foreign exchange markets which saw the dollar fall to record lows
against the mark and yen.
Equity and Commodity Risk--The first quarter trading and trading-related net
interest revenue was down $79 million compared to the first quarter of 1994.
The devaluation of the Mexican peso and continued uncertainty regarding the
Argentine economy had a ripple effect on equity prices throughout Latin
America. During the quarter actions by the International Monetary Fund, the
announcement of economic reforms in Argentina, Brazil and Mexico and
considerable public debate about the financial stability in the region
contributed to considerable volatility in the markets.
S-5
<PAGE>
Shown below is a comparison of the components of noninterest revenue (in
millions).
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
-------------- INCREASE
1995 1994 (DECREASE)
------ ------ ----------
<S> <C> <C> <C>
Trading......................................... $ (78) $ 14 $ (92)
Fiduciary and funds management.................. 171 188 (17)
Fees and commissions
Corporate finance fees......................... 72 108 (36)
Service charges on deposit accounts............ 19 22 (3)
Acceptances and letters of credit commissions.. 10 11 (1)
Other.......................................... 44 41 3
------ ------ -----
Total fees and commissions...................... 145 182 (37)
------ ------ -----
Securities available for sale gains............. 2 4 (2)
Other noninterest revenue
Insurance premiums............................. 49 55 (6)
Net revenue from equity investment
transactions.................................. 26 29 (3)
Other.......................................... 27 33 (6)
------ ------ -----
Total other noninterest revenue................. 102 117 (15)
------ ------ -----
Total noninterest revenue....................... $ 342 $ 505 $(163)
====== ====== =====
</TABLE>
Fiduciary and funds management revenue totaled $171 million for the first
quarter, down $17 million, or 9 percent, from the same period last year.
Decreased revenue was recorded by most business activities within this revenue
category, primarily due to a decline in transaction volumes.
Fees and commissions of $145 million decreased by $37 million, or 20 percent,
from the first quarter of 1994. Corporate finance fees of $72 million decreased
by $36 million from the same period last year, due to lower revenue from
securities underwriting and loan syndication fees. These results were partially
offset by higher revenue from merger and acquisition and financial advisory
activities.
The Corporation's securities available for sale gains were $2 million,
compared with $4 million in the prior year's first quarter.
Other noninterest revenue totaled $102 million, down $15 million, or 13
percent, from the prior year's quarter. This decrease was due to a decline in
the category of equity in income of unconsolidated subsidiaries, lower
insurance premium revenue as well as lower net gains from sales of equity
investments and other assets. These factors were partially offset by a lower
level of losses from the revaluation of non-trading foreign currency
investments.
EXPENSES
In response to the lower revenue and reduced market activity in certain
businesses, management has implemented a wide range of expense reduction
programs. These programs were designed to reduce overall operating expenses
(principally, noninterest expenses before bonus and policyholder benefits) by
approximately $200 million in 1995. Management anticipates that these actions
will result in savings of approximately $275 million in 1996.
In order to accomplish these expense reductions, it is anticipated that total
staff will be reduced by approximately 1,400, comprised of 1,000 regular staff
and 400 temporary employees. In order to provide for appropriate cost of
severance, the Corporation has recorded a provision for severance-related cost
of $50 million, pre-tax, in the first quarter. As of the end of the first
quarter, approximately half of the planned staff reductions had been achieved.
The plan will be implemented fully in 1995.
S-6
<PAGE>
Total noninterest expenses of $734 million increased by $93 million, or 15
percent, from the first quarter of 1994. Excluding the provision for severance-
related costs of $50 million, noninterest expenses were $684 million, an
increase of $43 million, or 7 percent, from last year's first quarter.
Incentive compensation and employee benefits expense decreased $29 million, or
18 percent, due primarily to lower bonus expense reflecting the reduced
earnings. Salaries expense increased $31 million, or 18 percent, from the first
quarter of 1994. The average number of employees increased by 5 percent versus
the same period, up to 14,369, whereas the number of employees at March 31,
1995 decreased by 3 percent, to 14,144 from December 31, 1994 as a result of
the initial effect of the expense reduction programs.
All other expenses, excluding the provision for severance-related costs,
totaled $343 million for the quarter, up $41 million, or 14 percent, from last
year's first quarter. Increases in professional fees and agency personnel fees
accounted for more than half of this increase.
INCOME TAXES
Income tax benefit for the first quarter of 1995 amounted to $67 million,
compared with income tax expense of $70 million for the first quarter of 1994.
The effective tax rate was 30 percent for the current and prior year quarters.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
The provision for credit losses is dependent upon management's evaluation as
to the amount needed to maintain the allowance for credit losses at a level
considered appropriate in relation to the risk of losses inherent in the
portfolio.
The Corporation recorded $21 million of net charge-offs and a $14 million
provision for credit losses in the first quarter of 1995. In the prior year's
first quarter, $21 million of net recoveries was recognized and no provision
for credit losses was required. Nonrefinancing country net charge-offs for the
first quarter of 1995 were $28 million, which included $20 million of loans to
highly leveraged borrowers and $8 million of real estate loans, compared with
$2 million of nonrefinancing country net recoveries in the prior year's first
quarter. Leveraged derivative transaction charge-offs for the quarter were
immaterial. Refinancing country recoveries for the first quarter of 1995 were
$7 million, compared with $19 million of recoveries in last year's first
quarter.
The allowance for credit losses, at $1.245 billion at March 31, 1995, was
down $7 million from its level at December 31, 1994. The allowance was equal to
127 percent and 126 percent of total cash basis loans at March 31, 1995 and
December 31, 1994, respectively. The allowance for credit losses is available
for credit losses in the entire portfolio, which is comprised of loans, credit-
related commitments, derivatives and other financial instruments. Therefore,
the Corporation believes that the allowance must be viewed in its entirety.
In the opinion of management, the allowance, when taken as a whole, is
adequate to absorb reasonably estimated credit losses inherent in the
Corporation's portfolio.
On January 1, 1995, the Corporation adopted SFAS 114, "Accounting by
Creditors for Impairment of a Loan" as amended by SFAS 118, "Accounting by
Creditors for Impairment of a Loan--Income Recognition and Disclosure." SFAS
114 requires the creation of a valuation allowance for impaired loans. Under
SFAS 114, a loan is impaired when, based on current information and events, it
is probable that a creditor will be unable to collect all amounts due according
to the loan's contractual terms.
At March 31, 1995, the recorded investment in loans that was considered to be
impaired under SFAS 114 was $1.079 billion which consisted of total cash basis
loans and renegotiated loans. Included in this amount was $632 million of
impaired loans for which the related valuation allowance was $111 million.
S-7
<PAGE>
RECENT DEVELOPMENTS
On March 10, 1995, Moody's Investors Service, Inc. ("Moody's") announced that
it had placed the long-term ratings of the Corporation under review for
possible downgrade, and on June 14, 1995, Moody's lowered the Corporation's
senior debt rating to A2 from A1, its subordinated debt rating to A3 from A2
and its preferred stock rating to "a2" from "a1". On March 13, 1995, Standard
and Poor's Rating Group announced that it had revised the ratings outlook of
the Corporation to negative from stable.
Following the sharp increase in interest rates during the first quarter of
1994, various counterparties that had entered into leveraged derivative
transactions with certain subsidiaries of the Corporation experienced losses
and some of those counterparties have made claims against the Corporation. The
Corporation has settled some of the claims made by certain counterparties and
is contesting allegations made by others, including Procter & Gamble. In
connection with these developments, during the fourth quarter of 1994, the
Corporation placed on a cash basis $423 million of leveraged derivative
transactions which had been reclassified as receivables in its loan account. Of
this amount, the Corporation concurrently charged off $72 million to its
allowance for credit losses. Approximately one half of the remainder relates to
transactions with Procter & Gamble. With these transfers and charge-offs, the
Corporation has reclassified those leveraged derivative transactions that, in
its judgment, are not likely to perform according to the applicable contracts
and has charged off the balances it deemed to be uncollectible. However, there
can be no assurance that there will not be other such actions or claims in the
future.
BT Securities Corporation ("BT Securities"), a subsidiary of the Corporation,
has entered into a settlement agreement with the Securities and Exchange
Commission (the "SEC") and the Commodity Futures Trading Commission (the
"CFTC") concerning all investigations of the Corporation and its subsidiaries
by those agencies with respect to the conduct of its privately negotiated over-
the-counter derivatives (the "Derivatives") business. As part of that
settlement entered into on December 22, 1994, the SEC and the CFTC agreed not
to further pursue Bankers Trust related entities concerning Derivatives matters
prior to the settlement date (although they did reserve the right to pursue
individuals), and BT Securities paid $10 million in civil penalties and agreed
to and has retained independent consultants to examine its conduct of the
Derivatives business. The Corporation also has agreed to implement the
consultants' recommendations.
The Corporation, Bankers and BT Securities have also entered into a Written
Agreement with the Federal Reserve Bank of New York and a Memorandum of
Understanding with the New York State Banking Department concerning the
Corporation's leveraged derivative transactions business, both of which call
for an independent counsel review.
The Corporation cannot predict the effect on the derivatives business
generally, or the Corporation's derivatives business in particular, of these
events or of the current legislative, regulatory and media attention being
given to the derivatives industry.
Details with respect to the foregoing are set forth in the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1994 which is
incorporated herein by reference.
S-8
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION
The following selected consolidated financial data at and for each of the
three years ended December 31, 1992, 1993 and 1994 have been derived from and
are qualified in their 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, 1994 which is incorporated
herein by reference.
The consolidated financial data at and for each of the three months ended
March 31, 1994 and 1995 is unaudited but, in the opinion of management, all
material adjustments necessary for a fair presentation of its results of
operations for such periods have been made. All such adjustments were of a
normal recurring nature. The results for the three months ended March 31, 1995
are not necessarily indicative of the results for the full year or any other
interim period.
<TABLE>
<CAPTION>
AT OR FOR THE
AT OR FOR THE THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- --------------------
1992 1993 1994 1994 1995
------- ------- ------- --------- ---------
($ IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Condensed Consolidated State-
ment of Income:
Interest revenue............. $ 4,219 $ 4,436 $ 5,030 $ 1,211 $ 1,353
Interest expense............. 3,072 3,122 3,858 841 1,171
------- ------- ------- --------- ---------
Net interest revenue......... 1,147 1,314 1,172 370 182
Provision for credit losses.. 225 93 25 -- 14
------- ------- ------- --------- ---------
Net interest revenue after
provision for credit loss-
es.......................... 922 1,221 1,147 370 168
Noninterest revenue.......... 2,331 3,364 2,473 505 342
Noninterest expenses......... 2,347 3,035 2,751 641 734
------- ------- ------- --------- ---------
Income (loss) before income
taxes and cumulative ef-
fects of accounting
changes..................... 906 1,550 869 234 (224)
Income taxes................. 267 480 254 70 (67)
------- ------- ------- --------- ---------
Income (loss) before cumula-
tive effects of accounting
changes..................... 639 1,070 615 164 (157)
Cumulative effects of ac-
counting changes (1)........ 446 (75) -- -- --
------- ------- ------- --------- ---------
Net income (loss)............ $ 1,085 $ 995 $ 615 $ 164 $ (157)
======= ======= ======= ========= =========
Net income (loss) applicable
to common stock............. $ 1,055 $ 972 $ 587 $ 159 $ (165)
======= ======= ======= ========= =========
Per Common Share Data:
Primary earnings (loss) per
share
Income (loss) before cumu-
lative effects of account-
ing changes................ $ 7.23 $ 12.40 $ 7.17 $ 1.90 $ (2.11)
Net income (loss)........... 12.53 11.51 7.17 1.90 (2.11)
Fully diluted earnings
(loss) per share
Income (loss) before cumu-
lative effects of account-
ing changes................ 7.22 12.29 7.17 1.90 (2.11)
Net income (loss)........... 12.51 11.41 7.17 1.90 (2.11)
Cash dividends declared...... 2.88 3.24 3.70 .90 1.00
--as a percentage of net
income (2)................. 40% 26% 52% 47% N/M
Book value (3)............... 43.23 51.90 53.67 52.41 50.04
Profitability Ratios:
Return on average common
stockholders' equity (2).... 19.52% 26.33% 13.48% 14.85% N/M
Return on average total as-
sets (2).................... .86 1.25 .59 .61 N/M
Consolidated Balances, End of
Period:
Trading assets............... $29,908 $48,276 $47,514 $ 56,173 $ 51,603
Loans........................ 17,318 15,200 12,501 13,659 11,731
Total assets................. 72,886 92,082 97,016 103,721 107,362
Deposits..................... 25,071 22,776 24,939 20,049 24,596
Securities sold under repur-
chase agreements............ 17,451 23,834 15,617 25,842 18,631
Other short-term borrowings.. 11,779 18,992 18,222 17,480 16,396
Long-term debt............... 3,992 5,597 6,455 5,693 6,621
Common stockholders' equity.. 3,621 4,284 4,309 4,295 4,029
Total stockholders' equity... 4,121 4,534 4,704 4,745 4,668
Consolidated Capital Ratios,
End of Period:
Common stockholders' equity
to total assets............. 4.97% 4.65% 4.44% 4.14% 3.75%
Total stockholders' equity
to total assets............. 5.65 4.92 4.85 4.57 4.35
Risk-based capital ratios
(1992 year-end guide-
lines)(4)
Tier 1 Capital............. 7.75 8.50 9.05 8.89 8.73
Total Capital.............. 13.64 14.46 14.77 14.66 14.20
Leverage Ratio............... 6.05 6.28 5.26 5.39 5.18
EMPLOYEES..................... 12,917 13,571 14,529 13,748 14,144
</TABLE>
- --------
(1) The Corporation adopted the accounting standards for postretirement
benefits other than pensions (SFAS 106) and post-employment 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.
(4) The 1992 ratios were not restated in connection with the retroactive
adoption of SFAS 109. At both December 31, 1994 and December 31, 1993, all
three regulatory capital ratios excluded any benefit from the adoption of
SFAS 115.
N/M Not Meaningful
S-9
<PAGE>
DESCRIPTION OF THE CORPORATION'S CAPITAL STOCK
The following information supplements the information set forth under
"Description of the Corporation's Capital Stock--Preferred Stock--Series
Preferred Stock" in the accompanying Prospectus.
Fixed/Adjustable Rate Cumulative Preferred Stock, Series D. On September 1,
1994, the Corporation redeemed all of the outstanding shares of its
Fixed/Adjustable Rate Cumulative Preferred Stock, Series D.
7 5/8% Cumulative Preferred Stock, Series O. On June 2, 1993, the Corporation
issued $150 million of 7 5/8% Convertible Capital Securities due June 2033.
These debt securities are subordinated and can be redeemed in whole, but not in
part, on or after June 1, 1998 at par, plus accrued and unpaid interest to the
redemption date. The Corporation, at its option, may reset at any time the
interest rate of the 7 5/8% Convertible Capital Securities to a rate of 6 1/8%
per annum. As previously announced, the Corporation opted to reset the interest
rate to 6 1/8% per annum, effective March 1, 1995. Holders have the right, at
any time prior to redemption or maturity, to convert the debt securities into
depositary shares, at $25 per share, each representing a one-tenth interest in
a share of the Corporation's 7 5/8% Cumulative Preferred Stock, Series O
(Liquidation Preference $250 per share) (the "Series O Preferred Stock").
On June 1, 1995, approximately 5,876,000 depositary receipts had been issued
each evidencing a depositary share representing a one-tenth interest in a share
of the Series O Preferred Stock. The aggregate liquidation preference of the
shares represented by such depositary shares on such date was approximately
$146,900,000.
Dividends on the Series O Preferred Stock are cumulative and payable
quarterly on each March 1, June 1, September 1 and December 1, commencing with
the first such date succeeding original issuance. 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 of 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 any 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. Shares of the Series O
Preferred Stock are redeemable at the Corporation's option, in whole or in
part, at any time at a redemption price of $300 per share on or before June 1,
1998 and thereafter at $250 per share, plus, in each case, accrued and unpaid
dividends to the redemption date.
7.50% Cumulative Preferred Stock, Series P. On August 19, 1993, the
Corporation issued $100 million of 7.50% Convertible Capital Securities due
August 2033. These debt securities are subordinated and can be redeemed, in
whole but not in part, on or after August 15, 1998 at par, plus accrued and
unpaid interest to the redemption date. The Corporation, at its option, may
reset at any time the interest rate on the 7.50% Convertible Capital Securities
to a rate of 6.00% per annum. As previously announced, the Corporation opted to
reset the interest rate to 6.00% per annum, effective May 15, 1995. Holders
have the right, at any time prior to redemption or maturity, to convert the
debt securities into depositary shares, at $25 per share, each representing a
one-fortieth interest in a share of the Corporation's 7.50% Cumulative
Preferred Stock, Series P (Liquidation Preference $1,000 per share) (the
"Series P Preferred Stock").
On May 15, 1995, approximately 3,857,000 depositary receipts had been issued
each evidencing a depositary share representing a one-tenth interest in a share
of the Series P Preferred Stock. The aggregate liquidation preference of the
shares represented by such depositary shares on such date was approximately
$96,424,000.
S-10
<PAGE>
Dividends on the Series P Preferred Stock are cumulative and payable
quarterly on each February 15, May 15, August 15 and November 15, commencing
with the first such date succeeding original issuance. 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 of 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 any 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. Shares of
Series P Preferred Stock are redeemable at the Corporation's option, in whole
or in part, at any time at a redemption price of $1,200 per share on or before
August 15, 1998 and thereafter at $1,000 per share, plus, in each case,
accrued and unpaid dividends to the redemption date.
Adjustable Rate Cumulative Preferred Stock, Series Q. On March 28, 1994, the
Corporation issued 80,000 shares of its Adjustable Rate Cumulative Preferred
Stock, Series Q ($2,500 liquidation preference) (the "Series Q Preferred
Stock"). The dividend rate on the Series Q Preferred Stock is 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 the Series Q Preferred Stock for each quarterly dividend period is 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. If dividends payable on the Series Q 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 Q Preferred Stock, voting together as a
single class with holders of shares of any other series of 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 Q Preferred Stock have been declared
and paid or set apart for payment in full. In the event of any liquidation,
dissolution or winding up of the Corporation, the holders of the Series Q
Preferred Stock will be entitled to receive a distribution of $2,500 per share
plus, in each case, an amount equal to accrued and unpaid dividends to the
date of final distribution. The Series Q Preferred Stock is redeemable at the
option of the Corporation, in whole or in part, at any time or from time to
time on or after March 1, 1999. The redemption price payable by the
Corporation in respect of any such redemption will be $2,500 per share plus
accrued and unpaid dividends to the redemption date.
Adjustable Rate Cumulative Preferred Stock, Series R. On August 22, 1994,
the Corporation issued 60,000 shares of its Adjustable Rate Cumulative
Preferred Stock, Series R ($2,500 liquidation preference) (the "Series R
Preferred Stock"). The dividend rate on the Series R Preferred Stock is equal
to 84.5% 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 the Series R Preferred Stock for each quarterly dividend
period is 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. If dividends payable on the Series R
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 R Preferred Stock,
voting together as a single class with holders of shares of any other series
of 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 R Preferred
Stock have been declared and paid or set apart for payment in full. In the
event of any liquidation, dissolution or winding up of the Corporation, the
holders of the Series R Preferred Stock will be entitled to receive a
distribution of $2,500 per share plus, in each case, an amount equal to
accrued and unpaid dividends to the date of final distribution. The Series R
Preferred Stock is redeemable at the option of the Corporation, in whole or in
part, at any time or from time to time on or after March 1, 1999. The
redemption price payable by the Corporation in respect of any such redemption
will be $2,500 per share plus accrued and unpaid dividends to the redemption
date.
S-11
<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 S Preferred Stock as described
below.
The shares of Series S Preferred Stock represented by the Depositary Shares
will be deposited under the Deposit Agreement, dated as of June 30, 1995 (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 S 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 S Preferred Stock represented by such
Depositary Share, to all rights and preferences of a share of the Series S
Preferred Stock (including dividend, voting, redemption and liquidation
rights). See "Certain Terms of the Series S 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 S Preferred Stock
and acts as transfer agent, dividend disbursing agent and registrar for the
Corporation's Common Stock and 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 S PREFERRED STOCK
The following description of certain terms of the Series S 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 S 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 S
Preferred Stock set forth below does not purport to be complete and is subject
to and qualified in its entirety by reference to the 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 Certificate of Incorporation relating to the Series S
Preferred Stock adopted by the Board of Directors of the Corporation, or a duly
authorized committee thereof, 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 S
Preferred Stock. The Certificate of Amendment will be filed with the Commission
on or about the date of original issuance of the Series S Preferred Stock.
DIVIDEND RIGHTS
Dividends will be cumulative 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 succeeding the date of original issuance of the Series S Preferred Stock
(each a "Dividend Payment Date"), at the rate of 7 3/4% of the liquidation
preference per annum (equivalent to $1.9375 per annum per Depositary Share), to
the holders of record at the close of business on the fifteenth day of the
month next preceding the month in which the related Dividend Payment Date
occurs. Dividends
S-12
<PAGE>
payable on the Series S Preferred Stock for any period less than a full quarter
will be computed on the basis of the 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. 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 will 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 S 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 S 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, is declared and paid or set apart for payment on all shares of Series
S 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
S Preferred Stock as to dividends, then issued and outstanding and entitled to
receive dividends. Holders of shares of Series S 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 Series S Preferred Stock.
So long as any shares of Series S Preferred Stock are outstanding, unless the
full cumulative dividends on all outstanding shares of Series S 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 S 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 Series S 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 Series S 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 Series S
Preferred Stock as to dividends and distribution of assets upon liquidation,
dissolution or winding up.
VOTING RIGHTS
Whenever, at any time or times, dividends payable on shares of Series S
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 S 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 upon which like voting rights have been
conferred and are then exercisable, to the exclusion of the holders of the
Common Stock, the holders of any other series of series preferred stock upon
which such voting rights have not been conferred or are then not exercisable,
and 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 S Preferred Stock have been declared and paid or set
apart for payment in full. The right of the holders of Series S 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 S 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 Certificate of Incorporation,
S-13
<PAGE>
as amended, of the Corporation 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 Certificate of Incorporation, as amended, of the
Corporation 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 S 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 S Preferred Stock remain outstanding, unless
the vote or consent of the holders of a greater number of shares is then
required by law and subject to any other voting rights that may be conferred on
other series of series preferred stock or greater percentage that may be
required under the terms of such series of series preferred stock, the
affirmative vote or consent of the holders of (a) at least 66 2/3% of the
shares of Series S Preferred Stock and (b) the holders of at least a majority
of the shares of the Series S 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, will 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 S 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 provisions of the Certificate of Incorporation,
as amended, as further amended by the Certificate of Amendment
relating to the Series S Preferred Stock, which would materially and
adversely affect any right, preference, privilege or voting right 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 S
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 S Preferred Stock then outstanding;
provided further, however, that the authorization, establishment,
designation, issuance or sale of other series preferred stock will 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, will 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 is then required by law and subject to any other voting rights that may
be conferred on other series of series preferred stock or greater percentage
that may be required under the terms of such series of series preferred stock,
the affirmative vote or consent of the holders of at least a majority of the
shares of Series S 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
S-14
<PAGE>
resolution at any special or annual meeting called for the purpose, will 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 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, will 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 S Preferred Stock.
Holders of Series S Preferred Stock will be entitled to one vote for each
share of such stock held on matters as to which holders are entitled to vote.
Under regulations adopted by the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), if the holders of Series S 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. In addition,
at such time, (i) any bank holding company may be required to obtain the
approval of the Federal Reserve Board under the Bank Holding Company Act of
1956, as amended, to acquire or retain 5% or more of the Series S 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 or retain 10% or more of the Series S 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 S Preferred
Stock will be entitled to receive out of assets of the Corporation available
for distribution to stockholders, 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 shares of Series S Preferred Stock, upon liquidation,
liquidating distributions in the amount of $2,500 per share (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.
See "Description of Series Preferred Stock--Liquidation Rights" in the
Prospectus accompanying this Prospectus Supplement.
REDEMPTION
The Series S Preferred Stock will be redeemable at the option of the
Corporation, as a whole or from time to time in part, at any time on or after
June 1, 2000 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 $2,500 per share (equivalent to $25 per Depositary Share), in each case
plus accrued and unpaid dividends (whether or not declared) to the date fixed
for redemption.
S-15
<PAGE>
If the Corporation has duly mailed notice of redemption or if the Corporation
has given to a Paying Agent (as defined below) irrevocable authorization
promptly to mail such notice, and if on or before the redemption date specified
therein the funds necessary for such redemption have been deposited by the
Corporation with such Paying Agent in trust for the pro rata benefit of the
holders of the shares of Series S Preferred Stock called for redemption, then,
even if any certificate for shares of Series S Preferred Stock so called for
redemption has not been surrendered for cancellation, from and after the time
of such deposit, (i) dividends on the shares of Series S Preferred Stock called
for redemption will cease to accrue from and after the date fixed for
redemption, (ii) all shares of Series S Preferred Stock so called for
redemption will no longer be deemed to be outstanding and (iii) all rights with
respect to such shares of Series S Preferred Stock will terminate immediately,
except only the right of the holders of such shares to receive from such Paying
Agent at any time after the time of such deposit the funds so deposited,
without any interest on such funds. 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 is 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 immediate 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 S Preferred Stock called for
redemption upon surrender of certificates for such shares (properly endorsed or
assigned for transfer).
Any interest accrued on funds deposited with a Paying Agent in connection
with any redemption of shares of Series S 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 S Preferred Stock so called for redemption will 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 less than all the outstanding shares of Series S Preferred Stock
unless full cumulative dividends have been declared and paid or set apart for
payment on all outstanding shares of Series S Preferred Stock for all prior
dividend periods; provided that the foregoing will not prevent, if otherwise
permitted, the purchase or acquisition of shares of Series S Preferred Stock
pursuant to a tender or exchange offer made on the same terms to holders of all
the outstanding shares of Series S 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
less than all, of the shares of Series S 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 S 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 S Preferred Stock.
Any optional redemption of shares of Series S Preferred Stock 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 S Preferred Stock. The holders of
Series S 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
S-16
<PAGE>
issued, the Series S Preferred Stock will be fully paid and nonassessable. The
Certificate of Amendment of the Certificate of Incorporation of the
Corporation, as amended, setting forth the provisions of the Series S Preferred
Stock will become effective after the date of this Prospectus Supplement but on
or before issuance of the Series S Preferred Stock.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following brief description of certain Federal income tax considerations
of the ownership of Depositary Shares representing the Series S Preferred Stock
reflects the opinion of Sullivan & Cromwell, special tax counsel to the
Corporation. Hereinafter, references in this section to Series S Preferred
Stock will mean either the Series S Preferred Stock or Depositary Shares
representing the Series S Preferred Stock, as the case may be. This description
is a summary only, and each purchaser of Series S 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 S 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 S 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 S Preferred Stock.
Dividends declared and paid by the Corporation with respect to the Series S
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 and will be eligible for the 70%
dividends-received deduction allowed to corporate shareholders. Corporate
holders of shares of Series S Preferred Stock should consider the effects of
(i) Section 246(c) of the Internal Revenue Service 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 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. The alternative minimum tax treatment of the dividends-received
deduction should also be considered.
Dividends on the Series S Preferred Stock will not be increased if there is a
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, 1994, incorporated
by reference in this Prospectus Supplement, the accompanying Prospectus and the
Registration Statement, have been audited by Ernst & Young LLP, 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.
VALIDITY OF SERIES S PREFERRED STOCK
The validity of the Series S Preferred Stock will be passed upon for the
Corporation by Gordon S. Calder, Jr., Esq., a Managing Director and Counsel of
Bankers, and for the Underwriters by White & Case, New York, New York. White &
Case performs services for the Corporation from time to time. Mr. Calder has an
interest in a number of shares equal to less than 0.015 percent of the
Corporation's outstanding common stock. The foregoing supersedes "Validity of
Offered Securities" in the Prospectus.
S-17
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
dated June 27, 1995 (the "Underwriting Agreement"), the Corporation has agreed
to sell to each of the Underwriters named below (the "Underwriters"), and each
of the Underwriters, for whom Smith Barney Inc., Dean Witter Reynolds Inc.,
Goldman, Sachs & Co., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, PaineWebber Incorporated and Prudential Securities
Incorporated are acting as representatives (the "Representatives"), has
severally agreed to purchase, the respective number of Depositary Shares set
forth opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
DEPOSITARY
UNDERWRITER SHARES
----------- ----------
<S> <C>
Smith Barney Inc.............. 535,000
Dean Witter Reynolds Inc. .... 535,000
Goldman, Sachs & Co. ......... 535,000
Lehman Brothers Inc. ......... 535,000
Merrill Lynch, Pierce, Fenner
& Smith
Incorporated................ 535,000
PaineWebber Incorporated...... 535,000
Prudential Securities Incorpo-
rated........................ 535,000
Advest, Inc. ................. 30,000
BT Securities Corporation..... 77,500
Bear, Stearns & Co. Inc. ..... 77,500
J.C. Bradford & Co. .......... 30,000
Alex. Brown & Sons Incorporat-
ed........................... 77,500
Cowen & Company............... 30,000
Craigie Incorporated.......... 30,000
Dain Bosworth Incorporated.... 30,000
Dillon, Read & Co. Inc. ...... 77,500
Doft & Co., Inc. ............. 30,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
DEPOSITARY
UNDERWRITER SHARES
----------- ----------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation...... 77,500
A. G. Edwards & Sons, Inc. .. 77,500
Furman Selz Incorporated..... 30,000
Janney Montgomery Scott
Inc. ....................... 30,000
Kemper Securities, Inc. ..... 77,500
Legg Mason Wood Walker, In-
corporated.................. 30,000
McDonald & Company Securi-
ties, Inc. ................. 30,000
McGinn, Smith & Co., Inc. ... 30,000
Morgan Keegan & Company,
Inc. ....................... 30,000
Morgan Stanley & Co. Incorpo-
rated....................... 77,500
Oppenheimer & Co., Inc. ..... 77,500
Piper Jaffray Inc. .......... 30,000
Rauscher Pierce Refsnes,
Inc. ....................... 30,000
Raymond James & Associates,
Inc. ....................... 77,500
The Robinson-Humphrey Compa-
ny, Inc. ................... 30,000
Wheat, First Securities,
Inc. ....................... 30,000
---------
Total...................... 5,000,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
to pay for and accept delivery of the Depositary Shares are subject to the
approval of certain legal matters by their counsel and to certain other
conditions.
The Underwriters propose to offer part of the Depositary Shares directly to
the public at the public offering price set forth on the cover page hereof and
part to certain dealers at a price that represents a concession not in excess
of $.50 per Depositary Share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $.25 per Depositary Share to certain
other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
The Corporation has agreed to indemnify the Underwriters against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended.
The Depositary Shares are a new issue of securities with no established
trading market. Application will be 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; however, it is expected that
the Depositary Shares will commence trading on the New York Stock Exchange
within a 30-day period after the initial delivery of the Depositary Shares. The
Corporation has been advised by the Representatives that they presently intend
to make a market in the Depositary Shares, although they are under no
obligation to do so and they may discontinue any such market making at any time
in their sole discretion. Accordingly, no assurance can be given as to the
liquidity of, or the trading markets for, the Depositary Shares.
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.
BT Securities is a wholly owned subsidiary of the Corporation. The
underwriting arrangements for this offering comply with the requirements of
Schedule E of the By-laws of the National Association of Securities Dealers,
Inc. ("NASD") regarding an NASD member firm's underwriting securities of an
affiliate.
S-18
<PAGE>
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE CORPORATION OR THE UNDERWRITERS. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
OR IN THE AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS ARE NOT AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE DEPOSITARY SHARES OFFERED HEREBY IN ANY JURISDICTION IN WHICH
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-----------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Bankers Trust New York Corporation......................................... S-2
Selected Consolidated Financial Data and Other Information................. S-9
Certain Terms of the Depositary Shares..................................... S-12
Certain Terms of the Series S Preferred Stock.............................. S-12
Certain Federal Income Tax
Considerations............................................................ S-17
Experts.................................................................... S-17
Validity of Series S Preferred Stock....................................... 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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BANKERS TRUST
NEW YORK CORPORATION
5,000,000 DEPOSITARY SHARES
EACH REPRESENTING A ONE-HUNDREDTH
INTEREST IN A SHARE OF 7 3/4%
CUMULATIVE PREFERRED STOCK, SERIES S
($2,500 LIQUIDATION PREFERENCE)
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PROSPECTUS SUPPLEMENT
JUNE 27, 1995
-------
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
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