<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 18, 1997
REGISTRATION NOS. 333-22733 AND 333-22733-01
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
BANKERS TRUST NEW YORK CORPORATION BT CAPITAL TRUST B
(EXACT NAME OF REGISTRANT AS SPECIFIED (EXACT NAME OF REGISTRANT AS SPECIFIED
IN ITS CHARTER) IN ITS TRUST AGREEMENT)
NEW YORK DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
6712 6719
(PRIMARY STANDARD INDUSTRIAL (PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER) CLASSIFICATION CODE NUMBER)
13-6180473 APPLIED FOR
(I.R.S. EMPLOYER IDENTIFICATION (I.R.S. EMPLOYER IDENTIFICATION
NUMBER) NUMBER)
C/O BANKERS TRUST NEW YORK CORPORATION
130 LIBERTY STREET 130 LIBERTY STREET
NEW YORK, NEW YORK 10006 NEW YORK, NEW YORK 10006
(212) 250-2500 (212) 250-2500
(ADDRESS, INCLUDING ZIP CODE, AND (ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE, TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES) OFFICES)
---------------
GORDON S. CALDER, JR., ESQ.
MELVIN A. YELLIN, ESQ.
BANKERS TRUST NEW YORK CORPORATION
130 LIBERTY STREET
NEW YORK, NEW YORK 10006
(212) 250-2500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH A COPY TO:
ROBERT E. BUCKHOLZ, JR., ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As promptly as practicable after the effective date of this Registration
Statement.
---------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED (1) PER UNIT(2) PRICE(2) FEE
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.90% Junior
Subordinated Deferrable
Interest Debentures,
Series B1 of Bankers
Trust New York
Corporation (2)....... $250,000,000 $1,000.00 $250,000,000 N/A
- -------------------------------------------------------------------------------------
7.90% Capital
Securities, Series B1
of BT Capital Trust B
(3)................... 250,000 $1,000.00 $250,000,000 $75,758
- -------------------------------------------------------------------------------------
Guarantee of Bankers
Trust New York
Corporation
with respect to 7.90%
Capital Securities,
Series B1 (3)(4)...... N/A N/A N/A N/A
- -------------------------------------------------------------------------------------
Total ................. $250,000,000(5) 100% $250,000,000(5) $75,758
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the registration fee.
(2) The 7.90% Junior Subordinated Deferrable Interest Debentures, Series B1
will be purchased by BT Capital Trust B with the proceeds of the sale of the
7.90% Capital Securities, Series B1. No separate consideration will be
received from purchasers of 7.90% Capital Securities, Series B1 for the
7.90% Junior Subordinated Deferrable Interest Debentures, Series B1.
(3) This Registration Statement is deemed to cover the 7.90% Junior
Subordinated Deferrable Interest Debentures, Series B1 of Bankers Trust New
York Corporation, the rights of holders of 7.90% Junior Subordinated
Deferrable Interest Debentures, Series B1 under the related Indenture, the
rights of holders of 7.90% Capital Securities, Series B1 of BT Capital Trust
B under the Trust Agreement of BT Capital Trust B, and the rights of holders
of the 7.90% Capital Securities, Series B1 under the Guarantee of Bankers
Trust New York Corporation, which taken together with the Expense Agreement
entered into by Bankers Trust New York Corporation, fully and
unconditionally guarantee the obligations of BT Capital Trust B under the
7.90% Capital Securities, Series B1.
(4) No separate consideration will be received for the Bankers Trust New York
Corporation Guarantee.
(5) Such amounts represent the aggregate liquidation amount of 7.90% Capital
Securities, Series B1 to be issued and exchanged hereunder and the principal
amount of 7.90% Junior Subordinated Deferrable Interest Debentures, Series
B1 that may be distributed upon liquidation of BT Capital Trust B.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE SHEET PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING THE
LOCATION IN THE PROSPECTUS OF THE RESPONSES TO THE ITEMS OF PART I OF FORM S-4
<TABLE>
<CAPTION>
FORM S-4 ITEM LOCATION IN PROSPECTUS
------------- ----------------------
<C> <S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus... Outside Front Cover Page;
Facing Page
2. Inside Front and Outside Back Cover Pages
of Prospectus............................ Available Information; Outside
Back Cover Page
3. Risk Factors, Ratio of Earnings to Fixed
Charges, and Other Information........... Risk Factors; Bankers Trust New
York Corporation
4. Terms of the Transaction................. Outside Front Cover Page;
Summary; Bankers Trust New York
Corporation; BT Capital Trust
B; Use of Proceeds;
Capitalization; Accounting
Treatment; The Exchange Offer;
Description of New Securities;
Relationship Among the New
Capital Securities, the New
Junior Subordinated Debentures,
the New Guarantee and the New
Expense Agreement; Description
of Old Securities; Certain
Federal Income Tax
Consequences; Certain ERISA
Considerations; Plan of
Distribution
5. Pro Forma Financial Information.......... Incorporation of Certain
Documents by Reference;
Capitalization
6. Material Contracts With the Company Being
Acquired................................. Outside Front Cover; The
Exchange Offer
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters....................... *
8. Interests of Named Experts and Counsel... Validity of New Securities;
Experts
9. Disclosure of Commission Position on
Indemnification For Securities Act
Liabilities.............................. *
10. Information With Respect to S-3
Registrants.............................. Available Information;
Incorporation of Certain
Documents by Reference;
Summary; Bankers Trust New York
Corporation
11. Incorporation of Certain Information by
Reference................................ Incorporation of Certain
Documents by Reference
12. Information With Respect to S-2 or S-3
Registrants.............................. *
13. Incorporation of Certain Information by
Reference................................ *
14. Information With Respect to Registrants
Other Than S-3 or S-2 Registrants........ Available Information; BT
Capital Trust B
15. Information With Respect to S-3
Companies................................ *
16. Information With Respect to S-2 or S-3
Companies................................ *
17. Information With Respect to Companies
Other Than S-2 or S-3 Companies.......... *
18. Information if Proxies, Consents or
Authorizations Are to be Solicited....... *
19. Information if Proxies, Consents or
Authorizations Are Not to be Solicited,
or in an Exchange Offer.................. Incorporation of Certain
Documents by Reference
</TABLE>
- --------
* Not Applicable.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUBJECT TO COMPLETION, DATED MARCH 18, 1997
$250,000,000
BT CAPITAL TRUST B
OFFER TO EXCHANGE ITS 7.90% CAPITAL SECURITIES, SERIES B1 WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, FOR ANY
AND ALL OF THE OUTSTANDING 7.90% CAPITAL SECURITIES, SERIES A1 OF BT CAPITAL
TRUST A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
[LOGO]BANKERS TRUST NEW YORK CORPORATION
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON APRIL 17, 1997, UNLESS EXTENDED.
---------------
Bankers Trust New York Corporation, a New York corporation (the
"Corporation"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus (as the same may be amended or supplemented from time
to time, this "Prospectus") and in the accompanying Letter of Transmittal
(which together constitute the "Exchange Offer"), to exchange up to
$250,000,000 aggregate Liquidation Amount (as defined herein) of the 7.90%
Capital Securities, Series B1 (Liquidation Amount $1,000 per Capital Security)
(the "New Capital Securities") of BT Capital Trust B, a statutory business
trust created under the laws of the State of Delaware (the "Issuer Trust"),
which have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement (as defined herein) of
which this Prospectus constitutes a part, for a like liquidation amount of the
outstanding 7.90% Capital Securities, Series A1 (Liquidation Amount $1,000 per
Capital Security) (the "Old Capital Securities") of BT Capital Trust A, a
statutory business trust created under the laws of the State of Delaware (the
"Old Issuer Trust"), of which $250,000,000 aggregate Liquidation Amount is
outstanding. The New Capital Securities will have the benefit of the New
Guarantee (as defined herein) of the Corporation, which will be identical in
all material respects (except as described herein) to the guarantee agreement
relating to the Old Capital Securities (the "Old Guarantee"). The Issuer Trust
will hold 7.90% Junior Subordinated Deferrable Interest Debentures, Series B1,
of the Corporation (the "New Junior Subordinated Debentures"), in an aggregate
principal amount equal to the aggregate Liquidation Amount of the New Trust
Securities (as defined herein) issued pursuant to the Exchange Offer, which
will be identical in all material respects (except as described herein) to the
Corporation's 7.90% Junior Subordinated Deferrable Interest Debentures, Series
A1 (the "Old Junior Subordinated Debentures"), of which $257,732,000 aggregate
principal amount is outstanding. The New Guarantee and the New Junior
Subordinated Debentures also have been registered under the Securities Act. The
Old Capital Securities, the Old Guarantee and the Old Junior Subordinated
Debentures are collectively referred to herein as the "Old Securities" and the
New Capital Securities, the New Guarantee and the New Junior Subordinated
Debentures are collectively referred to herein as the "New Securities."
The terms of the New Securities are identical in all material respects to the
respective terms of the Old Securities, except that (i) the New Securities have
been registered under the Securities Act and therefore will not be subject to
certain of the restrictions on transfer applicable to the Old Securities, (ii)
the New Capital Securities will not provide for any increase in the rate at
which Distributions (as defined herein) accumulate thereon and (iii) the New
Junior Subordinated Debentures will not provide for any increase in the
interest rate thereon. See "Description of New Securities" and "Description of
Old Securities." The New Capital Securities are being offered for exchange in
order to satisfy certain obligations of the Corporation and the Old Issuer
Trust under the Exchange and Registration Rights Agreement, dated as of January
16, 1997 (the "Registration Rights Agreement"), among the Corporation, the Old
Issuer Trust and the Initial Purchaser (as defined herein) of the Old Capital
Securities.
(Continued on next page)
-----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 15 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE CAPITAL SECURITIES.
-----------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
The date of this Prospectus is March 18, 1997.
<PAGE>
(cover page continued)
The New Capital Securities represent preferred undivided beneficial
interests in the assets of the Issuer Trust. The Corporation will initially be
the holder of all the common undivided beneficial interests in the assets of
the Issuer Trust ("New Common Securities" and, collectively with the New
Capital Securities, the "New Trust Securities"). The Issuer Trust exists for
the sole purpose of issuing the New Trust Securities and holding the New
Junior Subordinated Debentures, and engaging in only those activities
necessary or incidental thereto. The New Junior Subordinated Debentures will
mature on January 15, 2027 (the "Stated Maturity"). The New Capital Securities
will have a preference under certain circumstances over the New Common
Securities with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise. See "Description of New Securities--
Description of New Capital Securities--Subordination of New Common
Securities."
Except as described herein, the New Capital Securities will be represented
by global New Capital Securities to be deposited with a custodian for and
registered in the name of a nominee for The Depository Trust Company ("DTC").
Beneficial interests in the global New Capital Securities will be shown on,
and transfers thereof will be effected only through, records maintained by DTC
and its direct and indirect participants. Beneficial interests in such New
Capital Securities will trade in DTC's Same-Day Funds Settlement System and
secondary market trading activity in such interests will therefore settle in
immediately available funds. The New Capital Securities will be issued, and
may be held or transferred, only in blocks having a Liquidation Amount of not
less than $100,000 (100 New Capital Securities). Accordingly, any holder must
own at least 100 New Capital Securities. See "Description of New Securities--
Description of New Capital Securities--Book-Entry, Delivery and Form."
Holders of the New Capital Securities will be entitled to receive
preferential cumulative cash distributions ("Distributions") accumulating from
the most recent distribution date on the Old Capital Securities surrendered in
exchange for such New Capital Securities or, if no distributions have been
paid on such Old Capital Securities, from January 16, 1997. Such Distributions
will be payable semi-annually in arrears on January 15 and July 15 of each
year, commencing on the first such date following the date of original
issuance of the New Capital Securities, at the annual rate of 7.90% of the
Liquidation Amount of $1,000 per New Capital Security. The Corporation has the
right to defer payment of interest on the New Junior Subordinated Debentures
at any time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each deferral period (each, an "Extension
Period"), provided that no Extension Period may extend beyond the Stated
Maturity of the New Junior Subordinated Debentures as in effect on the date on
which the Corporation elects to effect such deferral. Upon the termination of
any such Extension Period and the payment of all amounts then due, the
Corporation may elect to begin a new Extension Period subject to the
requirements set forth herein. If interest payments on the New Junior
Subordinated Debentures are so deferred, Distributions on the New Capital
Securities will also be deferred and the Corporation will not be permitted,
subject to certain exceptions described herein, to declare or pay any cash
distributions with respect to the Corporation's capital stock or with respect
to debt securities of the Corporation that rank pari passu in all respects
with or junior to the New Junior Subordinated Debentures. During an Extension
Period, interest on the New Junior Subordinated Debentures will continue to
accrue (and the amount of Distributions to which holders of the New Capital
Securities are entitled will accumulate) at the rate of 7.90% per annum,
compounded semi-annually, and holders of New Capital Securities will be
required to accrue interest income for United States federal income tax
purposes. See "Description of New Securities--Description of New Junior
Subordinated Debentures--Option to Extend Interest Payment Period" and
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount."
The Corporation has, through the New Guarantee, the New Trust Agreement, the
New Junior Subordinated Debentures, the New Junior Subordinated Indenture and
the New Expense Agreement (each as defined herein), taken together, fully,
irrevocably and unconditionally guaranteed all of the Issuer Trust's
obligations under the New Capital Securities. See "Relationship Among the New
Capital Securities, the New Junior Subordinated Debentures, the New Guarantee
and the New Expense Agreement--Full and Unconditional Guarantee." The New
Guarantee guarantees the payment of Distributions and payments on liquidation
or redemption of the New Capital Securities, but only in each case to the
extent of funds available therefor held by the Issuer Trust, as described
herein. See "Description of New Securities--Description of New Guarantee." If
the Corporation does not make payments on the New Junior Subordinated
Debentures held by the Issuer Trust, the Issuer Trust may have insufficient
funds to pay Distributions on
2
<PAGE>
(cover page continued)
the New Capital Securities. The New Guarantee does not cover payment of
Distributions when the Issuer Trust does not have sufficient funds to pay such
Distributions. In such event, a holder of New Capital Securities may institute
a legal proceeding directly against the Corporation to enforce payment of such
Distributions to such holder. See "Description of New Securities--Description
of New Junior Subordinated Debentures--Enforcement of Certain Rights by
Holders of New Capital Securities." The obligations of the Corporation under
the New Guarantee and the New Junior Subordinated Debentures are subordinate
and junior in right of payment to all Senior Indebtedness (as defined herein)
of the Corporation.
The New Capital Securities are subject to mandatory redemption, in whole or
in part, upon repayment of the New Junior Subordinated Debentures at Stated
Maturity or their earlier redemption. The New Junior Subordinated Debentures
are redeemable prior to maturity at the option of the Corporation (i) on or
after January 15, 2007, in whole at any time or in part from time to time, or
(ii) in certain circumstances as described under "Description of New
Securities--Description of New Junior Subordinated Debentures--Conditional
Right to Shorten Maturity or Redeem Upon a Tax Event, Investment Company Event
or Capital Treatment Event," in whole (but not in part) at any time within 90
days following the occurrence and continuation of a Tax Event, Investment
Company Event or Capital Treatment Event (each as defined herein) (or, if the
approval of the Federal Reserve (as defined herein) is then required for such
redemption, on such later date as promptly as reasonably practicable after
such approval is obtained), in each case at the applicable Redemption Price
(as defined herein), which includes the accrued and unpaid interest on the New
Junior Subordinated Debentures so redeemed to the date fixed for redemption.
The Corporation has committed to the Board of Governors of the Federal Reserve
System (the "Federal Reserve") that the Corporation will not exercise its
rights to redeem the New Junior Subordinated Debentures or cause the
redemption of the New Capital Securities prior to the Stated Maturity without
having received the prior approval of the Federal Reserve to do so, if then
required under applicable Federal Reserve capital guidelines or policies. See
"Description of New Securities--Description of New Junior Subordinated
Debentures--Redemption."
The holder of all the New Common Securities has the right at any time to
dissolve the Issuer Trust and, after satisfaction of liabilities to creditors
of the Issuer Trust as provided by applicable law, to cause the New Junior
Subordinated Debentures to be distributed to the holders of the New Capital
Securities and New Common Securities in liquidation of the Issuer Trust. The
Corporation has committed to the Federal Reserve that, so long as the
Corporation (or any affiliate) is the holder of all the New Common Securities,
the Corporation (or such affiliate) will not so dissolve the Issuer Trust
without having received the prior approval of the Federal Reserve to do so, if
then required under applicable Federal Reserve capital guidelines or policies.
See "Description of New Securities--Description of New Capital Securities--
Liquidation Distribution Upon Termination."
If the Issuer Trust is dissolved, then after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, the holders of
the New Capital Securities will be entitled to receive a Liquidation Amount of
$1,000 per New Capital Security plus accumulated and unpaid Distributions
thereon to the date of payment, subject to certain exceptions, which may be in
the form of a distribution of a Like Amount (as defined herein) of New Junior
Subordinated Debentures. See "Description of New Securities--Description of
New Capital Securities--Liquidation Distribution Upon Termination."
The Corporation is making the Exchange Offer of the New Capital Securities
in reliance on the position of the staff of the Division of Corporation
Finance of the Securities and Exchange Commission (the "Commission") as set
forth in certain interpretive letters addressed to third parties in other
transactions. However, neither the Corporation nor the Issuer Trust has sought
its own interpretive letter, and there can be no assurance that the staff of
the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance, and subject to the two
immediately following sentences, the Corporation believes that New Capital
Securities issued pursuant to this Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the
3
<PAGE>
(cover page continued)
Securities Act) of such New Capital Securities. However, any holder of Old
Capital Securities who is an "affiliate" of the Corporation, the Issuer Trust
or the Old Issuer Trust within the meaning of Rule 405 under the
Securities Act (an "Affiliate") or who intends to participate in the Exchange
Offer for the purpose of distributing New Capital Securities, or any broker-
dealer who purchased Old Capital Securities from the Old Issuer Trust to
resell pursuant to Rule 144A under the Securities Act ("Rule 144A") or any
other available exemption under the Securities Act, (i) will not be able to
rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive
letters, (ii) will not be entitled to tender such Old Capital Securities in
the Exchange Offer and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
other transfer of such Old Capital Securities unless such sale is made
pursuant to an exemption from such requirements. In addition, as described
below, if any broker-dealer (a "Participating Broker-Dealer") holds Old
Capital Securities acquired for its own account as a result of market-making
or other trading activities and exchanges such Old Capital Securities for New
Capital Securities, then such Participating Broker-Dealer must deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required
to represent that (i) it is not an Affiliate, (ii) any New Capital Securities
to be received by it are being acquired in the ordinary course of its
business, (iii) it has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the Securities Act) of
such New Capital Securities, and (iv) if such holder is not a broker-dealer,
such holder is not engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securities Act) of such New Capital
Securities. The Letter of Transmittal contains the foregoing representations.
In addition, the Corporation may require such holder, as a condition to such
holder's eligibility to participate in the Exchange Offer, to furnish to the
Corporation (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) on behalf of whom such
holder holds the Old Capital Securities to be exchanged in the Exchange Offer.
Each Participating Broker-Dealer that receives New Capital Securities for its
own account pursuant to the Exchange Offer will be deemed to have acknowledged
by execution of the Letter of Transmittal or delivery of an Agent's Message
(as defined herein) that it acquired the Old Capital Securities for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such New Capital
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters referred to above, the
Corporation believes that Participating Broker-Dealers, may fulfill their
prospectus delivery requirements with respect to the New Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities that represent an unsold allotment from the original sale of the
Old Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such New Capital Securities. Accordingly, this Prospectus may be
used by a Participating Broker-Dealer during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making
or other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Issuer Trust have
agreed that this Prospectus may be used by a Participating Broker-Dealer in
connection with resales of such New Capital Securities for a period ending 90
days after the Expiration Date (as defined herein) or, if earlier, when all
such Capital Securities have been disposed of by such Participating Broker-
Dealer. See "Plan of Distribution." Any person, including any Participating
Broker-Dealer, who is an Affiliate may not rely on such interpretive letters
and must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. See "The
Exchange Offer--Resales of New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of an Agent's Message (as
defined herein) that, upon receipt of notice from the Corporation or the
Issuer Trust of the occurrence of any event or
4
<PAGE>
(cover page continued)
the discovery of any fact which makes any statement contained or incorporated
by reference in this Prospectus untrue in any material respect or which causes
this Prospectus to omit to state a material fact necessary in order to make
the statements contained or incorporated by reference herein, in the light of
the circumstances under which they were made, not misleading, or of the
occurrence of certain other events specified in the Registration Rights
Agreement, such Participating Broker-Dealer will suspend the sale of New
Securities pursuant to this Prospectus until the Corporation or the Issuer
Trust has amended or supplemented this Prospectus to correct such misstatement
or omission and has furnished copies of this Prospectus as so amended or
supplemented to such Participating Broker-Dealer, or the Corporation or the
Issuer Trust has given notice that the sale of New Securities may be resumed,
as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital
Securities will be a new issue of securities for which there currently is no
market. There can be no assurance as to the development or liquidity of any
market for the New Capital Securities. The Corporation and the Issuer Trust
currently do not intend to apply for listing of the New Capital Securities on
any securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System or any other system.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will
be subject to the same limitations applicable thereto under the Amended and
Restated Trust Agreement relating to the Old Issuer Trust, dated as of January
16, 1997 (the "Old Trust Agreement"), as amended and supplemented from time to
time, among the Corporation, as Depositor, Wilmington Trust Company as
Property Trustee and Delaware Trustee, the Administrative Trustees named
therein and the Holders of common and preferred securities of the Old Issuer
Trust from time to time (except for those rights that terminate upon
consummation of the Exchange Offer). Following consummation of the Exchange
Offer, the holders of Old Capital Securities will continue to be subject to
all of the existing restrictions upon transfer thereof and none of the
Corporation, the Issuer Trust or the Old Issuer Trust will have any further
obligation to such holders (other than under certain limited circumstances) to
provide for registration under the Securities Act of the Old Capital
Securities held by them. To the extent that Old Capital Securities are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Old Capital Securities could be adversely affected. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on April 17, 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Corporation and the Issuer Trust (in which case the term
"Expiration Date" will mean the latest date and time to which the Exchange
Offer is extended). Tenders of Old Capital Securities may be withdrawn at any
time on or prior to the Expiration Date. The Exchange Offer is not conditioned
upon any minimum Liquidation Amount of Old Capital Securities being tendered
for exchange. However, the Exchange Offer is subject to certain events and
conditions, which may be waived by the Corporation, and to the terms and
provisions of the Registration Rights Agreement. Old Capital Securities may be
tendered in whole or in any part having a Liquidation Amount of not less than
$100,000 (100 Old Capital Securities) or any integral multiple of $1,000 in
excess thereof. The Corporation has agreed to pay all expenses of the Exchange
Offer, except as otherwise specified herein. See "The Exchange Offer--Fees and
Expenses." Each New Capital Security will pay cumulative Distributions from
the most recent distribution date on the Old Capital Securities surrendered in
exchange for such New Capital Securities or, if no distributions have been
paid on such Old Capital Securities, from January 16, 1997. Holders of the Old
Capital Securities whose Old Capital Securities are accepted for exchange will
not receive accumulated distributions on such Old Capital Securities for any
period from and after the last distribution date on such Old Capital
Securities prior to the original issue date of the New Capital Securities or,
if no such distributions have been paid, will not receive any accumulated
distributions on such Old
5
<PAGE>
(cover page continued)
Capital Securities, and will be deemed to have waived the right to receive any
distributions on such Old Capital Securities accumulated from and after such
distribution date or, if no such interest has been paid or duly provided for,
from and after January 16, 1997. This Prospectus, together with the Letter of
Transmittal, is being sent to all registered holders of Old Capital Securities
as of March 18, 1997.
Neither the Corporation nor the Issuer Trust will receive any proceeds from
the issuance of the New Capital Securities offered hereby. No dealer-manager
is being used in connection with this Exchange Offer. See "Use of Proceeds"
and "Plan of Distribution."
This Prospectus may be used by BT Securities Corporation, a wholly owned
subsidiary of the Corporation, in connection with offers and sales related to
market-making transactions in New Securities effected from time to time after
the commencement of the offering to which this Prospectus relates. BT
Securities Corporation may act as principal or agent in such transactions,
including as agent for the counterparty when acting as principal or as agent
for both counterparties, and may receive compensation in the form of discounts
and commissions, including from both counterparties when it acts as agent for
both. Such sales will be made at prevailing market prices at the time of sale,
at prices related thereto or at negotiated prices.
THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND MAY BE HELD OR TRANSFERRED,
ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. ANY
TRANSFER, SALE OR OTHER DISPOSITION OF NEW CAPITAL SECURITIES IN A BLOCK
HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000, OR RESULTING IN A HOLDER'S
HOLDING NEW CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS
THAN $100,000, SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER,
ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH NEW CAPITAL
SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
DISTRIBUTIONS ON SUCH NEW CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE
DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH NEW CAPITAL SECURITIES.
---------------
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
BANKERS TRUST NEW YORK CORPORATION, 130 LIBERTY STREET, NEW YORK, NEW YORK
10006, TELEPHONE NUMBER (212) 250-2500. IN ORDER TO ENSURE TIMELY DELIVERY OF
THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY APRIL 10, 1997.
---------------
FOR NORTH CAROLINA RESIDENTS ONLY
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 OFFERING CIRCULAR.
---------------
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A
"PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF
ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON
INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THE NEW CAPITAL
SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS
ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR
84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE
NEW CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT EITHER (A) IS NOT A
PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF
OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH
PURCHASE OR HOLDING. SEE "CERTAIN ERISA CONSIDERATIONS."
6
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 7
Incorporation of Certain Documents by Reference........................... 8
Summary................................................................... 9
Risk Factors.............................................................. 15
Bankers Trust New York Corporation........................................ 22
BT Capital Trust B........................................................ 24
Use of Proceeds........................................................... 24
Capitalization............................................................ 25
Accounting Treatment...................................................... 26
The Exchange Offer........................................................ 27
Description of New Securities............................................. 36
Relationship Among the New Capital Securities, the New Junior Subordinated
Debentures, the New Guarantee and the New Expense Agreement.............. 61
Description of Old Securities............................................. 62
Certain Federal Income Tax Consequences................................... 63
Certain ERISA Considerations.............................................. 67
Plan of Distribution...................................................... 69
Validity of New Securities................................................ 70
Experts................................................................... 70
</TABLE>
----------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING CONTAINED HEREIN, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE CORPORATION OR THE ISSUER TRUST. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH
IT RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH 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 NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
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, OR THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE CORPORATION OR THE ISSUER TRUST SINCE THE DATE HEREOF.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with 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., Room 1024, 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 (Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511). Copies of
such material can also be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549. The Commission also maintains a site on the World Wide Web, the
address of which is http://www.sec.gov, that contains reports, proxy
statements and other information regarding issuers, such as
7
<PAGE>
the Corporation, that file electronically with the Commission. In addition,
such materials can be inspected at the office of the New York Stock Exchange,
Inc. and the office of the American Stock Exchange, Inc., on which certain
securities of the Corporation are listed. This Prospectus does not contain all
the information set forth in the registration statement of which this
Prospectus forms a part (the "Registration Statement"), which the Corporation
and the Issuer Trust have filed with the Commission under the Securities Act,
and to which reference is hereby made, certain parts of which are omitted in
accordance with the rules and regulations of the Commission.
No separate financial statements of the Issuer Trust have been included or
incorporated by reference herein. The Corporation and the Issuer Trust do not
consider that such financial statements would be material to holders of the
New Capital Securities because the Issuer Trust is a newly formed special
purpose entity, has no operating history or independent operations and is not
engaged in and does not propose to engage in any activity other than holding
as trust assets the New Junior Subordinated Debentures and issuing the New
Trust Securities and engaging in only those other activities necessary or
incidental thereto. Furthermore, taken together, the Corporation's obligations
under the New Junior Subordinated Debentures, the New Junior Subordinated
Indenture, the New Trust Agreement, the New Expense Agreement and the New
Guarantee (in each case as defined herein), in the aggregate, provide a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the New Capital Securities. See "BT Capital Trust B,"
"Description of New Securities", and "Relationship Among the New Capital
Securities, the New Junior Subordinated Debentures, the New Guarantee and the
New Expense Agreement". In addition, the Corporation does not expect that the
Issuer Trust will be filing reports under the Exchange Act with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation and the Issuer Trust hereby incorporate 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, 1996, filed pursuant to Section 13 of the
Exchange Act; and
(b) The Corporation's Current Reports on Form 8-K (file number 1-5920)
filed on January 23 and March 14, 1997 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 any offering of the securities offered hereby
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 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.
8
<PAGE>
SUMMARY
The following is a summary of certain information contained elsewhere in this
Prospectus and should be read in conjunction with such information. This
summary is subject to, and qualified in its entirety by reference to, the more
detailed information appearing elsewhere in this Prospectus.
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 December 31, 1996, the Corporation had
consolidated total assets of $120.2 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
Investment Banking, Risk Management Services, Trading & Sales, Investment
Management, Client Processing Services, Australia/New Zealand, Asia, Latin
America and Corporate. Among the institutional market segments served are
corporations, banks, other financial institutions, governments and agencies,
retirement plans, not-for-profit organizations, wealthy individuals,
foundations and private companies. 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.
BT CAPITAL TRUST B
The Issuer Trust is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State on February 28, 1997, which will be governed by the New Trust Agreement
(as defined below) among the Corporation, as Depositor, Wilmington Trust
Company, as Property Trustee and as Delaware Trustee, the Administrative
Trustees named therein, and the Holders of the New Trust Securities from time
to time. The Issuer Trust's business and affairs are conducted by its trustees:
initially, Wilmington Trust Company, as Property Trustee, Wilmington Trust
Company, as Delaware Trustee and the Administrative Trustees. The Issuer Trust
exists for the exclusive purposes of (i) issuing and selling the New Trust
Securities, (ii) using the proceeds from the sale of the New Trust Securities
to acquire the New Junior Subordinated Debentures and (iii) engaging in only
those other activities necessary or incidental thereto (such as registering the
transfer of the New Trust Securities). Accordingly, the New Junior Subordinated
Debentures will be the sole assets of the Issuer Trust, and payments under the
New Junior Subordinated Debentures will be the sole source of revenue of the
Issuer Trust.
THE EXCHANGE OFFER
Up to $250,000,000 aggregate Liquidation Amount of New Capital Securities are
being offered in exchange for a like aggregate Liquidation Amount of Old
Capital Securities. Old Capital Securities may be tendered for exchange in
whole or in part in a Liquidation Amount of $100,000 (100 Old Capital
Securities) or any integral multiple of $1,000 in excess thereof, provided that
if any Old Capital Securities are tendered for exchange in part, the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in
excess thereof. The Corporation is making the Exchange Offer in order to
satisfy the obligations of the Corporation and the Old Issuer Trust under the
Registration Rights Agreement, dated as of January 16, 1997, among the
Corporation, BT Capital Trust A, a statutory business trust created under the
laws of Delaware (the "Old Issuer Trust"), and the Initial Purchaser of the Old
Capital Securities, relating to the Old Capital Securities. For a description
of the procedures for tendering Old Capital Securities, see "The Exchange
Offer--Procedures for Tendering Old Capital Securities."
9
<PAGE>
Expiration Date
The Expiration Date of the Exchange Offer will be 5:00 p.m., New York City
time, on April 17, 1997 unless the Exchange Offer is extended by the
Corporation and the Issuer Trust. See "The Exchange Offer--Expiration Date;
Extensions; Amendments."
Conditions to Exchange Offer
The Exchange Offer is subject to certain conditions, which may be waived by
the Corporation and the Issuer Trust in their sole discretion. The Exchange
Offer is not conditioned upon any minimum Liquidation Amount of Old Capital
Securities being tendered. See "The Exchange Offer--Conditions to Exchange
Offer." The Corporation reserves the right in its sole discretion, subject to
applicable law, at any time and from time to time, (i) to delay the acceptance
of the Old Capital Securities for exchange, (ii) to terminate the Exchange
Offer if certain specified conditions have not been satisfied, (iii) to extend
the Expiration Date of the Exchange Offer and retain all Old Capital Securities
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw their tendered Old Capital
Securities, or (iv) to waive any condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange Offer--Expiration Date;
Extensions; Amendments."
Withdrawal Rights
Tenders of Old Capital Securities may be withdrawn at any time on or prior to
the Expiration Date by delivering a written notice of such withdrawal to
Wilmington Trust Company, as Exchange Agent (the "Exchange Agent"), in
conformity with certain procedures set forth under "The Exchange Offer--
Withdrawal Rights."
Procedures for Tendering Old Capital Securities
Tendering holders of Old Capital Securities must complete and sign a Letter
of Transmittal in accordance with the instructions contained therein and
forward the same by mail, facsimile or hand delivery, together with any other
required documents, to the Exchange Agent, either with the Old Capital
Securities to be tendered or in compliance with the specified procedures for
guaranteed delivery of Old Capital Securities. Certain brokers, dealers,
commercial banks, trust companies and other nominees may also effect tenders by
book-entry transfer, including an Agent's Message in lieu of the Letter of
Transmittal. Holders of Old Capital Securities registered in the name of a
broker, dealer, commercial bank, trust company or other nominee are urged to
contact such person promptly if they wish to tender Old Capital Securities
pursuant to the Exchange Offer. See "The Exchange Offer--Procedures for
Tendering Old Capital Securities." Letters of Transmittal and certificates
representing Old Capital Securities should not be sent to the Corporation or
the Issuer Trust. Such documents should only be sent to the Exchange Agent.
Questions regarding how to tender and requests for information should be
directed to the Exchange Agent. See "The Exchange Offer--Exchange Agent."
Resales of New Capital Securities
The Corporation is making the Exchange Offer in reliance on the position of
the staff of the Division of Corporation Finance of the Commission as set forth
in certain interpretive letters addressed to third parties in other
transactions. However, neither the Corporation nor the Issuer Trust has sought
its own interpretive letter and there can be no assurance that the staff of the
Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance, and subject to the two immediately following
sentences, the Corporation believes that New Capital Securities issued pursuant
to the Exchange Offer in exchange for Old Capital Securities may be offered for
resale, resold and otherwise transferred by a holder thereof (other than a
holder who is a broker-dealer) without further compliance with the registration
10
<PAGE>
and prospectus delivery requirements of the Securities Act, provided that such
New Capital Securities are acquired in the ordinary course of such holder's
business and that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution (within the
meaning of the Securities Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an Affiliate or who intends to
participate in the Exchange Offer for the purpose of distributing the New
Capital Securities, or any broker-dealer who purchased the Old Capital
Securities from the Issuer Trust to resell pursuant to Rule 144A or any other
available exemption under the Securities Act, (i) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (ii) will not
be permitted or entitled to tender such Old Capital Securities in the Exchange
Offer, and (iii) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other
transfer of such Old Capital Securities unless such sale is made pursuant to an
exemption from such requirements. In addition, as described below, any
Participating Broker-Dealer must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resales of such New Capital
Securities.
Each holder of Old Capital Securities that wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an Affiliate, (ii) any New Capital Securities to
be received by it are being acquired in the ordinary course of its business,
(iii) it has no arrangement or understanding with any person to participate in
a distribution (within the meaning of the Securities Act) of such New Capital
Securities, and (iv) if such holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such New Capital Securities. The Letter of
Transmittal contains the foregoing restrictions. Each Participating Broker-
Dealer will be deemed to have acknowledged by execution of the Letter of
Transmittal or delivery of an Agent's Message that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters referred to
above, the Corporation and the Issuer Trust believe that Participating Broker-
Dealers may fulfill their prospectus delivery requirements with respect to the
New Capital Securities received upon exchange of such Old Capital Securities
(other than Old Capital Securities which represent an unsold allotment from the
original sale of the Old Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the prospectus prepared for an
exchange offer so long as it contains a description of the plan of distribution
with respect to the resale of such New Capital Securities. Accordingly, this
Prospectus may be used by a Participating Broker-Dealer in connection with
resales of New Capital Securities received in exchange for Old Capital
Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement and to the limitations described below under "The
Exchange Offer--Resales of New Capital Securities," the Corporation and the
Issuer Trust have agreed that this Prospectus may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90 days after the Expiration Date or, if earlier, when all such
New Capital Securities have been disposed of by such Participating Broker-
Dealer. See "Plan of Distribution." Any person, including any Participating
Broker-Dealer, who is an Affiliate may not rely on such interpretive letters
and must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. See "The Exchange
Offer--Resales of New Capital Securities."
Exchange Agent
The Exchange Agent is Wilmington Trust Company. The addresses, and telephone
and facsimile numbers of the Exchange Agent are set forth under "The Exchange
Offer--Exchange Agent" and in the Letter of Transmittal.
11
<PAGE>
DESCRIPTION OF NEW SECURITIES
Securities Offered.......... The Corporation is offering up to $250,000,000
aggregate Liquidation Amount of the Issuer
Trust's 7.90% Capital Securities, Series B1
(Liquidation Amount $1,000 per Capital Security),
which have been registered under the Securities
Act. The terms of the New Capital Securities are
identical in all material respects to the terms
of the Old Capital Securities, except that the
New Capital Securities have been registered under
the Securities Act and therefore are not subject
to certain of the restrictions on transfer
applicable to the Old Capital Securities and will
not provide for any increase in the rate at which
Distributions will accumulate thereon. See "The
Exchange Offer--Purpose and Effect of the
Exchange Offer," "Description of New Securities"
and "Description of Old Securities."
Distribution Dates.......... January 15 and July 15 of each year, commencing
July 15, 1997. Holders of Old Capital Securities
whose Old Capital Securities are accepted for
exchange will not receive accumulated
distributions on such Old Capital Securities for
any period from and after the last distribution
date with respect to such Old Capital Securities
prior to the original issue date of the New
Capital Securities or, if no such distributions
have been made, will not receive any accumulated
distributions on such Old Capital Securities.
Such holders will be deemed to have waived the
right to receive any distributions on such Old
Capital Securities accumulated from and after
such distribution date or, if no such
distributions have been made, from and after
January 16, 1997.
Extension Periods........... Distributions on New Capital Securities may be
deferred for the duration of any Extension Period
selected by the Corporation with respect to the
payment of interest on the New Junior
Subordinated Debentures. No Extension Period will
exceed 10 consecutive semi-annual periods or
extend beyond the Stated Maturity as in effect on
the date on which the Corporation elects to
effect such deferral. See "Description of New
Securities--Description of New Junior
Subordinated Debentures--Option to Extend
Interest Payment Period" and "Certain Federal
Income Tax Consequences--Interest Income and
Original Issue Discount."
Ranking..................... The New Capital Securities will rank pari passu,
and payments thereon will be made pro rata, with
the New Common Securities except as described
under "Description of New Securities--Description
of New Capital Securities--Subordination of New
Common Securities." The New Junior Subordinated
Debentures will be unsecured and subordinate and
junior in right of payment to the extent and in
the manner set forth in the New Junior
Subordinated Indenture to all Senior Indebtedness
of the Corporation. See "Description of New
Securities--Description of New Junior
Subordinated Debentures." The New Guarantee will
constitute an unsecured obligation of the
Corporation and will rank subordinate and junior
in right of payment to all Senior Indebtedness to
the extent and in the manner set forth in the New
Guarantee. See "Description of New Securities--
Description of New Guarantee."
12
<PAGE>
Redemption.................. The New Trust Securities are subject to mandatory
redemption in whole but not in part (i) at the
Stated Maturity upon repayment of the New Junior
Subordinated Debentures, (ii) contemporaneously
with the optional redemption at any time by the
Corporation of the New Junior Subordinated
Debentures upon the occurrence and continuation
of a Tax Event, Investment Company Event or
Capital Treatment Event and (iii) at any time on
or after January 15, 2007, contemporaneously with
the optional redemption by the Corporation of the
New Junior Subordinated Debentures, in each case
at the applicable Redemption Price. See
"Description of New Securities--Description of
New Capital Securities--Redemption."
Rating...................... The New Capital Securities are expected to be
rated "a2" by Moody's Investors Service, Inc. and
BBB+ by Standard & Poor's Ratings Services. A
security rating is not a recommendation to buy,
sell or hold securities and may be subject to
revision or withdrawal at any time by the
assigning rating organization.
Transfer.................... The New Capital Securities will be issued, and
may be held and transferred, only in blocks
having a Liquidation Amount of not less than
$100,000 (100 New Capital Securities). Any
transfer, sale or other disposition of New
Capital Securities in a block having a
Liquidation Amount of less than $100,000, or
resulting in a holder's holding New Capital
Securities in a block having a Liquidation Amount
of less than $100,000, will be deemed to be void
and of no legal effect whatsoever. See
"Description of New Securities--Description of
New Capital Securities--Book-Entry, Delivery and
Form."
ERISA Considerations........ Holders of Old Capital Securities must carefully
consider the restrictions on purchase set forth
under "Certain ERISA Considerations" before
tendering Old Capital Securities in the Exchange
Offer.
Absence of Market for the
Old Capital Securities and The New Capital Securities will be a new issue of
New Capital Securities...... securities for which there currently is no
market. Lehman Brothers Inc., the initial
purchaser of the Old Capital Securities (the
"Initial Purchaser"), informed the Corporation
and the Old Issuer Trust in connection with the
offering of the Old Capital Securities that the
Initial Purchaser intended to make a market in
the Old Capital Securities. However, the Initial
Purchaser is not obligated to make a market in
the Old Capital Securities or the New Capital
Securities, and any market making in the Old
Capital Securities may be discontinued at any
time without notice. Accordingly, there can be no
assurance as to the development or liquidity of
any market for the New Capital Securities. The
Corporation and the Issuer Trust do not intend to
apply for listing the New Capital Securities.
13
<PAGE>
Use of Proceeds............. Neither the Corporation nor the Issuer Trust will
receive any proceeds from the issuance of the New
Capital Securities offered hereby. See "Use of
Proceeds."
For additional information regarding the Exchange Offer and the New Capital
Securities, see "The Exchange Offer," "Description of New Securities,"
"Relationship among the New Capital Securities, the New Junior Subordinated
Debentures, the New Guarantee and the New Expense Agreement," "Description of
Old Capital Securities" and "Certain Federal Income Tax Consequences."
RISK FACTORS
Holders of Old Capital Securities should carefully consider the matters set
forth under "Risk Factors" before tendering Old Capital Securities in the
Exchange Offer.
14
<PAGE>
As used herein, (i) the "New Junior Subordinated Indenture" means the Junior
Subordinated Indenture, dated as of February 5, 1997, as amended and
supplemented from time to time, between the Corporation and Wilmington Trust
Company, as trustee (the "Debenture Trustee"), pursuant to which the New
Junior Subordinated Debentures are issued, (ii) the "New Trust Agreement"
means the Amended and Restated Trust Agreement relating to the Issuer Trust,
dated as of the original issue date of the New Capital Securities, as amended
and supplemented from time to time, among the Corporation, as Depositor,
Wilmington Trust Company, as Property Trustee (the "Property Trustee"),
Wilmington Trust Company, as Delaware Trustee (the "Delaware Trustee") and the
Administrative Trustees named therein (the "Administrative Trustees")
(collectively, the "Issuer Trustees"), and the Holders of the New Trust
Securities from time to time, (iii) the "New Guarantee" means the Guarantee
Agreement, dated as of such date, relating to the New Capital Securities, as
amended and supplemented from time to time, between the Corporation and
Wilmington Trust Company, as Guarantee Trustee (the "Guarantee Trustee"), and
(iv) the "New Expense Agreement" means the Agreement as to Expenses and
Liabilities, dated as of such date, as amended and supplemented from time to
time, between the Corporation and the Issuer Trust.
RISK FACTORS
Holders of the Old Capital Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters before tendering Old Capital Securities in the
Exchange Offer.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE NEW GUARANTEE AND THE NEW JUNIOR
SUBORDINATED DEBENTURES
The obligations of the Corporation under the New Guarantee and under the New
Junior Subordinated Debentures are subordinate and junior in right of payment
to all Senior Indebtedness of the Corporation. Substantially all of the
Corporation's existing indebtedness constitutes Senior Indebtedness. Because
the Corporation is a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary, including
Bankers, upon such subsidiary's dissolution, winding-up, liquidation or
reorganization or otherwise (and thus the ability of holders of the New
Capital Securities to benefit indirectly from such distribution), is subject
to the prior claims of creditors of that subsidiary, except to the extent that
the Corporation may itself be a creditor of that subsidiary and its claims are
recognized. There are various legal limitations on the extent to which certain
of the Corporation's subsidiaries may extend credit, pay dividends or
otherwise supply funds to, or engage in transactions with, the Corporation or
certain of its other subsidiaries. Accordingly, the New Junior Subordinated
Debentures and New Guarantee will be effectively subordinated to all existing
and future liabilities of the Corporation's subsidiaries, and holders of New
Junior Subordinated Debentures and the New Guarantee should look only to the
assets of the Corporation for payments on the New Junior Subordinated
Debentures and the New Guarantee. See "Bankers Trust New York Corporation."
None of the New Junior Subordinated Indenture, the New Guarantee or the New
Trust Agreement places any limitation on the amount of secured or unsecured
debt, including Senior Indebtedness, that may be incurred by the Corporation.
See "Description of New Securities--Description of New Guarantee--Status of
the Guarantee" and "Description of New Securities--Description of New Junior
Subordinated Debentures--Subordination."
The ability of the Issuer Trust to pay amounts due on the New Capital
Securities is solely dependent upon the Corporation's making payments on the
New Junior Subordinated Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Event of Default (as defined in the New Junior Subordinated
Indenture) (a "Debenture Event of Default") has occurred and is continuing
with respect to the New Junior Subordinated Debentures, the Corporation has
the right under the New Junior Subordinated Indenture to defer the payment of
interest on the New Junior Subordinated Debentures at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated Debentures as in effect
on the date on which the Corporation elects to effect such deferral. See
"Description of New Securities--Description of New Junior
15
<PAGE>
Subordinated Debentures--Debenture Events of Default." As a consequence of any
such deferral, semi-annual Distributions on the New Capital Securities by the
Issuer Trust will be deferred (and the amount of Distributions to which
holders of the New Capital Securities are entitled will accumulate additional
Distributions thereon at the rate of 7.90% per annum, compounded semi-annually
from the relevant payment date for such Distributions) during any such
Extension Period. During any such Extension Period, the Corporation may not
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation that rank pari passu in all respects with or
junior in interest to the New Junior Subordinated Debentures (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Corporation in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of any one or more
employees, officers, directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of capital stock of the Corporation (or securities convertible into
or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the
Corporation's capital stock (or any capital stock of a subsidiary of the
Corporation) for any class or series of the Corporation's capital stock or of
any class or series of the Corporation's indebtedness for any class or series
of the Corporation's capital stock, (c) the purchase of fractional interests
in shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise
of such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such stock).
Prior to the termination of any such Extension Period, the Corporation may
further defer the payment of interest, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the New Junior Subordinated Debentures as in effect on the date on which
the Corporation elects to effect such deferral. Upon the termination of any
Extension Period and the payment of all interest then accrued and unpaid
(together with interest thereon at the rate of 7.90% per annum, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period subject to the above conditions. There
is no limitation on the number of times that the Corporation may elect to
begin an Extension Period. See "Description of New Securities--Description of
New Capital Securities--Distributions" and "Description of New Securities--
Description of New Junior Subordinated Debentures--Option to Extend Interest
Payment Period."
Should an Extension Period occur, a holder of New Capital Securities will
continue to accrue income (in the form of original issue discount) in respect
of its pro rata share of the New Junior Subordinated Debentures held by the
Issuer Trust for United States federal income tax purposes. As a result, a
holder of New Capital Securities will include such income in gross income for
United States federal income tax purposes in advance of the receipt of cash,
and will not receive the cash related to such income from the Issuer Trust if
the holder disposes of the New Capital Securities prior to the record date for
the payment of Distributions. See "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount" and "--Sales or Redemptions of
New Capital Securities."
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the New
Junior Subordinated Debentures. However, should the Corporation elect to
exercise such right in the future, the market price of the New Capital
Securities is likely to be affected. A holder that disposes of its New Capital
Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its New Capital
Securities. In addition, as a result of the existence of the Corporation's
right to defer interest payments, the market price of the New Capital
Securities (which represent preferred undivided beneficial interests in the
assets of the Issuer Trust) may be more volatile than the market prices of
other securities on which original issue discount accrues that are not subject
to such deferrals.
16
<PAGE>
TAX EVENT, INVESTMENT COMPANY EVENT OR CAPITAL TREATMENT EVENT--SHORTENING OF
MATURITY OF NEW JUNIOR SUBORDINATED DEBENTURES OR REDEMPTION
Upon the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event (whether occurring before or after
January 15, 2007), the Corporation has the right, if certain conditions are
met, (i) to shorten the maturity of the New Junior Subordinated Debentures to
a date not earlier than January 15, 2017, or (ii) to redeem the New Junior
Subordinated Debentures in whole (but not in part) within 90 days following
the occurrence of such Tax Event, Investment Company Event or Capital
Treatment Event (or, if the approval of the Federal Reserve is then required
for such redemption, on such later date as promptly as reasonably practicable
after such approval is obtained) and thereby cause a mandatory redemption of
the New Capital Securities. The Corporation has committed to the Federal
Reserve that the Corporation will not exercise such right without having
received prior approval of the Federal Reserve to do so, if then required
under applicable Federal Reserve capital guidelines or policies. See
"Description of New Securities--Description of New Junior Subordinated
Debentures--Conditional Right to Shorten Maturity or Redeem Upon a Tax Event,
Investment Company Event or Capital Treatment Event."
"Tax Event" means the receipt by the Issuer Trust or the Corporation of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced proposed change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after January 9, 1997,
there is more than an insubstantial risk that (i) the Issuer Trust is, or will
be within 90 days of the delivery of such opinion, subject to United States
federal income tax with respect to income received or accrued on the New
Junior Subordinated Debentures, (ii) interest payable by the Corporation on
the New Junior Subordinated Debentures is not, or within 90 days of the
delivery of such opinion will not be, deductible by the Corporation, in whole
or in part, for United States federal income tax purposes or (iii) the Issuer
Trust is, or will be within 90 days of the delivery of the opinion, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges (each of the circumstances referred to in clauses (i), (ii) or (iii)
of this sentence being referred to herein as an "Adverse Tax Consequence").
See "--Possible Tax Law Changes Affecting the New Capital Securities" for a
discussion of certain legislative proposals that, if adopted, could give rise
to a Tax Event, which may permit the Corporation to shorten the maturity of
the New Junior Subordinated Debentures to a date not earlier than January 15,
2017 or cause a redemption of the New Capital Securities prior to January 9,
2007.
"Investment Company Event" means the receipt by the Issuer Trust or the
Corporation of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
change (including any announced proposed change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Issuer Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), which change or proposed change becomes
effective or would become effective, as the case may be, on or after
January 9, 1997.
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced proposed change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such
laws, rules or regulations, which amendment or change is effective or which
pronouncement, action or decision is announced on or after January 9, 1997,
there is more than an insubstantial risk that the Corporation will not be
entitled to treat an amount equal to the Liquidation Amount of the New Capital
Securities as "Tier 1 Capital" (or the then equivalent thereof) for purposes
of the capital adequacy guidelines of the Federal Reserve, as then in effect
and applicable to the Corporation.
17
<PAGE>
EXCHANGE OF NEW CAPITAL SECURITIES FOR NEW JUNIOR SUBORDINATED DEBENTURES
The holder of all of the outstanding New Common Securities has the right at
any time to dissolve the Issuer Trust and, after satisfaction of liabilities
to creditors of the Issuer Trust as provided by applicable law, cause the New
Junior Subordinated Debentures to be distributed to the holders of the New
Capital Securities and New Common Securities in liquidation of the Issuer
Trust. The Corporation has committed to the Federal Reserve that, so long as
the Corporation (or any affiliate) is the holder of all the New Common
Securities, the Corporation (or such affiliate) will not exercise such right
without having received the prior approval of the Federal Reserve to do so, if
then required under applicable Federal Reserve capital guidelines or policies.
See "Description of New Securities--Description of New Capital Securities--
Liquidation Distribution Upon Dissolution."
Under current United States federal income tax law and interpretations and
assuming, as expected, that the Issuer Trust will not be taxable as a
corporation, a distribution of the New Junior Subordinated Debentures upon a
liquidation of the Issuer Trust should not be a taxable event to holders of
the New Capital Securities. However, if a Tax Event were to occur that would
cause the Issuer Trust to be subject to United States federal income tax with
respect to income received or accrued on the New Junior Subordinated
Debentures, a distribution of the New Junior Subordinated Debentures by the
Issuer Trust could be a taxable event to the Issuer Trust and the holders of
the New Capital Securities. See "Certain Federal Income Tax Consequences--
Distribution of New Junior Subordinated Debentures to Securityholders."
SHORTENING OF STATED MATURITY OF NEW JUNIOR SUBORDINATED DEBENTURES
Upon the occurrence of a Tax Event, Investment Company Event or a Capital
Treatment Event, the Corporation in certain circumstances will have the right
to shorten the Stated Maturity of the New Junior Subordinated Debentures to a
date not earlier than January 15, 2017 and thereby cause the New Capital
Securities to be redeemed on such earlier date. See "Description of New
Securities--Description of New Junior Subordinated Debentures--Conditional
Right to Shorten Maturity or Redeem Upon a Tax Event, Investment Company Event
or Capital Treatment Event."
MARKET PRICES
There can be no assurance as to the market prices for New Capital
Securities, or for New Junior Subordinated Debentures that may be distributed
in exchange for New Capital Securities if a liquidation of the Issuer Trust
occurs. Accordingly, the New Capital Securities or the New Junior Subordinated
Debentures that a holder of New Capital Securities may receive on liquidation
of the Issuer Trust may trade at a discount to the price that the investor
paid to purchase the New Capital Securities offered hereby. Because holders of
New Capital Securities may receive New Junior Subordinated Debentures on
dissolution of the Issuer Trust, prospective purchasers of New Capital
Securities are also making an investment decision with regard to the New
Junior Subordinated Debentures and should carefully review all the information
regarding the New Junior Subordinated Debentures contained herein. See
"Description of New Securities--Description of New Junior Subordinated
Debentures."
RIGHTS UNDER THE NEW GUARANTEE
Wilmington Trust Company will act as the Guarantee Trustee and will hold the
New Guarantee for the benefit of the holders of the New Capital Securities.
Wilmington Trust Company will also act as Debenture Trustee for the New Junior
Subordinated Debentures and as Property Trustee and as Delaware Trustee under
the New Trust Agreement. The New Guarantee guarantees to the holders of the
New Capital Securities the following payments, to the extent not paid by the
Issuer Trust: (i) any accumulated and unpaid Distributions required to be paid
on the New Capital Securities, to the extent that the Issuer Trust has funds
on hand available therefor at such time, (ii) the Redemption Price with
respect to any New Capital Securities called for redemption, to the
18
<PAGE>
extent that the Issuer Trust has funds on hand available therefor at such
time, and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of the Issuer Trust (unless the New Junior Subordinated Debentures
are distributed to holders of the New Capital Securities), the lesser of (a)
the aggregate of the Liquidation Amount and all accumulated and unpaid
Distributions to the date of payment, to the extent that the Issuer Trust has
funds on hand available therefor at such time, and (b) the amount of assets of
the Issuer Trust remaining available for distribution to holders of the New
Capital Securities on liquidation of the Issuer Trust. The New Guarantee is
subordinate as described under "--Ranking of Subordinated Obligations Under
the New Guarantee and the New Junior Subordinated Debentures." The holders of
not less than a majority in aggregate Liquidation Amount of the outstanding
New Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the New Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the New Guarantee. Any holder of
the New Capital Securities may institute a legal proceeding directly against
the Corporation to enforce its rights under the New Guarantee without first
instituting a legal proceeding against the Issuer Trust, the Guarantee Trustee
or any other person or entity. If the Corporation were to default on its
obligation to pay amounts payable under the New Junior Subordinated
Debentures, the Issuer Trust may lack funds for the payment of Distributions
or amounts payable on redemption of the New Capital Securities or otherwise,
and, in such event, holders of the New Capital Securities would not be able to
rely upon the New Guarantee for payment of such amounts. Instead, if a
Debenture Event of Default has occurred and is continuing and such event is
attributable to the failure of the Corporation to pay any amounts payable in
respect of the New Junior Subordinated Debentures on the payment date on which
such payment is due and payable, then a holder of New Capital Securities may
institute a legal proceeding directly against the Corporation for enforcement
of payment to such holder of any amounts payable in respect of such New Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the New Capital Securities of such holder (a "Direct
Action"). In connection with such Direct Action, the Corporation will have a
right of set-off under the New Junior Subordinated Indenture to the extent of
any payment made by the Corporation to such holder of New Capital Securities
in the Direct Action. Except as described herein, holders of New Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the New Junior Subordinated Debentures or assert directly any
other rights in respect of the New Junior Subordinated Debentures. See
"Description of New Securities--Description of New Junior Subordinated
Debentures--Enforcement of Certain Rights by Holders of New Capital
Securities," and "--Debenture Events of Default" and "Description of New
Securities--Description of New Guarantee." The New Trust Agreement provides
that each holder of New Capital Securities by acceptance thereof agrees to the
provisions of the New Guarantee and the New Junior Subordinated Indenture.
LIMITED VOTING RIGHTS
Holders of New Capital Securities will have limited voting rights relating
generally to the modification of the New Capital Securities and the New
Guarantee and the exercise of the Issuer Trust's rights as holder of New
Junior Subordinated Debentures. Holders of New Capital Securities will not be
entitled to appoint, remove or replace the Property Trustee or the Delaware
Trustee except upon the occurrence of certain events described herein. The
Issuer Trustees and the holder of all the New Common Securities may, subject
to certain conditions, amend the New Trust Agreement without the consent of
holders of New Capital Securities to cure any ambiguity or make other
provisions not inconsistent with other provisions under the New Trust
Agreement or to ensure that the Issuer Trust (i) will not be taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes, or (ii) will not be required to register as an "investment
company" under the Investment Company Act. See "Description of New
Securities--Description of New Capital Securities--Voting Rights; Amendment of
New Trust Agreement" and "--Removal of Issuer Trustees; Appointment of
Successors."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities Act
or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant to
an exemption
19
<PAGE>
therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities that remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities that remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Corporation and the Old Issuer Trust do not intend to
register under the Securities Act any Old Capital Securities that remain
outstanding after consummation of the Exchange Offer (subject to such limited
exceptions, if applicable).
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. To the extent that Old Capital Securities are
tendered and accepted in connection with the Exchange Offer, any trading
market in the Old Capital Securities that remain outstanding after the
Exchange Offer could be adversely affected.
The Old Capital Securities provide that, if the Exchange Offer is not
consummated within 35 days of the date hereof, the Distribution rate borne by
the Old Capital Securities will increase by 0.25% per annum commencing on the
36th day after the date hereof, until the Exchange Offer is consummated. See
"Description of Old Capital Securities." Following consummation of the
Exchange Offer, the Old Capital Securities will not be entitled to any
increase in the Distribution rate thereon. The New Capital Securities will not
be entitled to any such increase in the Distribution rate thereon.
ABSENCE OF PUBLIC MARKET
The Old Capital Securities have not been registered under the Securities Act
and will be subject to restrictions on transferability to the extent that they
are not exchanged for the New Capital Securities. Although the New Capital
Securities will generally be permitted to be resold or otherwise transferred
by the holders (so long as the holders are not Affiliates) without compliance
with the registration requirements under the Securities Act, they will
constitute a new issue of securities with no established trading market. The
Old Capital Securities and the New Capital Securities may be transferred by
the holders thereof only in blocks having a Liquidation Amount of not less
than $100,000 (100 Old Capital Securities or New Capital Securities, as the
case may be). See "Description of New Securities--Description of New Capital
Securities--Book-Entry, Delivery and Form" and "Description of Old
Securities." The Corporation and the Old Issuer Trust were advised by the
Initial Purchaser in connection with the offering of the Old Capital
Securities that the Initial Purchaser intended to make a market in the Old
Capital Securities. However, the Initial Purchaser is not obligated to make a
market in the Old Capital Securities or the New Capital Securities, and any
market-making activity with respect to the Old Capital Securities or the New
Capital Securities may be discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act and may be limited during the Exchange
Offer. Accordingly, no assurance can be given that an active public or other
market will develop for the Old Capital Securities or the New Capital
Securities or as to the liquidity of or the trading market for the Old Capital
Securities or the New Capital Securities. If an active public market does not
develop, the market price and liquidity of the Old Capital Securities or the
New Capital Securities may be adversely affected.
If a public trading market develops for the New Capital Securities, future
trading prices of such securities will depend on many factors, including,
among other things, prevailing interest rates, results of operations and the
market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Corporation, the New Capital Securities may trade at a
discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are Affiliates may publicly offer for sale or
resell the New Capital Securities only in compliance with provisions of Rule
144 under the Securities Act.
20
<PAGE>
Each Participating Broker-Dealer that receives New Capital Securities for
its own account must acknowledge that it will deliver a prospectus in
connection with any resale of such New Capital Securities. See "Plan of
Distribution."
EXCHANGE OFFER PROCEDURES
Delivery of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Exchange Agent of such Old Capital Securities, a properly
completed and duly executed Letter of Transmittal or Agent's Message in lieu
thereof and all other required documents. Therefore, holders of the Old
Capital Securities desiring to tender such Old Capital Securities in exchange
for New Capital Securities should allow sufficient time to ensure timely
delivery. Neither the Corporation, the Issuer Trust, nor the Exchange Agent is
under any duty to give notification of defects or irregularities with respect
to the tenders of Old Capital Securities for exchange.
POSSIBLE TAX LAW CHANGES AFFECTING THE NEW CAPITAL SECURITIES
On February 6, 1997, the revenue portion of President Clinton's 1997 budget
proposal (the "Budget Proposal"), was released. If enacted, the Budget
Proposal would generally deny interest deductions for interest on an
instrument issued by a corporation that has a maximum term of more than 15
years and that is not shown as indebtedness on the separate balance sheet of
the issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. The above described provision of the Budget Proposal is
proposed to be effective generally for instruments issued on or after the date
of first Congressional committee action. If this provision were to apply to
the New Junior Subordinated Debentures, the Corporation would be unable to
deduct interest on the New Junior Subordinated Debentures. Under current law,
the Corporation will be able to deduct interest on the New Junior Subordinated
Debentures. There can be no assurance, however, that current or future
legislative proposals or final legislation will not affect the ability of the
Corporation to deduct interest on the New Junior Subordinated Debentures. Such
a change could give rise to a Tax Event, which may permit the Corporation, if
certain conditions are met, to shorten the maturity of the Junior Subordinated
Debentures to a date not earlier than January 15, 2017 or to cause a
redemption of the New Capital Securities before January 15, 2007. See
"Description of New Securities--Description of New Junior Subordinated
Debentures--Redemption," "Description of New Securities--Description of New
Capital Securities--Redemption" and "Certain Federal Income Tax Consequences--
Possible Tax Law Changes."
21
<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 December 31, 1996, the Corporation had
consolidated total assets of $120.2 billion. The Corporation's principal
banking subsidiary is 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 Investment
Banking, Risk Management Services, Trading & Sales, Investment Management,
Client Processing Services, Australia/New Zealand, Asia, Latin America and
Corporate. Among the institutional market segments served are corporations,
banks, other financial institutions, governments and agencies, retirement
plans, not-for-profit organizations, wealthy individuals, foundations and
private companies. 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 certain of the Corporation's 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 short-term borrowings and accounts payable.
The Corporation's principal executive offices are located at 130 Liberty
Street, New York, New York 10006 and its telephone number is (212) 250-2500.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding Interest on Deposits.................... 1.44 1.71 1.28 1.08 1.21
Including Interest on Deposits.................... 1.28 1.48 1.21 1.06 1.16
</TABLE>
For purposes of computing these consolidated ratios, earnings represent
income 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.
CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding Interest on Deposits.................... 1.41 1.69 1.27 1.05 1.19
Including Interest on Deposits.................... 1.26 1.47 1.20 1.04 1.14
</TABLE>
22
<PAGE>
For purposes of computing these consolidated ratios, earnings represent
income 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.
23
<PAGE>
BT CAPITAL TRUST B
The Issuer Trust is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary
of State on February 28, 1997, which will be governed by the New Trust
Agreement among the Corporation, as Depositor, Wilmington Trust Company, as
Property Trustee and as Delaware Trustee, the Administrative Trustees named
therein, and the Holders of the New Trust Securities from time to time. The
Issuer Trust's business and affairs are conducted by its trustees: initially,
Wilmington Trust Company, as Property Trustee and Delaware Trustee, and the
Administrative Trustees. Two individuals who are employees or officers of or
affiliated with the holder of all the New Common Securities will act as the
Administrative Trustees with respect to the Issuer Trust. The Administrative
Trustees will be selected by the holder of all the New Common Securities. See
"Description of New Securities--Description of New Capital Securities--
Miscellaneous." The Issuer Trust exists for the exclusive purposes of (i)
issuing and selling the New Trust Securities, (ii) holding the New Junior
Subordinated Debentures and (iii) engaging in only those other activities
necessary or incidental thereto (such as registering the transfer of the New
Trust Securities). Accordingly, the New Junior Subordinated Debentures will be
the sole assets of the Issuer Trust, and payments under the New Junior
Subordinated Debentures will be the sole source of revenue of the Issuer
Trust. The Corporation will pay all fees and expenses related to the Exchange
Offer, except as provided in this Prospectus.
All of the New Common Securities will initially be owned by the Corporation.
The New Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the New Capital Securities, except that upon the
occurrence and during the continuation of a Debenture Event of Default arising
as a result of any failure by the Corporation to pay any amounts in respect of
the New Junior Subordinated Debentures when due, the rights of the holders of
the New Common Securities to payment in respect of Distributions and payments
upon liquidation, redemption or otherwise will be subordinated to the rights
of the holders of the New Capital Securities. See "Description of New Capital
Securities--Subordination of New Common Securities." The Corporation will
acquire New Common Securities in an aggregate liquidation amount equal to
approximately 3% of the total capital of the Issuer Trust. The Issuer Trust
has a term of 31 years, but may terminate earlier as provided in the New Trust
Agreement. The principal executive office of the Issuer Trust is 130 Liberty
Street, New York, New York 10006, Attention: Office of the Secretary, and its
telephone number is (212) 250-2500.
USE OF PROCEEDS
Neither the Corporation nor the Issuer Trust will receive any proceeds from
the issuance of the New Capital Securities. In consideration for delivering
the New Capital Securities in exchange for Old Capital Securities as described
in this Prospectus, the Corporation will receive Old Capital Securities in
like Liquidation Amount. The Old Capital Securities surrendered in exchange
for the New Capital Securities and the Old Junior Subordinated Debentures held
by the Old Issuer Trust will be retired and cancelled.
The net proceeds to the Old Issuer Trust from the offering of the Old
Capital Securities was approximately $250 million. All of the proceeds from
the sale of the Old Capital Securities were invested by the Old Issuer Trust
in the Old Junior Subordinated Debentures. The net proceeds to the Corporation
from the sale of the Old Junior Subordinated Debentures have been and will be
used by the Corporation for general corporate purposes, which may include
investments in, or extensions of credit to, the Corporation's subsidiaries and
the repurchase and/or redemption of preferred stock of the Corporation.
Specific allocations of the proceeds to such purposes have not been made,
although management determined 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.
The Corporation is required by the Federal Reserve to maintain certain
levels of capital for bank regulatory purposes. On October 21, 1996, the
Federal Reserve announced that cumulative preferred securities having the
characteristics of the New Capital Securities could be included as Tier 1
Capital for bank holding companies. Such Tier 1 Capital treatment, together
with the Corporation's ability to deduct, for federal income tax purposes
interest payable on the New Junior Subordinated Debentures, will provide the
Corporation with a more cost-effective means of obtaining capital for bank
regulatory purposes than other Tier 1 Capital alternatives currently available
to it.
24
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of December 31, 1996 and as adjusted to
give effect to the offering of the Old Capital Securities and of certain other
capital or preferred securities issued since December 31, 1996. The
capitalization of the Corporation has not been adjusted to give effect to any
other transactions that have occurred since December 31, 1996. The following
data should be read in conjunction with the consolidated financial statements
and notes thereto of the Corporation and its subsidiaries incorporated herein
by reference. See "Incorporation of Certain Documents by Reference." The
issuance of the New Capital Securities in the Exchange Offer will have no
effect on the capitalization of the Corporation.
<TABLE>
<CAPTION>
AT DECEMBER 31, 1996
------------------------
ACTUAL AS ADJUSTED
---------- ------------
($ IN MILLIONS)
<S> <C> <C>
Debt:
Short-term borrowings.............................. $ 42,395 $ 42,395
Long-term debt not included in risk-based capital.. 8,533 8,533
Long-term debt included in risk-based capital...... 2,576 2,576
Mandatorily redeemable capital securities of
subsidiary trusts holding solely junior
subordinated deferrable interest debentures
included in risk-based capital(1)................. 730 1,463
---------- ----------
Total debt....................................... $ 54,234 $ 54,967
Preferred stock of subsidiary(2)..................... 250 250
Stockholders' equity:
Preferred stock.................................... 810 810
Common stock ($1 par value; authorized shares:
300,000,000; issued shares: 83,678,973;
outstanding: 79,243,747).......................... 84 84
Capital surplus.................................... 1,339 1,339
Retained earnings.................................. 3,462 3,462
Common stock in treasury, at cost (4,435,226
shares)........................................... (372) (372)
Other stockholders' equity......................... (89) (89)
---------- ----------
Total stockholders' equity....................... 5,234 5,234
---------- ----------
Total capitalization............................. $ 59,718 $ 60,451
========== ==========
</TABLE>
- --------
(1) This item includes the New Capital Securities issued by the Issuer Trust.
As described herein, the sole assets of the Issuer Trust will be the New
Junior Subordinated Debentures, issued by the Corporation to the Issuer
Trust. The New Junior Subordinated Debentures held by the Issuer Trust
will bear interest at a rate equal to 7.90% per annum, and will mature on
January 15, 2027. The Corporation initially will own all of the New Common
Securities of the Issuer Trust. It is anticipated that the Issuer Trust
will not be subject to the reporting requirements of the Exchange Act. See
"Accounting Treatment".
(2) The four series of subsidiary preferred stock included in this item have
been called for redemption.
25
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Issuer Trust will be treated as a
subsidiary of the Corporation and, accordingly, the accounts of the Issuer
Trust will be included in the consolidated financial statements of the
Corporation. The New Capital Securities will be presented as a separate line
item in the consolidated balance sheets of the Corporation, entitled
"Mandatorily Redeemable Capital Securities of Subsidiary Trusts Holding Solely
Junior Subordinated Deferrable Interest Debentures Included in Risk-Based
Capital" and appropriate disclosures about the New Capital Securities, the New
Guarantee and the New Junior Subordinated Debentures will be included in the
notes to the consolidated financial statements. For financial reporting
purposes, the Corporation will record Distributions payable on the New Capital
Securities as an expense in the consolidated statements of income.
The Corporation has agreed that future financial reports of the Corporation
will: (i) present the capital or preferred securities issued by other issuer
trusts of the Corporation on the Corporation's balance sheet as a separate
line item entitled "Mandatorily Redeemable Capital Securities of Subsidiary
Trusts Holding Solely Junior Subordinated Deferrable Interest Debentures
Included in Risk-Based Capital"; (ii) include in a footnote to the financial
statements disclosure that the sole assets of such trusts are the junior
subordinated debentures held (specifying as to each trust the principal
amount, interest rate and maturity date of junior subordinated debentures
held); and (iii) if Staff Accounting Bulletin 53 treatment is sought, then
include, in an audited footnote to the financial statements, disclosure that
(a) the trusts are wholly owned, (b) the sole assets of the trusts are the
junior subordinated debentures (specifying as to each trust the principal
amount, interest rate and maturity date of the junior subordinated debentures
held), and (c) the obligations of the Corporation under the junior
subordinated debentures, the New Junior Subordinated Indenture or other
relevant indenture, the relevant Declarations of Trust, the relevant
guarantees and the relevant expense agreements, in the aggregate, constitute a
full and unconditional guarantee by the Corporation of the trusts' obligations
under the capital securities issued by each trust. See "Relationship Among the
New Capital Securities, the New Junior Subordinated Debentures, the New
Guarantee and the New Expense Agreement."
26
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Corporation
and the Old Issuer Trust entered into the Registration Rights Agreement with
the Initial Purchaser, pursuant to which the Corporation agreed to file and to
use its reasonable best efforts to cause to be declared effective by the
Commission a registration statement with respect to the exchange of the Old
Capital Securities for capital securities of a trust substantially identical
to the Old Issuer Trust with terms substantially identical to the terms of the
Old Capital Securities. A copy of the Registration Rights Agreement has been
filed as an exhibit to the Registration Statement of which this Prospectus is
a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Corporation and the Old Issuer Trust under the Registration Rights
Agreement. The form and terms of the New Capital Securities are the same as
the form and terms of the Old Capital Securities, except that the New Capital
Securities (i) have been registered under the Securities Act and therefore
will not be subject to certain of the restrictions on transfer applicable to
the Old Capital Securities and (ii) will not provide for any increase in the
Distribution rate thereon. In that regard, the Old Capital Securities provide,
among other things, that, if the Exchange Offer is not consummated within 35
days of the date of this Prospectus, the Distribution rate borne by the Old
Capital Securities commencing on the 36th day following the date of this
Prospectus will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the Distribution rate
thereon or any further registration rights under the Registration Rights
Agreement, except under limited circumstances. See "Risk Factors--Consequences
of a Failure to Exchange Old Capital Securities" and "Description of Old
Securities."
The Exchange Offer is not being made to, nor will the Corporation accept
tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not
be in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Old Issuer Trust or any other person who has
obtained a properly completed bond power from the registered holder, or any
person whose Old Capital Securities are held of record by DTC who desires to
deliver such Old Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer the New Capital Securities will have the
benefit of the New Guarantee, which will be substantially identical to the Old
Guarantee and the Issuer Trust will hold New Junior Subordinated Debentures,
in an aggregate principal amount equal to the aggregate Liquidation Amount of
the New Trust Securities of the Issuer Trust issued pursuant to the Exchange
Offer, which will be substantially identical to the Old Junior Subordinated
Debentures. The New Guarantee and the New Junior Subordinated Debentures have
also been registered under the Securities Act.
TERMS OF EXCHANGE
The Corporation hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $250,000,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures described below. The Corporation
will deliver, promptly after the Expiration Date, an aggregate Liquidation
Amount of up to $250,000,000 of New Capital Securities in exchange for a like
Liquidation Amount of outstanding Old Capital Securities tendered and accepted
in connection with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a Liquidation Amount of not less than
$100,000 or any integral multiple of $1,000 in excess thereof provided that if
any Old Capital Securities are tendered in exchange for part, the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in
excess thereof.
27
<PAGE>
The Exchange Offer is not conditioned upon any minimum Liquidation Amount of
Old Capital Securities being tendered. As of the date of this Prospectus, Old
Capital Securities having an aggregate Liquidation Amount of $250,000,000 are
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities that are
not tendered for or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and be entitled to the benefits of the
Old Trust Agreement, but will not be entitled to any further registration
rights under the Registration Rights Agreement, except under limited
circumstances. See "Risk Factors--Consequences of a Failure to Exchange Old
Capital Securities" and "Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange because
of an invalid tender, the occurrence of certain other events set forth herein
or otherwise, certificates for any such unaccepted Old Capital Securities will
be returned, without expense, to the tendering holder thereof promptly after
the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
The Corporation will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the Exchange Offer. See
"--Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS NOR ANY OFFICER OR EMPLOYEE OF THE
CORPORATION NOR ANY ISSUER TRUSTEE OF THE ISSUER TRUST OR THE OLD ISSUER TRUST
MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES
MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER
AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER
READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH
THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND
REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on April 17,
1997, unless the Exchange Offer is extended by the Corporation (in which case
the term "Expiration Date" will mean the latest date and time to which the
Exchange Offer is extended).
The Corporation expressly reserves the right in its sole discretion, subject
to applicable law, at any time and from time to time, (i) to delay the
acceptance of the Old Capital Securities for exchange, (ii) to terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore
been accepted for exchange) if the Corporation determines, in its sole
discretion, that any of the events or conditions referred to under "--
Conditions to the Exchange Offer" have occurred or exist or have not been
satisfied, (iii) to extend the Expiration Date of the Exchange Offer and
retain all Old Capital Securities tendered pursuant to the Exchange Offer,
subject, however, to the right of holders of Old Capital Securities to
withdraw their tendered Old Capital Securities as described under "--
Withdrawal Rights," and (iv) to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect. If the Exchange Offer is amended
in a manner determined by the Corporation to constitute a material change, or
if the Corporation waives a material condition of the Exchange Offer, the
Corporation will promptly disclose such amendment by means of an amended or
supplemented Prospectus that will be distributed to the registered holders of
the Old Capital Securities, and the Corporation will extend the Exchange Offer
to the extent required by Rule 14e-1 under the Exchange Act.
28
<PAGE>
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and
by a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Corporation may choose to make any public
announcement and subject to applicable law, the Corporation will have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND DELIVERY OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Corporation will exchange, and will deliver to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "--Withdrawal Rights")
promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old Capital
Securities tendered and accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of
Old Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees or (in the
case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal, and (iii) any other documents required by the Letter of
Transmittal.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of Old Capital Securities into the Exchange Agent's account at
DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgement
from the tendering participant, which acknowledgement states that such
participant has received and agrees to be bound by the Letter of Transmittal
and that the Corporation may enforce such Letter of Transmittal against such
participant.
Subject to the terms and conditions of the Exchange Offer, the Corporation
will be deemed to have accepted for exchange, and thereby exchanged, Old
Capital Securities validly tendered and not withdrawn as, if and when the
Issuer Trust gives oral or written notice to the Exchange Agent of the
Corporation's acceptance of such Old Capital Securities for exchange pursuant
to the Exchange Offer. The Exchange Agent will act as agent for the
Corporation for the purpose of receiving tenders of Old Capital Securities,
Letters of Transmittal and related documents, and as agent for tendering
holders for the purpose of receiving Old Capital Securities, Letters of
Transmittal and related documents and transmitting New Capital Securities to
validly tendering holders. Such exchange will be made promptly after the
Expiration Date. If for any reason whatsoever, acceptance for exchange or the
exchange of any Old Capital Securities tendered pursuant to the Exchange Offer
is delayed (whether before or after the Corporation's acceptance for exchange
of Old Capital Securities) or the Corporation extends the Exchange Offer or is
unable to accept for exchange or exchange Old Capital Securities tendered
pursuant to the Exchange Offer, then, without prejudice to the Corporation's
rights set forth herein, the Exchange Agent may, nevertheless, on behalf of
the Corporation and subject to Rule 14e-1(c) under the Exchange Act, retain
tendered Old Capital Securities and such Old Capital Securities may not be
withdrawn except to the extent tendering holders are entitled to withdrawal
rights as described under "--Withdrawal Rights."
Pursuant to the Letter of Transmittal or Agent's Message in lieu thereof, a
holder of Old Capital Securities will warrant and agree in the Letter of
Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Old Capital Securities, that the Corporation will acquire
good, marketable and unencumbered title to the tendered Old Capital
Securities, free and clear of all liens, restrictions, charges and
encumbrances, and the Old Capital Securities tendered for exchange are not
subject to any adverse claims or proxies. The holder
29
<PAGE>
also will warrant and agree that it will, upon request, execute and deliver
any additional documents deemed by the Corporation, the Issuer Trust, the Old
Issuer Trust or the Exchange Agent to be necessary or desirable to complete
the exchange, sale, assignment, and transfer of the Old Capital Securities
tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender
Except as set forth below, in order for Old Capital Securities to be validly
tendered pursuant to the Exchange Offer, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or (in the case of a book-entry tender) an Agent's
Message in lieu of the Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at its address set forth
under "--Exchange Agent," and either (i) tendered Old Capital Securities must
be received by the Exchange Agent, or (ii) such Old Capital Securities must be
tendered pursuant to the procedures for book-entry transfer set forth below
and a book-entry confirmation, including an Agent's Message if the tendering
holder has not delivered a Letter of Transmittal, must be received by the
Exchange Agent, in each case on or prior to the Expiration Date, or (iii) the
guaranteed delivery procedures set forth below must be complied with.
If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in
the appropriate box on the Letter of Transmittal and the untendered
Liquidation Amount must be $100,000 or any integral of $1,000 in excess
thereof. The entire amount of Old Capital Securities delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer
The Exchange Agent will establish an account with respect to the Old Capital
Securities at DTC for purposes of the Exchange Offer within two business days
after the date of this Prospectus. Any financial institution that is a
participant in DTC's book-entry transfer facility system may make a book-entry
delivery of the Old Capital Securities by causing DTC to transfer such Old
Capital Securities into the Exchange Agent's account at DTC in accordance with
DTC's procedures for transfers. However, although delivery of Old Capital
Securities may be effected through book-entry transfer into the Exchange
Agent's account at DTC, the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or an Agent's Message in lieu of the Letter of Transmittal, and any other
required documents, must in any case be delivered to and received by the
Exchange Agent at its address set forth under "--Exchange Agent" on or prior
to the Expiration Date, or the guaranteed delivery procedure set forth below
must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees
Certificates for the Old Capital Securities need not be endorsed and
signature guarantees on the Letter of Transmittal are unnecessary unless (i) a
certificate for the Old Capital Securities is registered in a name other than
that of the person surrendering the certificate or (ii) such registered holder
completes the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" in the Letter of Transmittal. In the case of (i) or
(ii) above, such certificates for Old Capital Securities must be duly endorsed
or accompanied by a properly
30
<PAGE>
executed bond power, with the endorsement or signature on the bond power and
on the Letter of Transmittal guaranteed by a firm or other entity identified
in Rule 17Ad-15 under the Exchange Act as an "eligible guarantor institution,"
including (as such terms are defined therein): (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker
or dealer; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
association that is a participant in a securities transfer association (an
"Eligible Institution"), unless surrendered on behalf of such Eligible
Institution. See Instruction 1 to the Letter of Transmittal.
Guaranteed Delivery
If a holder desires to tender Old Capital Securities pursuant to the
Exchange Offer and the certificates for such Old Capital Securities are not
immediately available or time will not permit all required documents to reach
the Exchange Agent on or before the Expiration Date, or the procedures for
book-entry transfer cannot be completed on a timely basis, such Old Capital
Securities may nevertheless be tendered, provided that all of the following
guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof or Agent's Message in lieu thereof), with any required
signature guarantees and any other documents required by the Letter of
Transmittal, are received by the Exchange Agent within three New York Stock
Exchange, Inc. trading days after the date of execution of such Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a book-
entry confirmation with respect to such Old Capital Securities, and a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof or
Agent's Message in lieu thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal.
Accordingly, the delivery of New Capital Securities might not be made to all
tendering holders at the same time, and will depend upon when Old Capital
Securities, book-entry confirmations with respect to Old Capital Securities
and other required documents are received by the Exchange Agent.
The Corporation's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Corporation upon the terms and
subject to the conditions of the Exchange Offer.
Determination of Validity
All questions as to the form of documents, validity, eligibility (including
time of receipt) and acceptance for exchange of any tendered Old Capital
Securities will be determined by the Corporation,in its sole discretion, whose
determination will be final and binding on all parties. The Corporation
reserves the absolute right, in its sole discretion, to reject any and all
tenders it determines not to be in proper form or the acceptance of which, or
exchange for, may, in the view of counsel to the Corporation, be unlawful. The
Corporation also reserves the absolute right, subject to applicable law, to
waive any of the conditions of the Exchange Offer as set forth under "--
Conditions to the Exchange Offer" or any condition or irregularity in any
tender of Old Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
31
<PAGE>
The Corporation's interpretation of the terms and conditions of the Exchange
Offer (including the Letter of Transmittal and the instructions thereto) will
be final and binding. No tender of Old Capital Securities will be deemed to
have been validly made until all irregularities with respect to such tender
have been cured or waived. Neither the Corporation, the Issuer Trust or the
Exchange Agent, nor any affiliates or assigns of the Corporation, the Issuer
Trust or the Exchange Agent, nor any other person shall be under any duty to
give any notification of any irregularities in tenders or incur any liability
for failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney, or
any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the
Corporation, proper evidence satisfactory to the Corporation, in its sole
discretion, of such person's authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other
nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
The Corporation is making the Exchange Offer for the Old Capital Securities
in reliance on the position of the staff of the Division of Corporation
Finance of the Commission as set forth in certain interpretive letters
addressed to third parties in other transactions. However, neither the
Corporation nor the Issuer Trust sought its own interpretive letter, and there
can be no assurance that the staff of the Division of Corporation Finance of
the Commission would make a similar determination with respect to the Exchange
Offer as it has in such interpretive letters to third parties. Based on these
interpretations by the staff of the Division of Corporation Finance, and
subject to the two immediately following sentences, the Corporation believes
that New Capital Securities issued pursuant to this Exchange Offer in exchange
for Old Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Capital Securities
are acquired in the ordinary course of such holder's business and that such
holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any holder of Old Capital
Securities who is an Affiliate or who intends to participate in the Exchange
Offer for the purpose of distributing New Capital Securities, or any broker-
dealer who purchased Old Capital Securities from the Old Issuer Trust to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act, (i) will not be able to rely on the interpretations of the
staff of the Division of Corporation Finance of the Commission set forth in
the above-mentioned interpretive letters, (ii) will not be permitted or
entitled to tender such Old Capital Securities in the Exchange Offer, and
(iii) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or other transfer of such
Old Capital Securities unless such sale is made pursuant to an exemption from
such requirements. In addition, as described below, Participating Broker-
Dealers must deliver a prospectus meeting the requirements of the Securities
Act in connection with any resales of New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required
to represent that (i) it is not an Affiliate, (ii) any New Capital Securities
to be received by it are being acquired in the ordinary course of its
business, (iii) it has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the Securities Act) of
such New Capital Securities, and (iv) if such holder is not a broker-dealer,
such holder is not engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securities Act) of such New Capital
Securities. The Letter of Transmittal contains the foregoing representations.
In addition, the Corporation may
32
<PAGE>
require such holder, as a condition to such holder's eligibility to
participate in the Exchange Offer, to furnish to the Corporation (or an agent
thereof) in writing information as to the number of "beneficial owners"
(within the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom
such holder holds the Old Capital Securities to be exchanged in the Exchange
Offer. Each Participating Broker-Dealer will be deemed to have acknowledged by
execution of the Letter of Transmittal or delivery of an Agent's Message that
it acquired the Old Capital Securities for its own account as the result of
market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the Corporation believes that
Participating Broker-Dealers may fulfill their prospectus delivery
requirements with respect to the New Capital Securities received upon exchange
of such Old Capital Securities (other than Old Capital Securities that
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale
of such New Capital Securities. Accordingly, this Prospectus may be used by a
Participating Broker-Dealer during the period referred to below in connection
with resales of New Capital Securities received in exchange for Old Capital
Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making
or other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Issuer Trust have
agreed that this Prospectus may be used by a Participating Broker-Dealer in
connection with resales of such New Capital Securities for a period ending 90
days after the Expiration Date or, if earlier, when all such New Capital
Securities have been disposed of by such Participating Broker-Dealer. See
"Plan of Distribution." Any person, including any Participating Broker-Dealer,
who is an Affiliate may not rely on such interpretive letters and must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with any resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of an Agent's Message in
lieu thereof, that, upon receipt of notice from the Corporation or the Issuer
Trust of the occurrence of any event or the discovery of any fact that makes
any statement contained or incorporated by reference in this Prospectus untrue
in any material respect or that causes this Prospectus to omit to state a
material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under which
they were made, not misleading or of the occurrence of certain other events
specified in the Registration Rights Agreement, such Participating Broker-
Dealer will suspend the sale of New Securities pursuant to this Prospectus
until the Corporation or the Issuer Trust has amended or supplemented this
Prospectus to correct such misstatement or omission and has furnished copies
of this Prospectus, as so amended or supplemented, to such Participating
Broker-Dealer, or the Corporation or the Issuer Trust has given notice that
the sale of the New Securities may be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at its address set forth under "--Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn,
the aggregate principal amount of Old Capital Securities to be withdrawn, and
(if certificates for such Old Capital Securities have been tendered) the name
of the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such
Old Capital Securities, the tendering holder must submit the certificate
numbers shown on the particular Old Capital Securities to be
33
<PAGE>
withdrawn and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution, except in the case of Old Capital Securities tendered
for the account of an Eligible Institution. If Old Capital Securities have
been tendered pursuant to the procedures for book-entry transfer set forth in
"--Procedures for Tendering Old Capital Securities," the notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawal of Old Capital Securities, in which case a notice of withdrawal
will be effective if delivered to the Exchange Agent by written, telegraphic,
telex or facsimile transmission. Withdrawals of tenders of Old Capital
Securities may not be rescinded. Old Capital Securities properly withdrawn
will not be deemed validly tendered for purposes of the Exchange Offer, but
may be retendered at any subsequent time on or prior to the Expiration Date by
following any of the procedures described above under "--Procedures for
Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Corporation, in
its sole discretion, whose determination shall be final and binding on all
parties. Neither the Corporation, the Issuer Trust or the Exchange Agent, any
affiliates or assigns of the Corporation, the Issuer Trust or the Exchange
Agent, nor any other person shall be under any duty to give any notification
of any irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification. Any Old Capital Securities that have
been tendered but which are withdrawn will be returned to the holder thereof
promptly after withdrawal.
DISTRIBUTIONS ON THE NEW CAPITAL SECURITIES AND OLD CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated distributions on such Old Capital
Securities for any period from and after the last distribution date with
respect to such Old Capital Securities prior to the original issue date of the
New Capital Securities or, if no such distributions have been made, will not
receive any accumulated distributions on such Old Capital Securities, and will
be deemed to have waived the right to receive any distributions on such Old
Capital Securities accumulated from and after such distribution date or, if no
such distributions have been made, from and after January 16, 1997.
CONDITIONS TO EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, the Corporation will not be required to accept for
exchange, or to exchange, any Old Capital Securities for any New Capital
Securities, and, as described below, may terminate the Exchange Offer (whether
or not any Old Capital Securities have theretofore been accepted for exchange)
or may waive any conditions to or amend the Exchange Offer, if any of the
following conditions has occurred or exists or has not been satisfied:
(a) there occurs a change in the existing interpretations by the staff of
the Commission that permit the New Capital Securities issued pursuant to
the Exchange Offer in exchange for Old Capital Securities to be offered for
resale, resold and otherwise transferred by holders thereof (other than
holders that are broker-dealers or Affiliates) without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that such New Capital Securities are acquired in the ordinary
course of such holders' business and such holders have no arrangement or
understanding with any person to participate in the distributions of such
New Capital Securities;
(b) any action or proceeding has been instituted or threatened in any
court or by or before any governmental agency or body with respect to the
Exchange Offer which, in the Corporation's judgment, would reasonably be
expected to impair the ability of the Corporation to proceed with the
Exchange Offer;
(c) any law, statute, rule or regulation has been adopted or enacted
which, in the Corporation's judgment, would reasonably be expected to
impair the ability of the Corporation to proceed with the Exchange Offer;
34
<PAGE>
(d) a banking moratorium has been declared by United States federal or
New York State authorities which, in the Corporation's judgment, would
reasonably be expected to impair the ability of the Corporation to proceed
with the Exchange Offer;
(e) trading on the New York Stock Exchange, Inc. or generally in the
United States over-the-counter market has been suspended by order of the
Commission or any other governmental authority which, in the Corporation's
judgment, would reasonably be expected to impair the ability of the
Corporation to proceed with the Exchange Offer;
(f) a stop order has been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings have been initiated or, to the knowledge of the
Corporation, threatened for that purpose any governmental approval has not
been obtained, which approval the Corporation, in its sole discretion, deem
necessary for the consummation of the Exchange Offer as contemplated
hereby;
(g) any change, or any development involving a prospective change, in the
business or financial affairs of the Issuer Trust or the Corporation or any
of the Corporation's subsidiaries has occurred which, in the judgment of
the Corporation might materially impair the ability of the Corporation to
proceed with the Exchange Offer; or
(h) the Corporation or the Issuer Trust has received an opinion of
counsel experienced in such matters to the effect that, as a result of the
consummation of the Exchange Offer, there is more than an insubstantial
risk that (a) the Issuer Trust would be subject to United States federal
income tax with respect to income received or accrued on the New Junior
Subordinated Debentures, (b) interest payable by the Corporation on the New
Junior Subordinated Debentures would not be deductible by the Corporation,
in whole or in part, for United States federal income tax purposes, or (c)
the Issuer Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
If the Corporation determines in its sole discretion that any of the
foregoing events or conditions has occurred or exists or has not been
satisfied, the Corporation may, subject to applicable law, terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore
been accepted for exchange) or may waive any such condition or otherwise amend
the terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, the Corporation will
promptly disclose such waiver by means of an amended or supplemented
Prospectus that will be distributed to the registered holders of the Old
Capital Securities, and the Corporation will extend the Exchange Offer to the
extent required by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
Wilmington Trust Company has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed
to the Exchange Agent as follows:
By Mail/Overnight Delivery: By Hand:
Wilmington Trust Company Wilmington Trust Company
1100 North Market Square 1100 North Market Street, 1st
Wilmington, Delaware 19890-0001 Floor
Wilmington, Delaware 19890
Attention: Jill Rylee Attention: Corporate Trust
Operations
Telephone: (302) 651-8869
Facsimile: (302) 651-1079
Delivery to any place other than the above address or facsimile number will
not constitute a valid delivery.
35
<PAGE>
FEES AND EXPENSES
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable out-
of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this
Prospectus and related documents to the beneficial owners of Old Capital
Securities, and in handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old Capital Securities in connection with the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering holder.
Neither the Corporation nor the Issuer Trust will make any payment to
brokers, dealers or others soliciting acceptances of the Exchange Offer.
DESCRIPTION OF NEW SECURITIES
DESCRIPTION OF NEW CAPITAL SECURITIES
Pursuant to the terms of the New Trust Agreement, the Issuer Trustees on
behalf of the Issuer Trust will issue the New Capital Securities and the New
Common Securities. The New Capital Securities will represent preferred
undivided beneficial interests in the assets of the Issuer Trust and the
holders thereof will be entitled to a preference in certain circumstances over
the New Common Securities with respect to Distributions and amounts payable on
redemption or liquidation. See "--Subordination of New Common Securities." The
New Trust Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Wilmington
Trust Company, as Property Trustee, will act as trustee for the purposes of
compliance with the Trust Indenture Act. This summary of certain provisions of
the New Capital Securities and the New Trust Agreement does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
the provisions of the New Trust Agreement, including the definitions therein
of certain terms. Wherever particular defined terms of the New Trust Agreement
are referred to herein, such defined terms are incorporated herein by
reference. A copy of the form of the New Trust Agreement is available upon
request from the Property Trustee.
General
The New Capital Securities will be limited to $250,000,000 aggregate
Liquidation Amount outstanding. The New Capital Securities will rank pari
passu, and payments will be made thereon pro rata, with the New Common
Securities except as described under "--Subordination of New Common
Securities." Legal title to the New Junior Subordinated Debentures will be
held by the Property Trustee in trust for the benefit of the holders of the
New Capital Securities and New Common Securities. The New Guarantee will be a
guarantee on a subordinated basis with respect to the New Capital Securities
but will not guarantee payment of Distributions or amounts payable on
redemption or liquidation of such New Capital Securities when the Issuer Trust
does not have funds on hand available to make such payments. See "--
Description of New Guarantee."
Distributions
The New Capital Securities represent preferred undivided beneficial
interests in the assets of the Issuer Trust, and Distributions on each New
Capital Security will be payable at the annual rate of 7.90% of the stated
liquidation amount (the "Liquidation Amount") of $1,000, payable semi-annually
in arrears on January 15 and July 15 of each year (each a "Distribution
Date"), commencing on the first such date following the date of original
issuance of the New Capital Securities. Such Distributions will be paid to the
holders of the New Capital
36
<PAGE>
Securities at the close of business on the fifteenth day (whether or not a
Business Day (as defined below)) next preceding the relevant Distribution
Date. Distributions on the New Capital Securities will be cumulative.
Distributions will accumulate from the most recent distribution date of the
Old Capital Securities surrendered in exchange for such New Capital Securities
or, if no distributions have been paid on such Old Capital Securities, from
January 16, 1997. The amount of Distributions payable for any period less than
a full Distribution period will be computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in such
period. Distributions payable for each full Distribution period will be
computed by dividing the rate per annum by two. If any date on which
Distributions are payable on the New Capital Securities is not a Business Day,
then payment of the Distributions payable on such date will be made on the
next succeeding day that is a Business Day (without any additional
Distributions or other payment in respect of any such delay), with the same
force and effect as if made on the date such payment was originally payable.
So long as no Debenture Event of Default has occurred and is continuing, the
Corporation has the right under the New Junior Subordinated Indenture to defer
the payment of interest on the New Junior Subordinated Debentures at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension
Period may extend beyond the Stated Maturity of the New Junior Subordinated
Debentures as in effect on the date on which the Corporation elects to effect
such deferral. As a consequence of any such election, semi-annual
Distributions on the New Capital Securities will be deferred by the Issuer
Trust during any such Extension Period. Distributions to which holders of the
New Capital Securities are entitled will accumulate additional Distributions
thereon at the rate per annum of 7.90% thereof, compounded semi-annually from
the relevant payment date for such Distributions, computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period. Additional Distributions payable for each full
Distribution period will be computed by dividing the rate per annum by two.
The term "Distributions" as used herein shall include any such additional
Distributions. During any such Extension Period, the Corporation may not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Corporation's
capital stock or (ii) make any payment of principal of or interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the
Corporation that rank pari passu in all respects with or junior in interest to
the New Junior Subordinated Debentures (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the
Corporation in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of
capital stock of the Corporation (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the
Corporation's capital stock (or any capital stock of a subsidiary of the
Corporation) for any class or series of the Corporation's capital stock or of
any class or series of the Corporation's indebtedness for any class or series
of the Corporation's capital stock, (c) the purchase of fractional interests
in shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise
of such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such stock).
Prior to the termination of any such Extension Period, the Corporation may
further defer the payment of interest, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the New Junior Subordinated Debentures as in effect on the date on which
the Corporation elects to effect such deferral. Upon the termination of any
such Extension Period and the payment of all amounts then due, the Corporation
may elect to begin a new Extension Period. There is no limitation on the
number of times that the Corporation may elect to begin an Extension Period.
See "--Description of New Junior Subordinated Debentures--Option to Extend
Interest Payment Period" and "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount."
37
<PAGE>
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the New
Junior Subordinated Debentures.
The revenue of the Issuer Trust available for distribution to holders of the
New Capital Securities will be limited to payments under the New Junior
Subordinated Debentures held by the Issuer Trust. See "--Description of New
Junior Subordinated Debentures." If the Corporation does not make payments on
the New Junior Subordinated Debentures, the Issuer Trust will not have funds
available to pay Distributions or other amounts payable on the New Capital
Securities. The payment of Distributions and other amounts payable on the New
Capital Securities (if and to the extent the Issuer Trust has funds legally
available therefor) is guaranteed by the Corporation on a limited basis as set
forth herein under "--Description of New Guarantee."
Redemption
Upon the repayment or redemption, in whole or in part, of the New Junior
Subordinated Debentures, whether at maturity or upon earlier redemption as
provided in the New Junior Subordinated Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount of the New Trust Securities, upon not less than 30 nor more than
60 days' notice, at a redemption price (the "Redemption Price") determined as
set forth below. If less than all of the New Junior Subordinated Debentures
are to be repaid or redeemed on a Redemption Date (as defined below), then the
proceeds from such repayment or redemption shall be allocated to the
redemption pro rata of the New Capital Securities and the New Common
Securities. The amount of premium, if any, paid by the Corporation upon the
redemption of all or any part of the New Junior Subordinated Debentures to be
repaid or redeemed on any date will be allocated to the redemption pro rata of
the New Capital Securities and the New Common Securities.
The Corporation has the right to redeem the New Junior Subordinated
Debentures (i) on or after January 15, 2007, in whole at any time or in part
from time to time, or (ii) in certain circumstances as described under "--
Description of New Junior Subordinated Debentures--Conditional Right to
Shorten Maturity or Redeem Upon a Tax Event, Investment Company Event or
Capital Treatment Event," in whole (but not in part) at any time within 90
days following the occurrence and during the continuation of a Tax Event,
Investment Company Event or Capital Treatment Event (or, if the approval of
the Federal Reserve is then required for such redemption, on such later date
as promptly as reasonably practicable after such approval is obtained). A
redemption of the New Junior Subordinated Debentures would cause a mandatory
redemption of a Like Amount of the New Capital Securities and New Common
Securities.
The Redemption Price, in the case of a redemption under (i) above, will
equal the following prices, expressed as percentages of the Liquidation Amount
of such New Capital Securities, together with accumulated and unpaid
Distributions thereon to but excluding the date fixed for redemption (the
"Redemption Date"), if redeemed during the 12-month period beginning January
15:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2007........................................................... 103.4120%
2008........................................................... 103.0708
2009........................................................... 102.7296
2010........................................................... 102.3884
2011........................................................... 102.0472
2012........................................................... 101.7060
2013........................................................... 101.3648
2014........................................................... 101.0236
2015........................................................... 100.6824
2016........................................................... 100.3412
</TABLE>
and at 100% on or after January 15, 2017.
38
<PAGE>
The Redemption Price, in the case of a redemption following a Tax Event,
Investment Company Event or Capital Treatment Event as described under (ii)
above, will be equal to the aggregate Liquidation Amount of New Capital
Securities so redeemed, together with accumulated and unpaid Distributions
thereon to but excluding the Redemption Date.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day on
which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.
"Like Amount" means (i) with respect to a redemption of New Trust
Securities, New Trust Securities having a Liquidation Amount equal to that
portion of the principal amount of New Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the New Junior Subordinated
Indenture, and (ii) with respect to a distribution of New Junior Subordinated
Debentures to holders of New Trust Securities in connection with a dissolution
or liquidation of the Issuer Trust, New Junior Subordinated Debentures having
a principal amount equal to the Liquidation Amount of the New Trust Securities
of the holder to whom such New Junior Subordinated Debentures are distributed.
"Tax Event" means the receipt by the Issuer Trust or the Corporation of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced proposed change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after January 9, 1997,
there is more than an insubstantial risk that (i) the Issuer Trust is, or will
be within 90 days of the delivery of such opinion, subject to United States
federal income tax with respect to income received or accrued on the New
Junior Subordinated Debentures, (ii) interest payable by the Corporation on
the New Junior Subordinated Debentures is not, or within 90 days of the
delivery of such opinion, will not be, deductible by the Corporation, in whole
or in part, for United States federal income tax purposes or (iii) the Issuer
Trust is, or will be within 90 days of the delivery of such opinion, subject
to more than a de minimis amount of other taxes, duties or other governmental
charges (each of the circumstances referred to in clauses (i), (ii) or (iii)
of this sentence being referred to herein as an "Adverse Tax Consequence").
See "--Description of New Junior Subordinated Debentures--Conditional Right to
Shorten Maturity or Redeem Upon a Tax Event, Investment Company Event or
Capital Treatment Event."
"Investment Company Event" means the receipt by the Issuer Trust or the
Corporation of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
change (including any announced proposed change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Issuer Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act, which change or
proposed change becomes effective or would become effective, as the case may
be, on or after January 9, 1997.
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced proposed change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such
laws, rules or regulations, which amendment or change is effective or which
pronouncement, action or decision is announced on or after January 9, 1997,
there is more than an insubstantial risk that the Corporation will not be
entitled to treat an amount equal to the Liquidation Amount of the New Capital
Securities as "Tier 1 Capital" (or the then equivalent thereof) for purposes
of the capital adequacy guidelines of the Federal Reserve, as then in effect
and applicable to the Corporation.
39
<PAGE>
Payment of Additional Sums
If a Tax Event described in clause (i) or (iii) of the definition of Tax
Event above has occurred and is continuing and the Issuer Trust is the holder
of all of the New Junior Subordinated Debentures, the Corporation will pay
Additional Sums (as defined below), if any, on the New Junior Subordinated
Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Issuer Trust on
the outstanding New Capital Securities and New Common Securities of the Issuer
Trust will not be reduced as a result of any additional taxes, duties and
other governmental charges to which the Issuer Trust has become subject as a
result of a Tax Event.
Redemption Procedures
New Capital Securities redeemed on each Redemption Date will be redeemed at
the applicable Redemption Price with the applicable proceeds from the
contemporaneous redemption of the New Junior Subordinated Debentures.
Redemptions of the New Capital Securities will be made and the Redemption
Price will be payable on each Redemption Date only to the extent that the
Issuer Trust has funds on hand available for the payment of such Redemption
Price. See also "--Subordination of New Common Securities."
If the Issuer Trust gives a notice of redemption in respect of the New
Capital Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are available, in the case of New Capital Securities
held in book-entry form, the Property Trustee will deposit irrevocably with
DTC funds sufficient to pay the applicable Redemption Price and will give DTC
irrevocable instructions and authority to pay the Redemption Price to the
holders of the New Capital Securities. With respect to New Capital Securities
not held in book-entry form, the Property Trustee, to the extent funds are
available, will irrevocably deposit with the paying agent for the New Capital
Securities funds sufficient to pay the applicable Redemption Price and will
give such paying agent irrevocable instructions and authority to pay the
Redemption Price to the holders thereof upon surrender of their certificates
evidencing the New Capital Securities. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any New Capital
Securities called for redemption will be payable to the holders of the New
Capital Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption has been given and funds deposited as required,
then upon the date of such deposit, all rights of the holders of such New
Capital Securities so called for redemption will cease, except the right of
the holders of such New Capital Securities to receive the Redemption Price,
but without interest on such Redemption Price, and such New Capital Securities
will cease to be outstanding. If any date fixed for redemption of New Capital
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day which is a Business Day
(without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will
be made on the immediately preceding Business Day. If payment of the
Redemption Price in respect of New Capital Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer Trust or by
the Corporation pursuant to the New Guarantee as described under "--
Description of New Guarantee," Distributions on such New Capital Securities
will continue to accumulate at a rate of 7.90% per annum from the Redemption
Date originally established by the Issuer Trust for such New Capital
Securities to the date such Redemption Price is actually paid, in which case
the actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities laws), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding New Capital Securities by tender,
in the open market or by private agreement, and may resell such securities.
If less than all of the New Capital Securities and New Common Securities are
to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of
such New Capital Securities and New Common Securities to be redeemed will be
allocated pro rata to the New Capital Securities and the New Common Securities
based upon the relative Liquidation Amounts of such classes. The particular
New Capital Securities to be redeemed will be selected on a pro rata basis not
more than 60 days prior to the Redemption Date by the
40
<PAGE>
Property Trustee from the outstanding New Capital Securities not previously
called for redemption, or if the New Capital Securities are then held in the
form of a Global New Capital Security (as defined below), in accordance with
DTC's customary procedures, provided, in each case, that each holder of any
New Capital Securities has at least 100 New Capital Securities remaining after
the redemption. The Property Trustee will promptly notify the securities
registrar for the New Trust Securities in writing of the New Capital
Securities selected for redemption and, in the case of any New Capital
Securities selected for partial redemption, the Liquidation Amount thereof to
be redeemed. For all purposes of the New Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of New Capital
Securities shall relate, in the case of any New Capital Securities redeemed or
to be redeemed only in part, to the portion of the aggregate Liquidation
Amount of New Capital Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each registered holder of New Capital
Securities to be redeemed at its address appearing on the securities register
for the New Trust Securities. Unless the Corporation defaults in payment of
the Redemption Price on the New Junior Subordinated Debentures, on and after
the Redemption Date interest will cease to accrue on the New Junior
Subordinated Debentures or portions thereof (and, unless payment of the
Redemption Price in respect of the New Capital Securities is withheld or
refused and not paid either by the Issuer Trust or the Corporation pursuant to
the New Guarantee, Distributions will cease to accumulate on the New Capital
Securities or portions thereof) called for redemption.
Subordination of New Common Securities
Payment of Distributions on, and the Redemption Price of, the New Capital
Securities and New Common Securities, as applicable, shall be made pro rata
based on the Liquidation Amount of such New Capital Securities and New Common
Securities. However, if on any Distribution Date or Redemption Date a
Debenture Event of Default has occurred and is continuing as a result of any
failure by the Corporation to pay any amounts in respect of the New Junior
Subordinated Debentures when due, no payment of any Distribution on, or
Redemption Price of, any of the New Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of such New Common
Securities, will be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding New Capital Securities for all
Distribution periods terminating on or prior thereto, or in the case of
payment of the Redemption Price the full amount of such Redemption Price on
all of the outstanding New Capital Securities then called for redemption, has
been made or provided for, and all funds available to the Property Trustee
will first be applied to the payment in full in cash of all Distributions on,
or Redemption Price of, the New Capital Securities then due and payable.
In the case of any Event of Default (as defined below) with respect to the
New Capital Securities resulting from a Debenture Event of Default, the holder
of all the New Common Securities will be deemed to have waived any right to
act with respect to any such Event of Default under the New Trust Agreement
until the effect of all such Events of Default have been cured, waived or
otherwise eliminated. See "--Events of Default; Notice" and "--Description of
New Junior Subordinated Debentures--Debenture Events of Default." Until all
such Events of Default under the New Trust Agreement with respect to the New
Capital Securities have been so cured, waived or otherwise eliminated, the
Property Trustee will act solely on behalf of the holders of the New Capital
Securities and not on behalf of the holder of all the New Common Securities,
and only the holders of the New Capital Securities will have the right to
direct the Property Trustee to act on their behalf.
Liquidation Distribution Upon Dissolution
The amount payable on the New Capital Securities in the event of any
liquidation of the Issuer Trust is $1,000 per New Capital Security plus
accumulated and unpaid Distributions, subject to certain exceptions, which may
be in the form of a distribution of such amount in New Junior Subordinated
Debentures.
The holder of all the New Common Securities has the right at any time to
dissolve the Issuer Trust and, after satisfaction of liabilities to creditors
of the Issuer Trust as provided by applicable law, cause the New Junior
Subordinated Debentures to be distributed to the holders of the New Capital
Securities and New Common
41
<PAGE>
Securities in liquidation of the Issuer Trust. The Corporation has committed
to the Federal Reserve that, so long as the Corporation (or an affiliate) is
the holder of all the New Common Securities, the Corporation (or such
affiliate) will not exercise such right without having received the prior
approval of the Federal Reserve to do so, if then required under applicable
Federal Reserve capital guidelines or policies.
Pursuant to the New Trust Agreement, the Issuer Trust will automatically
dissolve, and its affairs will be wound up, upon expiration of its term or, if
earlier, will dissolve, and its affairs will be wound up, on the first to
occur of: (i) certain events of bankruptcy, dissolution or liquidation of the
holder of all the New Common Securities; (ii) the distribution of a Like
Amount of the New Junior Subordinated Debentures to the holders of the New
Trust Securities, if the holder of all the New Common Securities has given
written direction to the Property Trustee to dissolve the Issuer Trust (which
direction, subject to the foregoing restrictions, is optional and wholly
within the discretion of the holder of all the New Common Securities); (iii)
redemption of all of the New Trust Securities as described under "--
Redemption;" and (iv) the entry of an order for the dissolution of the Issuer
Trust by a court of competent jurisdiction.
If dissolution of the Issuer Trust occurs as described in clause (i), (ii)
or (iv) above, the Issuer Trust will be liquidated by the Property Trustee as
expeditiously as the Property Trustee determines to be possible by
distributing, after satisfaction of liabilities to creditors of the Issuer
Trust as provided by applicable law, to the holders of the New Trust
Securities a Like Amount of the New Junior Subordinated Debentures, unless
such distribution is determined by the Property Trustee not to be practical,
in which event such holders will be entitled to receive out of the assets of
the Issuer Trust available for distribution to holders, after satisfaction of
liabilities to creditors of the Issuer Trust as provided by applicable law, an
amount equal to the aggregate of the Liquidation Amount plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Issuer Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Issuer Trust on the New Trust Securities will be paid on a pro rata
basis. The holder of all the New Common Securities will be entitled to receive
distributions upon any such liquidation pro rata with the holders of the New
Capital Securities, except that if a Debenture Event of Default has occurred
and is continuing as a result of any failure by the Corporation to pay any
amounts in respect of the New Junior Subordinated Debentures when due, the New
Capital Securities shall have a priority over the New Common Securities.
After the liquidation date fixed for any distribution of New Junior
Subordinated Debentures (i) the New Capital Securities will no longer be
deemed to be outstanding, (ii) DTC or its nominee, as the registered holder of
the New Capital Securities, will receive a registered global certificate or
certificates representing the New Junior Subordinated Debentures to be
delivered upon such distribution with respect to New Capital Securities held
by DTC or its nominee and (iii) any certificates representing the New Capital
Securities not held by DTC or its nominee will be deemed to represent the New
Junior Subordinated Debentures having a principal amount equal to the stated
Liquidation Amount of such New Capital Securities and bearing accrued and
unpaid interest in an amount equal to the accumulated and unpaid Distributions
on such New Capital Securities until such certificates are presented to the
security registrar for the New Trust Securities for transfer or reissuance.
If the Corporation does not redeem the New Junior Subordinated Debentures
prior to maturity and the Issuer Trust is not liquidated and the New Junior
Subordinated Debentures are not distributed to holders of the New Capital
Securities, the New Capital Securities will remain outstanding until the
repayment of the New Junior Subordinated Debentures and the distribution of
the Liquidation Distribution to the holders of the New Capital Securities.
There can be no assurance as to the market prices for the Capital Securities
or the New Junior Subordinated Debentures that may be distributed in exchange
for New Capital Securities if a termination and liquidation of the Issuer
Trust were to occur. Accordingly, the New Capital Securities that an investor
may purchase, or the New Junior Subordinated Debentures that the investor may
receive on dissolution and liquidation of the Issuer Trust, may trade at a
discount to the price that the investor paid to purchase the New Capital
Securities offered hereby.
42
<PAGE>
If the Corporation elects to dissolve the Issuer Trust and thereby cause the
New Junior Subordinated Debentures to be distributed to holders of the New
Capital Securities in exchange therefor upon liquidation of the Issuer Trust,
the Corporation will continue to have the right to shorten the maturity of or
to redeem the New Junior Subordinated Debentures in certain circumstances upon
the occurrence of a Tax Event or Capital Treatment Event, as described under
"--Description of New Junior Subordinated Debentures--Conditional Right to
Shorten Maturity or Redeem Upon a Tax Event, Investment Company Event or
Capital Treatment Event."
Events of Default; Notice
Any one of the following events constitutes an "Event of Default" under the
New Trust Agreement (an "Event of Default") with respect to the New Capital
Securities (whatever the reason for such Event of Default and whether it is
voluntary or involuntary or is effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "--Description of
New Junior Subordinated Debentures--Debenture Events of Default"); or
(ii) default by the Issuer Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period
of 30 days; or
(iii) default by the Issuer Trust in the payment of any Redemption Price
of any New Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in the New Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Issuer Trustees and the Corporation by the holders of at least
25% in aggregate Liquidation Amount of the outstanding New Capital
Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" under the New Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee if a successor Property Trustee has not
been appointed within 90 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of New Trust Securities, the
Administrative Trustees and the Corporation, unless such Event of Default has
been cured or waived. The Corporation, as Depositor, and the Administrative
Trustees are required to file annually with the Property Trustee a certificate
as to whether or not they are in compliance with all the conditions and
covenants applicable to them under the New Trust Agreement.
If a Debenture Event of Default has occurred and is continuing as a result
of any failure by the Corporation to pay any amounts in respect of the New
Junior Subordinated Debentures when due, the New Capital Securities will have
a preference over the New Common Securities with respect to payments of any
amounts in respect of the New Capital Securities as described above. See "--
Subordination of New Common Securities," "--Liquidation Distribution Upon
Termination" and "--Description of New Junior Subordinated Debentures--
Debenture Events of Default."
The existence of an Event of Default does not entitle the holders of New
Capital Securities to accelerate the maturity thereof.
43
<PAGE>
Removal of Issuer Trustees; Appointment of Successors
Unless a Debenture Event of Default has occurred and is continuing, any
Issuer Trustee may be removed at any time by the holder of all the New Common
Securities. If a Debenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by
the holders of a majority in Liquidation Amount of the outstanding New Capital
Securities. In no event will the holders of the New Capital Securities have
the right to vote to appoint, remove or replace the Administrative Trustees,
which voting rights are vested exclusively in the holder of all the New Common
Securities. No resignation or removal of an Issuer Trustee and no appointment
of a successor trustee will be effective until the acceptance of appointment
by the successor trustee in accordance with the provisions of the New Trust
Agreement.
Merger or Consolidation of Issuer Trustees
Any entity into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such Issuer
Trustee is a party, or any entity succeeding to all or substantially all the
corporate trust business of such Issuer Trustee, will be the successor of such
Issuer Trustee under the New Trust Agreement, provided such entity is
otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Issuer Trust
The Issuer Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except as described below or as
otherwise set forth in the New Trust Agreement. The Issuer Trust may, at the
request of the holder of all the New Common Securities and with the consent of
the Administrative Trustees, but without the consent of the holders of the
outstanding New Capital Securities, merge with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the
laws of any State, so long as (i) such successor entity either (a) expressly
assumes all of the obligations of the Issuer Trust with respect to the New
Capital Securities or (b) substitutes for the New Capital Securities other
securities having substantially the same terms as the New Capital Securities
(the "Successor Securities") so long as the Successor Securities have the same
priority as the New Capital Securities with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) a trustee of such
successor entity, possessing the same powers and duties as the Property
Trustee, is appointed to hold the New Junior Subordinated Debentures, (iii)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the New Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the New Capital Securities
(including any Successor Securities) in any material respect, (v) such
successor entity has a purpose substantially identical to that of the Issuer
Trust, (vi) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Issuer Trust has received an opinion from
independent counsel experienced in such matters to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the New Capital Securities (including any Successor Securities) in
any material respect and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the Issuer
Trust nor such successor entity will be required to register as an investment
company under the Investment Company Act, and (vii) the Corporation or any
permitted successor or assignee owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the New Guarantee.
Notwithstanding the foregoing, the Issuer Trust may not, except with the
consent of holders of 100% in aggregate Liquidation Amount of the New Capital
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an
entirety to, any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause
the Issuer Trust or the successor entity to be taxable as a corporation or as
other than a grantor trust for United States federal income tax purposes.
44
<PAGE>
Voting Rights; Amendment of New Trust Agreement
Except as provided below and under "--Removal of Issuer Trustees;
Appointment of Successors" and "--Description of New Guarantee--Amendments and
Assignment" and as otherwise required by law and the New Trust Agreement, the
holders of the New Capital Securities will have no voting rights.
The New Trust Agreement may be amended from time to time by the holder of
all the New Common Securities and the Issuer Trustees, without the consent of
the holders of the New Capital Securities (i) to cure any ambiguity, correct
or supplement any provisions in the New Trust Agreement that may be
inconsistent with any other provision, or to make any other provisions with
respect to matters or questions arising under the New Trust Agreement, which
are not inconsistent with the other provisions of the New Trust Agreement,
provided that any such amendment does not adversely affect in any material
respect the interests of any holder of New Trust Securities, or (ii) to
modify, eliminate or add to any provisions of the New Trust Agreement to such
extent as may be necessary to ensure that the Issuer Trust will not be taxable
as a corporation or will be taxable as a grantor trust for United States
federal income tax purposes at any time that any New Trust Securities are
outstanding or to ensure that the Issuer Trust will not be required to
register as an "investment company" under the Investment Company Act, and any
amendments of the New Trust Agreement will become effective when notice of
such amendment is given to the holders of New Trust Securities. The New Trust
Agreement may be amended by the holder of all the New Common Securities and
the Issuer Trustees with (i) the consent of holders representing not less than
a majority in aggregate Liquidation Amount of the outstanding New Capital
Securities and (ii) receipt by the Issuer Trustees of an opinion of counsel to
the effect that such amendment or the exercise of any power granted to the
Issuer Trustees in accordance with such amendment will not affect the Issuer
Trust's not being taxable as a corporation or being taxable as a grantor trust
for United States federal income tax purposes or the Issuer Trust's exemption
from status as an "investment company" under the Investment Company Act,
except that without the consent of each holder of New Trust Securities, the
New Trust Agreement may not be amended to (i) change the amount or timing of
any Distribution on the New Trust Securities or otherwise adversely affect the
amount of any Distribution required to be made in respect of the New Trust
Securities as of a specified date or (ii) restrict the right of a holder of
New Trust Securities to institute suit for the enforcement of any such payment
on or after such date.
So long as any New Junior Subordinated Debentures are held by the Issuer
Trust, the Property Trustee will not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee,
or execute any trust or power conferred on the Property Trustee with respect
to the New Junior Subordinated Debentures, (ii) waive any past default that is
waivable under Section 5.13 of the New Junior Subordinated Indenture, (iii)
exercise any right to rescind or annul a declaration that the New Junior
Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the New Junior Subordinated
Indenture or the New Junior Subordinated Debentures, where such consent shall
be required, without, in each case, obtaining the prior approval of the
holders of at least a majority in aggregate Liquidation Amount of the
outstanding New Capital Securities, except that if a consent under the New
Junior Subordinated Indenture would require the consent of each holder of New
Junior Subordinated Debentures affected thereby, no such consent will be given
by the Property Trustee without the prior consent of each holder of the New
Capital Securities. The Property Trustee may not revoke any action previously
authorized or approved by a vote of the holders of the New Capital Securities
except by subsequent vote of the holders of the New Capital Securities. The
Property Trustee will notify each holder of New Capital Securities of any
notice of default with respect to the New Junior Subordinated Debentures. In
addition to obtaining the foregoing approvals of the holders of the New
Capital Securities, before taking any of the foregoing actions, the Property
Trustee will obtain an opinion of counsel experienced in such matters to the
effect that the Issuer Trust will not be taxable as a corporation or have its
status as a grantor trust affected for United States federal income tax
purposes on account of such action.
Any required approval of holders of New Capital Securities may be given at a
meeting of holders of New Capital Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of New Capital Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be given to each registered holder of New Capital Securities in the
manner set forth in the New Trust Agreement.
45
<PAGE>
No vote or consent of the holders of New Capital Securities will be required
to redeem and cancel New Capital Securities in accordance with the New Trust
Agreement.
Notwithstanding that holders of New Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the New
Capital Securities that are owned by the Corporation, the Issuer Trustees or
any affiliate of the Corporation or any Issuer Trustee, will, for purposes of
such vote or consent, be treated as if they were not outstanding.
Book-Entry, Delivery and Form
The New Capital Securities will be issued in fully registered form in
minimum blocks of at least 100 (representing a minimum of $100,000 aggregate
Liquidation Amount) and the New Capital Securities must at all times be held
in blocks of at least 100.
The New Capital Securities initially will be evidenced by one or more global
New Capital Securities (collectively, the "Global New Capital Securities")
which will be deposited with, or on behalf of, DTC and registered in the name
of a nominee of DTC. Except as set forth below, record ownership of the Global
New Capital Securities may be transferred, in whole or in part, only to
another nominee of DTC or to a successor of DTC or its nominee.
Payment of Distributions on, and the Redemption Price of, the Global New
Capital Securities will be made to DTC's nominee, as the registered holder of
the Global New Capital Securities, by wire transfer of immediately available
funds on each Distribution Date or Redemption Date. Neither the Corporation
nor the Issuer Trustees (or any securities registrar, paying agent or exchange
agent under the New Trust Agreement) will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Global New Capital Securities, for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests or for the performance by DTC or its Participants (as
defined below) or Indirect Participants (as defined below) of their respective
obligations under the rules and procedures governing their operations.
The Corporation and the Issuer Trust have been informed by DTC that, with
respect to any payment of Distributions on, or the Redemption Price of, the
Global New Capital Securities, DTC's practice is to credit the accounts of
organizations that are participants in DTC ("Participants") on the payment
date therefor with payments in amounts proportionate to their respective
beneficial interests in the New Capital Securities represented by the Global
New Capital Securities, as shown on the records of DTC (adjusted as necessary
so that such payments are made with respect to whole New Capital Securities
only), unless DTC has reason to believe that it will not receive payment on
such payment date. Payments by Participants to owners of beneficial interests
in New Capital Securities represented by the Global New Capital Securities
held through such Participants will be the responsibility of such
Participants, as is the case with securities held for the accounts of
customers registered in "street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of certain banks, brokers, dealers, trust companies and other parties
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly ("Indirect Participants"), the ability of a
person having a beneficial interest in New Capital Securities represented by
the Global New Capital Securities to pledge such interest to persons or
entities that do not participate in the DTC system, or otherwise take actions
in respect of such interest, may be affected by the lack of a physical
certificate evidencing such interest. Furthermore, the laws of some states
require that certain persons take physical delivery of securities in
definitive form. Consequently, the ability to transfer beneficial interests in
the Global New Capital Securities to such persons may be limited.
DTC has advised the Corporation and the Issuer Trust that it will take any
action permitted to be taken by a holder of New Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in
the Global New Capital Securities are credited and only in respect of the
aggregate Liquidation
46
<PAGE>
Amount of the New Capital Securities represented by the Global New Capital
Securities as to which such Participant or Participants has or have given such
direction.
DTC has advised the Corporation and the Issuer Trust as follows: DTC is a
limited purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its Participants and to facilitate the clearance and
settlement of securities transactions between Participants through electronic
book-entry changes to accounts of its Participants, 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. Certain of such Participants (or their
representatives), together with other entities, own DTC. Indirect access to
the DTC system 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.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global New Capital Securities among Participants
of DTC, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. The Global
New Capital Securities are exchangeable for definitive New Capital Securities
in registered certificated form if (i) DTC advises the Corporation and the
Property Trustee that it is no longer willing or able to properly discharge
its responsibilities with respect to the Global New Capital Securities, and
the Property Trustee is unable to locate a qualified successor, (ii) the
Issuer Trust at its option advises DTC in writing that it elects to terminate
the book-entry system through DTC or (iii) after the occurrence of a Debenture
Event of Default. In all cases, certificated New Capital Securities delivered
in exchange for any Global New Capital Securities or beneficial interests
therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of DTC (in accordance with its
customary procedures.
So long as DTC or its nominee is the registered holder of the Global New
Capital Securities, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the New Capital Securities represented
by the Global New Capital Securities for all purposes under the New Trust
Agreement. Except as provided above, owners of beneficial interests in the
Global New Capital Securities will not be entitled to have any of the
individual New Capital Securities represented by the Global New Capital
Securities registered in their names, will not receive or be entitled to
receive physical delivery of any such New Capital Securities in definitive
form and will not be considered the owners or holders thereof under the New
Trust Agreement.
Payment and Paying Agency
Payments in respect of the New Capital Securities will be made to DTC, which
will credit the relevant accounts at DTC on the applicable Distribution Dates
or, if the New Capital Securities are not held by DTC, such payments will be
made by check mailed to the address of the holder entitled thereto as such
address appears on the securities register for the New Trust Securities. The
paying agent (the "Paying Agent") will initially be the Property Trustee and
any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent will be
permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Administrative Trustees. If the Property Trustee is
no longer the Paying Agent, the Administrative Trustees will appoint a
successor (which must be a bank or trust company reasonably acceptable to the
Corporation) to act as Paying Agent.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent for the New
Capital Securities. Registration of transfers of New Capital Securities will
be effected without charge by or on behalf of the Issuer Trust, but upon
payment of any tax or other governmental charges that may be imposed in
connection with any transfer or
47
<PAGE>
exchange. The Issuer Trust will not be required to register or cause to be
registered the transfer of the New Capital Securities after the New Capital
Securities have been called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are specifically
set forth in the New Trust Agreement and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. The Property Trustee is under
no obligation to exercise any of the powers vested in it by the New Trust
Agreement at the request of any holder of New Trust Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. The Property Trustee is not required to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Property Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it. If no Event
of Default has occurred and is continuing and the Property Trustee is required
to decide between alternative courses of action, or construe ambiguous
provisions in the New Trust Agreement, or is unsure of the application of any
provision of the New Trust Agreement, and the matter is not one on which
holders of New Trust Securities are entitled under the New Trust Agreement to
vote, then the Property Trustee will take such action as is directed by the
Corporation and, if not so directed, will take such action as it deems
advisable and in the best interests of the holders of the New Trust Securities
and will have no liability except for its own bad faith, negligence or willful
misconduct.
Wilmington Trust Company, the Property Trustee, currently serves and may
serve from time to time in the future as trustee under other indentures or
trust agreements with the Corporation or its subsidiaries or affiliates
relating to other issues of their securities. In addition, the Corporation and
certain of its affiliates may have other banking relationships with Wilmington
Trust Company.
Governing Law
The New Trust Agreement and the New Trust Securities will be governed by and
construed in accordance with the laws of the State of Delaware.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuer Trust in such a way that the Issuer Trust
will not be deemed to be an "investment company" required to be registered
under the Investment Company Act or taxable as a corporation and will be
taxable as a grantor trust for United States federal income tax purposes and
so that the New Junior Subordinated Debentures will be treated as indebtedness
of the Corporation for United States federal income tax purposes. In this
connection, the Corporation and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of
trust of the Issuer Trust or the New Trust Agreement, that the Corporation and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the New Capital Securities.
Holders of the New Capital Securities have no preemptive or similar rights.
The Issuer Trust may not borrow money or issue debt or mortgage or pledge
any of its assets.
DESCRIPTION OF NEW JUNIOR SUBORDINATED DEBENTURES
The New Junior Subordinated Debentures are to be issued under the New Junior
Subordinated Indenture, under which Wilmington Trust Company is acting as
Debenture Trustee. This summary of certain terms and provisions of the New
Junior Subordinated Debentures and the New Junior Subordinated Indenture does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the
48
<PAGE>
New Junior Subordinated Indenture, including the definitions therein of
certain terms. Whenever particular defined terms of the New Junior
Subordinated Indenture (as amended or supplemented from time to time) are
referred to herein, such defined terms are incorporated herein by reference.
The New Junior Subordinated Indenture will be qualified as an indenture under
the Trust Indenture Act. Wilmington Trust Company, as Debenture Trustee, will
act as trustee for the purposes of compliance with the Trust Indenture Act. A
copy of the form of New Junior Subordinated Indenture is available from the
Debenture Trustee upon request.
General
Concurrently with the issuance of the Old Capital Securities, the Old Issuer
Trust invested the proceeds thereof, together with the consideration paid by
the Corporation for the common securities of the Old Issuer Trust, in the Old
Junior Subordinated Debentures. Pursuant to the Exchange Offer, the
Corporation will issue the New Junior Subordinated Debentures to the Issuer
Trust in exchange for all the New Trust Securities to be issued by the Issuer
Trust. The New Capital Securities will be delivered by the Corporation in
exchange for the Old Capital Securities as described under "The Exchange
Offer." The New Junior Subordinated Debentures will bear interest, accruing
from the most recent interest payment date of the Old Junior Subordinated
Debentures or, if no interest has been paid on such Old Junior Subordinated
Debentures, from January 16, 1997, at the annual rate of 7.90% of the
principal amount thereof, payable semi-annually in arrears on January 15 and
July 15 of each year (each, an "Interest Payment Date"), commencing on the
first such date following the date of original issuance of the New Junior
Subordinated Debentures, to the person in whose name each New Junior
Subordinated Debenture is registered at the close of business on the fifteenth
day (whether or not a Business Day) next preceding such Interest Payment Date.
It is anticipated that, until the liquidation, if any, of the Issuer Trust,
each New Junior Subordinated Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the New Trust
Securities. The amount of interest payable for any period less than a full
interest period will be computed on the basis of a 360-day year of twelve 30-
day months and the actual days elapsed in a partial month in such period. The
amount of interest payable for any full interest period will be computed by
dividing the rate per annum by two. If any date on which interest is payable
on the New Junior Subordinated Debentures is not a Business Day, then payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of
any such delay), with the same force and effect as if made on the date such
payment was originally payable. Accrued interest that is not paid on the
applicable Interest Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the rate per annum of 7.90%,
compounded semi-annually and computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period.
The amount of additional interest payable for any full interest period will be
computed by dividing the rate per annum by two. The term "interest" as used
herein includes semi-annual interest payments, interest on semi-annual
interest payments not paid on the applicable Interest Payment Date and
Additional Sums, as applicable.
The New Junior Subordinated Debentures will mature on January 15, 2027.
The New Junior Subordinated Debentures will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Indebtedness of
the Corporation. Because the Corporation is a holding company, the right of
the Corporation to participate in any distribution of assets of any
subsidiary, including Bankers, upon such subsidiary's dissolution, winding-up,
liquidation or reorganization or otherwise (and thus the ability of holders of
the New Junior Subordinated Debentures to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that subsidiary,
except to the extent that the Corporation may itself be a creditor of that
subsidiary and its claims are recognized. There are various legal limitations
on the extent to which certain of the Corporation's subsidiaries may extend
credit, pay dividends or otherwise supply funds to the Corporation or certain
of its other subsidiaries. Accordingly, the New Junior Subordinated Debentures
will be effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of New Junior Subordinated Debentures
should look only to the assets of the Corporation for payments on the New
Junior Subordinated Debentures. See "Bankers Trust New York Corporation." The
New Junior Subordinated Indenture does not limit the incurrence or issuance of
other secured or unsecured debt by the Corporation, including Senior
Indebtedness, whether under the New Junior Subordinated Indenture or any
existing indenture or other indenture that the Corporation may enter into in
the future or otherwise. See "--Subordination."
49
<PAGE>
Option to Extend Interest Payment Period
So long as no Debenture Event of Default has occurred and is continuing, the
Corporation has the right at any time during the term of the New Junior
Subordinated Debentures to defer the payment of interest at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods
with respect to each Extension Period, provided that no Extension Period may
extend beyond the Stated Maturity of the New Junior Subordinated Debentures as
in effect on the date on which the Corporation elects to effect such deferral.
At the end of such Extension Period, the Corporation must pay all interest
then accrued and unpaid (together with interest thereon at the annual rate of
7.90%, compounded semi-annually and computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in such
period, to the extent permitted by applicable law). The amount of additional
interest payable for any full interest period will be computed by dividing the
rate per annum by two. During an Extension Period, interest will continue to
accrue and holders of New Junior Subordinated Debentures (or holders of New
Capital Securities while outstanding) will be required to accrue interest
income for United States federal income tax purposes. See "Certain Federal
Income Tax Consequences--Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that rank
pari passu in all respects with or junior in interest to the New Junior
Subordinated Debentures (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Corporation in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of any one or more employees, officers, directors or consultants,
in connection with a dividend reinvestment or stockholder stock purchase plan
or in connection with the issuance of capital stock of the Corporation (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the
applicable Extension Period, (b) as a result of an exchange or conversion of
any class or series of the Corporation's capital stock (or any capital stock
of a subsidiary of the Corporation) for any class or series of the
Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c)
the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any stockholder's rights plan, or the issuance of
rights, stock or other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in
the form of stock, warrants, options or other rights where the dividend stock
or the stock issuable upon exercise of such warrants, options or other rights
is the same stock as that on which the dividend is being paid or ranks pari
passu with or junior to such stock). Prior to the termination of any such
Extension Period, the Corporation may further defer the payment of interest,
provided that no Extension Period may exceed 10 consecutive semi-annual
periods or extend beyond the Stated Maturity of the New Junior Subordinated
Debentures as in effect on the date on which the Corporation elects to effect
such deferral. Upon the termination of any such Extension Period and the
payment of all amounts then due, the Corporation may elect to begin a new
Extension Period subject to the above conditions. No interest shall be due and
payable during an Extension Period, except at the end thereof. The Corporation
must give the Property Trustee notice of its election of such Extension Period
at least one Business Day prior to the earlier of (i) the date the
Distributions on the New Capital Securities would have been payable but for
the election to begin such Extension Period and (ii) the date the Property
Trustee is required to give notice to holders of the New Capital Securities of
the record date or the date such Distributions are payable, but in any event
not less than one Business Day prior to such record date. The Property Trustee
will give notice of the Corporation's election to begin a new Extension Period
to the holders of the New Capital Securities. There is no limitation on the
number of times that the Corporation may elect to begin an Extension Period.
Redemption
The New Junior Subordinated Debentures are redeemable prior to maturity at
the option of the Corporation (i) on or after January 15, 2007, in whole at
any time or in part from time to time, or (ii) in certain circumstances
50
<PAGE>
as described under "--Conditional Right to Shorten Maturity or Redeem Upon a
Tax Event, Investment Company Event or Capital Treatment Event" in whole (but
not in part) at any time within 90 days following the occurrence and during
the continuation of a Tax Event, Investment Company Event or Capital Treatment
Event (or, if the approval of the Federal Reserve is then required for such
redemption, on such later date as promptly as reasonably practicable after
such approval is obtained), in each case at the redemption price described
below. The proceeds of any such redemption will be used by the Issuer Trust to
redeem the New Capital Securities. The Corporation has committed to the
Federal Reserve that the Corporation will not exercise its right to redeem the
New Junior Subordinated Debentures prior to the Stated Maturity without having
received the prior approval of the Federal Reserve to do so, if then required
under applicable Federal Reserve capital guidelines or policies.
The Redemption Price for New Junior Subordinated Debentures in the case of
any redemption under (i) above shall equal the following prices, expressed in
percentages of the principal amount, together with accrued interest to but
excluding the date fixed for redemption. If redeemed during the 12-month
period beginning January 15:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2007......................................................... 103.4120%
2008......................................................... 103.0708
2009......................................................... 102.7296
2010......................................................... 102.3884
2011......................................................... 102.0472
2012......................................................... 101.7060
2013......................................................... 101.3648
2014......................................................... 101.0236
2015......................................................... 100.6824
2016......................................................... 100.3412
</TABLE>
and at 100% on or after January 15, 2017.
The Redemption Price for New Junior Subordinated Debentures, in the case of
a redemption following a Tax Event, Investment Company Event or Capital
Treatment Event, as described under (ii) above, will be equal to 100% of the
principal amount, together with accrued interest to but excluding the date
fixed for redemption.
Conditional Right to Shorten Maturity or Redeem Upon a Tax Event,
Investment Company Event or Capital Treatment Event
The Corporation, as the holder of all the New Common Securities, has the
right to dissolve the Issuer Trust and, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, to cause the New
Junior Subordinated Debentures to be distributed to the holders of the New
Trust Securities in liquidation of the Issuer Trust. The Corporation may
exercise this right at any time, including following the occurrence of a Tax
Event, Investment Company Event or Capital Treatment Event. See "--Description
of New Capital Securities--Liquidation Distribution Upon Dissolution."
In addition, if a Tax Event, Investment Company Event or Capital Treatment
Event occurs and either:
(i) in the opinion of counsel to the Corporation experienced in such
matters, there would be more than an insubstantial risk that, after the
distribution of the New Junior Subordinated Debentures to the holders of
the New Trust Securities in liquidation of the Issuer Trust, an Adverse Tax
Consequence would continue to exist, or
(ii) in the reasonable determination of the Corporation, there would be
more than an insubstantial risk that, after the distribution of the New
Junior Subordinated Debentures to the holders of the New Trust
51
<PAGE>
Securities in liquidation of the Issuer Trust, the Corporation will not be
entitled to treat an amount equal to the Liquidation Amount of the New
Capital Securities as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then
in effect and applicable to the Corporation,
or if, at the time of such event, the New Junior Subordinated Debentures are
not held by the Issuer Trust, then the Corporation will have the right
(without being required to dissolve the Issuer Trust) to shorten the Stated
Maturity of the New Junior Subordinated Debentures such that, in the opinion
of counsel to the Corporation experienced in such matters, the interest
payable by the Corporation on the New Junior Subordinated Debentures will be
deductible for United States federal income tax purposes. The Corporation may
shorten the Stated Maturity of the New Junior Subordinated Debentures only to
the minimum extent required to achieve such effect, and in any event only to a
date not earlier than January 15, 2017. The action of shortening the Stated
Maturity is referred to herein as a "Maturity Advancement." The Corporation
has committed that it will not effect a Maturity Advancement without having
received the prior approval of the Federal Reserve to do so, if then required
under applicable Federal Reserve capital guidelines or policies.
If either:
(i) in the opinion of counsel to the Corporation experienced in such
matters, there would be more than an insubstantial risk that, after the
Corporation has effected a Maturity Advancement in accordance with the
previous paragraph, an Adverse Tax Consequence would continue to exist, or
(ii) in the reasonable determination of the Corporation, there would be
more than an insubstantial risk that, after the Corporation has effected a
Maturity Advancement in accordance with the previous paragraph, the
Corporation will not be entitled to treat an amount equal to the
Liquidation Amount of the New Capital Securities as "Tier 1 Capital" (or
the then equivalent thereof) for purposes of the capital adequacy
guidelines of the Federal Reserve, as then in effect and applicable to the
Corporation,
or if the Federal Reserve does not approve the Maturity Advancement following
the Corporation's request, then the Corporation will have the right (without
being required to effect a Maturity Advancement) to redeem, at 100% of the
aggregate principal amount plus accrued interest to but excluding the date
fixed for redemption, the New Junior Subordinated Debentures, in whole but not
in part, at any time within 90 days following the time of such event (or, if
the approval of the Federal Reserve is then required for such redemption, on
such later date as promptly as is reasonably practicable after such approval
is obtained). Such redemption will be made as described under "--Redemption"
above.
Holders of New Capital Securities should consult their own tax advisors
regarding the tax consequences to them of a Maturity Advancement.
See "Certain Federal Income Tax Consequences--Possible Tax Law Changes" for
a discussion of certain legislative proposals that, if adopted, could give
rise to a Tax Event, which may permit the Corporation to shorten the Stated
Maturity of the New Junior Subordinated Debentures or to cause a redemption of
the New Capital Securities prior to January 15, 2007.
Additional Sums
The Corporation has covenanted in the New Junior Subordinated Indenture
that, if and for so long as (i) the Issuer Trust is the holder of all New
Junior Subordinated Debentures and (ii) the Issuer Trust is required to pay
any additional taxes, duties or other governmental charges as a result of a
Tax Event, the Corporation will pay as Additional Sums on the New Junior
Subordinated Debentures such amounts as may be required so that the
Distributions payable by the Issuer Trust will not be reduced as a result of
any such additional taxes, duties or other governmental charges. See "--
Description of New Capital Securities--Redemption."
52
<PAGE>
Registration, Denomination and Transfer
The New Junior Subordinated Debentures will initially be registered in the
name of the Property Trustee, as trustee of the Issuer Trust. If the New
Junior Subordinated Debentures are distributed to holders of New Capital
Securities, it is anticipated that the depositary arrangements for the New
Junior Subordinated Debentures will be substantially identical to those in
effect for the New Capital Securities. See "--Description of New Capital
Securities--Book-Entry, Delivery and Form."
Although DTC has agreed to the procedures described above, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed
by the Corporation within 90 days of receipt of notice from DTC to such
effect, the Corporation will cause the New Junior Subordinated Debentures to
be issued in definitive form.
Payments on New Junior Subordinated Debentures represented by a global
security will be made to DTC's nominee, as the registered holder of the New
Junior Subordinated Debentures, as described under "--Description of New
Capital Securities--Book-Entry, Delivery and Form." If New Junior Subordinated
Debentures are issued in certificated form, principal and interest will be
payable, the transfer of the New Junior Subordinated Debentures will be
registrable, and New Junior Subordinated Debentures will be exchangeable for
New Junior Subordinated Debentures of other authorized denominations of a like
aggregate principal amount, at the corporate trust office of the Debenture
Trustee in Wilmington, Delaware or at the offices of any paying agent or
transfer agent appointed by the Corporation, provided that payment of interest
may be made at the option of the Corporation by check mailed to the address of
the persons entitled thereto or by wire transfer.
The New Junior Subordinated Debentures will be issuable only in registered
form without coupons in minimum denominations of $100,000 and integral
multiples of $1,000 in excess thereof. New Junior Subordinated Debentures will
be exchangeable for other New Junior Subordinated Debentures of like tenor, of
any authorized denominations, and of a like aggregate principal amount.
New Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the securities registrar appointed under the
New Junior Subordinated Debenture or at the office of any transfer agent
designated by the Corporation for such purpose without service charge and upon
payment of any taxes and other governmental charges as described in the New
Junior Subordinated Indenture. The Corporation will appoint the Debenture
Trustee as securities registrar under the New Junior Subordinated Indenture.
The Corporation may at any time designate additional transfer agents with
respect to the New Junior Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
New Junior Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of selection for redemption of the New Junior
Subordinated Debentures to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) transfer or
exchange any New Junior Subordinated Debentures so selected for redemption,
except, in the case of any New Junior Subordinated Debentures being redeemed
in part, any portion thereof not to be redeemed.
Any moneys deposited with the Debenture Trustee or any paying agent, or then
held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any New Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any)
or interest has become due and payable shall, at the request of the
Corporation, be repaid to the Corporation and the holder of such New Junior
Subordinated Debenture shall thereafter look, as a general unsecured creditor,
only to the Corporation for payment thereof.
53
<PAGE>
Restrictions on Certain Payments; Certain Covenants of the Corporation
The Corporation has covenanted that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that rank
pari passu in all respects with or junior in interest to the New Junior
Subordinated Debentures (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Corporation in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of any one or more employees, officers, directors or consultants,
in connection with a dividend reinvestment or stockholder stock purchase plan
or in connection with the issuance of capital stock of the Corporation (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the
applicable event, (b) as a result of an exchange or conversion of any class or
series of the Corporation's capital stock (or any capital stock of a
subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any stockholder's rights plan, or the issuance of rights, stock or other
property under any stockholder's rights plan, or the redemption or repurchase
of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock), if at such time (i) there has occurred any event (a) of
which the Corporation has actual knowledge that with the giving of notice or
the lapse of time, or both, would constitute a Debenture Event of Default and
(b) that the Corporation has not taken reasonable steps to cure, (ii) if the
New Junior Subordinated Debentures are held by the Issuer Trust, the
Corporation is in default with respect to its payment of any obligations under
the New Guarantee or (iii) the Corporation has given notice of its selection
of an Extension Period as provided in the New Junior Subordinated Indenture
and has not rescinded such notice, or such Extension Period, or any extension
thereof, is continuing.
The Corporation has covenanted in the New Junior Subordinated Indenture (i)
to continue to hold, directly or indirectly, 100% of the New Common
Securities, provided that certain successors that are permitted pursuant to
the New Junior Subordinated Indenture may succeed to the Corporation's
ownership of the New Common Securities, (ii) as holder of the New Common
Securities, not to voluntarily dissolve, wind-up or liquidate the Issuer
Trust, other than (a) in connection with a distribution of New Junior
Subordinated Debentures to the holders of the New Capital Securities in
liquidation of the Issuer Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the New Trust Agreement and (iii)
to use its reasonable efforts, consistent with the terms and provisions of the
New Trust Agreement, to cause the Issuer Trust to continue not to be taxable
as a corporation and to be taxable as a grantor trust for United States
federal income tax purposes. In addition, the Corporation has committed to the
Federal Reserve that, so long as the Corporation (or any affiliate) is the
holder of the New Common Securities, the Corporation (or such affiliate) will
not voluntarily terminate or liquidate the Issuer Trust prior to the Stated
Maturity of the New Junior Subordinated Debentures without having received the
prior approval of the Federal Reserve to do so, if then required under
applicable Federal Reserve capital guidelines or policies.
Modification of New Junior Subordinated Indenture
From time to time the Corporation and the Debenture Trustee may, without the
consent of the holders of the New Junior Subordinated Debentures, amend, waive
or supplement the provisions of the New Junior Subordinated Indenture for
specified purposes, including, among other things, curing ambiguities, defects
or inconsistencies (provided that any such action does not materially
adversely affect the interests of the holders of the New Junior Subordinated
Debentures or the holders of the New Capital Securities so long as they remain
outstanding) and qualifying, or maintaining the qualification of, the New
Junior Subordinated Indenture under the Trust Indenture Act. The New Junior
Subordinated Indenture contains provisions permitting the Corporation
54
<PAGE>
and the Debenture Trustee, with the consent of the holders of not less than a
majority in principal amount of the New Junior Subordinated Debentures, to
modify the New Junior Subordinated Indenture in a manner affecting the rights
of the holders of the New Junior Subordinated Debentures, except that no such
modification may, without the consent of the holder of each outstanding New
Junior Subordinated Debenture so affected, (i) change the Stated Maturity of
the New Junior Subordinated Debentures, or reduce the principal amount
thereof, the rate of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the currency in
which, any such amount is payable or impair the right to institute suit for
the enforcement of any New Junior Subordinated Debenture or (ii) reduce the
percentage of the principal amount of New Junior Subordinated Debentures, the
holders of which are required to consent to any such modification of the New
Junior Subordinated Indenture. Furthermore, so long as any of the New Capital
Securities remain outstanding, no such modification may be made that adversely
affects the holders of such New Capital Securities in any material respect,
and no termination of the New Junior Subordinated Indenture may occur, and no
waiver of any Debenture Event of Default or compliance with any covenant under
the New Junior Subordinated Indenture may be effective, without the prior
consent of the holders of at least a majority in aggregate Liquidation Amount
of the outstanding New Capital Securities unless and until the principal of
(and premium, if any, on) the New Junior Subordinated Debentures and all
accrued and unpaid interest thereon have been paid in full and certain other
conditions are satisfied.
Debenture Events of Default
The New Junior Subordinated Indenture provides that any one or more of the
following events with respect to the New Junior Subordinated Debentures that
has occurred and is continuing constitutes an "Event of Default" with respect
to the New Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on the New Junior
Subordinated Debentures when due (subject to the deferral of any due date
in the case of an Extension Period); or
(ii) failure to pay any principal of (or premium, if any, on) the New
Junior Subordinated Debentures when due, whether at maturity, upon
redemption, by declaration of acceleration or otherwise; or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the New Junior Subordinated Indenture for 90 days
after written notice to the Corporation from the Debenture Trustee or the
holders of at least 25% in aggregate outstanding principal amount of the
outstanding New Junior Subordinated Debentures; or
(iv) certain events of bankruptcy, insolvency or reorganization of the
Corporation.
For purposes of the New Trust Agreement and this Prospectus, each such Event
of Default under the New Junior Subordinated Debenture is referred to as a
"Debenture Event of Default." As described in "--Description of New Capital
Securities--Events of Default; Notice," the occurrence of a Debenture Event of
Default will also constitute an Event of Default in respect of the New Capital
Securities.
The holders of at least a majority in aggregate principal amount of
outstanding New Junior Subordinated Debentures will have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee. The Debenture Trustee or the holders of
not less than 25% in aggregate principal amount of outstanding New Junior
Subordinated Debentures may declare the principal due and payable immediately
upon a Debenture Event of Default, and, if the Debenture Trustee or such
holders of New Junior Subordinated Debentures fail to make such declaration,
the holders of at least 25% in aggregate Liquidation Amount of the outstanding
New Capital Securities will have such right. The holders of a majority in
aggregate principal amount of outstanding New Junior Subordinated Debentures
may annul such declaration and waive the default if all defaults (other than
the non-payment of the principal of New Junior Subordinated Debentures which
has become due solely by such acceleration) have been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
If the holders of the New Junior Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the outstanding New Capital Securities will have such
right.
55
<PAGE>
The holders of at least a majority in aggregate principal amount of the
outstanding New Junior Subordinated Debentures may, on behalf of the holders
of all the New Junior Subordinated Debentures, waive any past default, except
a default in the payment of principal (or premium, if any) or interest (unless
such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default in respect of a
covenant or provision which under the New Junior Subordinated Indenture cannot
be modified or amended without the consent of the holder of each outstanding
New Junior Subordinated Debenture. See "--Modification of New Junior
Subordinated Indenture." The Corporation is required to file annually with the
Debenture Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
New Junior Subordinated Indenture.
If a Debenture Event of Default occurs and is continuing, the Property
Trustee will have the right to declare the principal of and the interest on
the New Junior Subordinated Debentures, and any other amounts payable under
the New Junior Subordinated Indenture, to be forthwith due and payable and to
enforce its other rights as a creditor with respect to the New Junior
Subordinated Debentures.
Enforcement of Certain Rights by Holders of New Capital Securities
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay any amounts
payable in respect of the New Junior Subordinated Debentures on the date such
amounts are otherwise payable, a registered holder of New Capital Securities
may institute a Direct Action against the Corporation for enforcement of
payment to such holder of an amount equal to the amount payable in respect of
New Junior Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the New Capital Securities held by such
holder. The Corporation may not amend the New Junior Subordinated Indenture to
remove the foregoing right to bring a Direct Action without the prior written
consent of the holders of all of the New Capital Securities. The Corporation
will have the right under the New Junior Subordinated Indenture to set off any
payment made to such holder of New Capital Securities by the Corporation in
connection with a Direct Action.
The holders of the New Capital Securities will not be able to exercise
directly any remedies available to the holders of the New Junior Subordinated
Debentures except under the circumstances described in the preceding
paragraph. See "--Description of New Capital Securities--Events of Default;
Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The New Junior Subordinated Indenture provides that the Corporation may not
consolidate with or merge into any other person or convey, transfer or lease
its properties and assets substantially as an entirety to any person, and no
person may consolidate with or merge into the Corporation or convey, transfer
or lease its properties and assets substantially as an entirety to the
Corporation, unless (i) if the Corporation consolidates with or merges into
another person or conveys or transfers its properties and assets substantially
as an entirety to any person, the successor person is organized under the laws
of the United States or any state or the District of Columbia, and such
successor person expressly assumes the Corporation's obligations in respect of
the New Junior Subordinated Debentures; (ii) immediately after giving effect
thereto, no Debenture Event of Default, and no event which, after notice or
lapse of time or both, would constitute a Debenture Event of Default, has
occurred and is continuing; and (iii) certain other conditions as prescribed
in the New Junior Subordinated Indenture are satisfied.
The provisions of the New Junior Subordinated Indenture do not afford
holders of the New Junior Subordinated Debentures protection in the event of a
highly leveraged or other transaction involving the Corporation that may
adversely affect holders of the New Junior Subordinated Debentures.
Satisfaction and Discharge
The New Junior Subordinated Indenture provides that when, among other
things, all New Junior Subordinated Debentures not previously delivered to the
Debenture Trustee for cancellation (i) have become due
56
<PAGE>
and payable or (ii) will become due and payable at the Stated Maturity (as
then in effect) within one year, and the Corporation deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in
an amount sufficient to pay and discharge the entire indebtedness on the New
Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation, for the principal (and premium, if any) and interest
to the date of the deposit or to the Stated Maturity, as the case may be, then
the New Junior Subordinated Indenture will cease to be of further effect
(except as to the Corporation's obligations to pay all other sums due pursuant
to the New Junior Subordinated Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Corporation
will be deemed to have satisfied and discharged the New Junior Subordinated
Indenture.
Subordination
The New Junior Subordinated Debentures will be subordinate and junior in
right of payment, to the extent set forth in the New Junior Subordinated
Indenture, to all Senior Indebtedness of the Corporation. If the Corporation
defaults in the payment of any principal, premium, if any, or interest, if
any, or any other amount payable on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for redemption
or by declaration of acceleration or otherwise, then, unless and until such
default has been cured or waived or has ceased to exist or all Senior
Indebtedness has been paid, no direct or indirect payment (in cash, property
or securities, by set-off or otherwise) may be made or agreed to be made on
the New Junior Subordinated Debentures, or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the New Junior
Subordinated Debentures.
As used herein, "Senior Indebtedness" means any obligation of the
Corporation to its creditors, whether now outstanding or subsequently
incurred, other than any obligation as to which, in the instrument creating or
evidencing the obligation or pursuant to which the obligation is outstanding,
it is provided that such obligation is not Senior Indebtedness, but does not
include trade accounts payable and accrued liabilities arising in the ordinary
course of business. Senior Indebtedness includes the Corporation's outstanding
subordinated debt securities and any subordinated debt securities issued in
the future with substantially similar subordination terms, but does not
include the Old Junior Subordinated Debentures or the New Junior Subordinated
Debentures or any junior subordinated debt securities issued in the future
with subordination terms substantially similar to those of the New Junior
Subordinated Debentures. Substantially all of the existing indebtedness of the
Corporation constitutes Senior Indebtedness.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Corporation, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Corporation, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Corporation for the benefit of creditors or (iv)
any other marshalling of the assets of the Corporation, all Senior
Indebtedness (including any interest thereon accruing after the commencement
of any such proceedings) must first be paid in full before any payment or
distribution, whether in cash, securities or other property, may be made on
account of the New Junior Subordinated Debentures. In such event, any payment
or distribution on account of the New Junior Subordinated Debentures, whether
in cash, securities or other property, that would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the New
Junior Subordinated Debentures will be paid or delivered directly to the
holders of Senior Indebtedness in accordance with the priorities then existing
among such holders until all Senior Indebtedness (including any interest
thereon accruing after the commencement of any such proceedings) has been paid
in full.
In the event of any such proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the holders of New Junior Subordinated
Debentures, together with the holders of any obligations of the Corporation
ranking on a parity with the New Junior Subordinated Debentures, will be
entitled to be paid from the remaining assets of the Corporation the amounts
at the time due and owing on the New Junior Subordinated Debentures and such
other obligations before any payment or other distribution, whether in cash,
property or otherwise, will be made on account of any capital stock or
obligations of the Corporation ranking junior to the New Junior Subordinated
Debentures and such other obligations. If any payment or distribution on
57
<PAGE>
account of the New Junior Subordinated Debentures of any character or any
security, whether in cash, securities or other property is received by any
holder of any New Junior Subordinated Debentures in contravention of any of
the terms hereof and before all the Senior Indebtedness has been paid in full,
such payment or distribution or security will be received in trust for the
benefit of, and must be paid over or delivered and transferred to, the holders
of the Senior Indebtedness at the time outstanding in accordance with the
priorities then existing among such holders for application to the payment of
all Senior Indebtedness remaining unpaid to the extent necessary to pay all
such Senior Indebtedness in full. By reason of such subordination, in the
event of the insolvency of the Corporation, holders of Senior Indebtedness may
receive more, ratably, and holders of the New Junior Subordinated Debentures
may receive less, ratably, than the other creditors of the Corporation. Such
subordination will not prevent the occurrence of any Event of Default in
respect of the New Junior Subordinated Debentures.
The New Junior Subordinated Indenture places no limitation on the amount of
additional Senior Indebtedness that may be incurred by the Corporation. The
Corporation expects from time to time to incur additional indebtedness
constituting Senior Indebtedness.
Information Concerning the Debenture Trustee
The duties of the Debenture Trustee will be subject to limitations and
qualifications substantially similar to those described with respect to the
Property Trustee under "--Description of New Capital Securities--Information
Concerning the Property Trustee."
For information concerning the relationships between Wilmington Trust
Company, the Debenture Trustee, and the Corporation, see "--Description of New
Capital Securities--Information Concerning the Property Trustee."
Governing Law
The New Junior Subordinated Indenture and the New Junior Subordinated
Debentures will be governed by and construed in accordance with the laws of
the State of New York.
DESCRIPTION OF NEW GUARANTEE
The New Guarantee will be executed and delivered by the Corporation,
concurrently with the issuance of New Capital Securities by the Issuer Trust,
for the benefit of the holders from time to time of the New Capital
Securities. Wilmington Trust Company will act as Guarantee Trustee under the
New Guarantee. This summary of certain provisions of the New Guarantee does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the New Guarantee, including the
definitions therein of certain terms. The New Guarantee will be qualified as
an indenture under the Trust Indenture Act. Wilmington Trust Company, as
Guarantee Trustee, will act as trustee for the purposes of compliance with the
Trust Indenture Act. A copy of the form of New Guarantee is available upon
request from the Guarantee Trustee. The Guarantee Trustee will hold the New
Guarantee for the benefit of the holders of the New Capital Securities.
General
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
below) to the holders of the New Capital Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer
Trust may have or assert other than the defense of payment. The following
payments with respect to the New Capital Securities, to the extent not paid by
or on behalf of the Issuer Trust (the "Guarantee Payments"), will be subject
to the New Guarantee: (i) any accumulated and unpaid Distributions required to
be paid on such New Capital Securities, to the extent that the Issuer Trust
has funds on hand available therefor at such time, (ii) the Redemption Price
with respect to any New Capital Securities called for redemption, to the
extent that the Issuer Trust has funds on hand available therefor at such
time, and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of the Issuer Trust (unless the New Junior Subordinated Debentures
are distributed to holders of the New Capital Securities),
58
<PAGE>
the lesser of (a) the Liquidation Distribution, to the extent that the Issuer
Trust has funds on hand available therefor at such time, and (b) the amount of
assets of the Issuer Trust remaining available for distribution to holders of
the New Capital Securities on liquidation of the Issuer Trust after
satisfaction of liabilities to creditors of such Issuer Trust as required by
applicable law. The Corporation's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Corporation to
the holders of the New Capital Securities or by causing the Issuer Trust to
pay such amounts to such holders.
The New Guarantee will be an irrevocable guarantee on a subordinated basis
of the Issuer Trust's obligations under the New Capital Securities, but will
apply only to the extent that the Issuer Trust has funds sufficient to make
such payments.
If the Corporation does not make payments on the New Junior Subordinated
Debentures held by the Issuer Trust, the Issuer Trust will not be able to pay
any amounts payable in respect of the New Capital Securities and will not have
funds legally available therefor. The New Guarantee will rank subordinate and
junior in right of payment to all Senior Indebtedness of the Corporation. See
"--Status of New Guarantee." Because the Corporation is a holding company, the
right of the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's dissolution, winding-up, liquidation or
reorganization or otherwise is subject to the prior claims of creditors of
that subsidiary, except to the extent that the Corporation may itself be a
creditor of that subsidiary and its claims are recognized. There are also
various legal limitations on the extent to which certain of the Corporation's
subsidiaries may extend credit, pay dividends or otherwise supply funds to the
Corporation or certain of its other subsidiaries. Accordingly, the
Corporation's obligations under the New Guarantee will be effectively
subordinated and junior in right of payment to all existing and future
liabilities of the Corporation's subsidiaries, and claimants under the New
Guarantee should look only to the assets of the Corporation for payments
thereunder. See "Bankers Trust New York Corporation." The New Guarantee will
not limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Indebtedness, whether under the New Junior
Subordinated Indenture, any other existing indenture or any other indenture
that the Corporation may enter into in the future or otherwise.
The Corporation has, through the New Guarantee, the New Trust Agreement, the
New Junior Subordinated Debentures, the New Junior Subordinated Indenture and
the New Expense Agreement, taken together, fully, irrevocably and
unconditionally guaranteed all of the Issuer Trust's obligations under the New
Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations in respect of the New Capital Securities. See
"Relationship Among the New Capital Securities, the New Junior Subordinated
Debentures, the New Guarantee and the New Expense Agreement."
Status of New Guarantee
The New Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Corporation in the same manner as the New Junior
Subordinated Debentures.
The New Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against any other person or
entity). The New Guarantee will be held by the Guarantee Trustee for the
benefit of the holders of the New Capital Securities. The New Guarantee will
not be discharged except by payment of the Guarantee Payments in full to the
extent not paid by the Issuer Trust or distribution to the holders of the New
Capital Securities of the New Junior Subordinated Debentures.
Amendments and Assignment
Except with respect to any changes which do not materially adversely affect
the rights of holders of the New Capital Securities (in which case no vote
will be required), the New Guarantee may not be amended without
59
<PAGE>
the prior approval of the holders of not less than a majority in aggregate
Liquidation Amount of the outstanding New Capital Securities. The manner of
obtaining any such approval will be as set forth under "--Description of New
Capital Securities--Voting Rights; Amendment of New Trust Agreement." All
guarantees and agreements contained in the New Guarantee will bind the
successors, assigns, receivers, trustees and representatives of the
Corporation and will inure to the benefit of the holders of the New Capital
Securities then outstanding.
Events of Default
An event of default under the New Guarantee will occur upon the failure of
the Corporation to perform any of its payment obligations thereunder, or to
perform any non-payment obligation if such non-payment default remains
unremedied for 30 days after notice thereof to the Corporation. The holders of
not less than a majority in aggregate Liquidation Amount of the outstanding
New Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the New Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the New Guarantee.
Any registered holder of New Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
New Guarantee without first instituting a legal proceeding against the Issuer
Trust, the Guarantee Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
New Guarantee.
Information Concerning the Guarantee Trustee
The duties of the Guarantee Trustee will be subject to limitations and
qualifications substantially similar to those described with respect to the
Property Trustee under "--Description of New Capital Securities--Information
Concerning the Property Trustee."
For information concerning the relationships between Wilmington Trust
Company, the Guarantee Trustee, and the Corporation, see "--Description of New
Capital Securities--Information Concerning the Property Trustee."
Termination of New Guarantee
The New Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the New Capital Securities, upon full
payment of the amounts payable with respect to the New Capital Securities upon
liquidation of the Issuer Trust or upon distribution of New Junior
Subordinated Debentures to the holders of the New Capital Securities. The New
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the New Capital Securities must restore
payment of any sums paid under the New Capital Securities or the New
Guarantee.
Governing Law
The New Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
DESCRIPTION OF NEW EXPENSE AGREEMENT
Pursuant to the New Expense Agreement, the Corporation will irrevocably and
unconditionally guarantee to each person or entity to whom the Issuer Trust
becomes indebted or liable, the full payment of any costs, expenses or
liabilities of the Issuer Trust, other than obligations of the Issuer Trust to
pay to holders of the New Trust Securities the amounts distributable to such
holders pursuant to the terms of the New Trust Securities. The New Expense
Agreement will constitute an unsecured obligation of the Corporation and will
rank subordinate and junior in right of payment to all Senior Indebtedness of
the Corporation in the same manner as the New Guarantee and the New Junior
Subordinated Debentures.
60
<PAGE>
RELATIONSHIP AMONG THE NEW CAPITAL SECURITIES, THE NEW JUNIOR
SUBORDINATED DEBENTURES, THE NEW GUARANTEE AND THE NEW EXPENSE AGREEMENT
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the New Capital
Securities (to the extent the Issuer Trust has funds available for such
payment) are irrevocably guaranteed by the Corporation as and to the extent
set forth under "Description of New Securities--Description of New Guarantee."
Taken together, the Corporation's obligations under the New Junior
Subordinated Debentures, the New Junior Subordinated Indenture, the New Trust
Agreement, the New Expense Agreement and the New Guarantee provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the New Capital Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation
of these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer Trust's obligations in respect of the
New Capital Securities. If and to the extent that the Corporation does not
make payments on the New Junior Subordinated Debentures, the Issuer Trust will
not have sufficient funds to pay Distributions or other amounts due on the New
Capital Securities. The New Guarantee does not cover payment of amounts
payable with respect to the New Capital Securities when the Issuer Trust does
not have sufficient funds to pay such amounts. In such event, the remedy of a
holder of the New Capital Securities is to institute a Direct Action against
the Corporation for enforcement of payment of the Corporation's obligations
under New Junior Subordinated Debentures having a principal amount equal to
the Liquidation Amount of the New Capital Securities held by such holder.
The obligations of the Corporation under the New Junior Subordinated
Debentures, the New Guarantee and the New Expense Agreement are subordinate
and junior in right of payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments are made when due on the New Junior Subordinated
Debentures, such payments will be sufficient to cover Distributions and other
payments distributable on the New Capital Securities, primarily because (i)
the aggregate principal amount of the New Junior Subordinated Debentures will
be equal to the sum of the aggregate stated Liquidation Amount of the New
Capital Securities and New Common Securities; (ii) the interest rate and
interest and other payment dates on the New Junior Subordinated Debentures
will match the Distribution rate, Distribution Dates and other payment dates
for the New Capital Securities; (iii) the Corporation will pay for all and any
costs, expenses and liabilities of the Issuer Trust except the Issuer Trust's
obligations to holders of the New Trust Securities; and (iv) the New Trust
Agreement further provides that the Issuer Trust will not engage in any
activity that is not consistent with the limited purposes of the Issuer Trust.
Notwithstanding anything to the contrary in the New Junior Subordinated
Indenture, the Corporation has the right to set off any payment it is
otherwise required to make thereunder against and to the extent the
Corporation has theretofore made, or is concurrently on the date of such
payment making, a payment under the New Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF NEW CAPITAL SECURITIES
A holder of any New Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Guarantee Trustee,
the Issuer Trust or any other person or entity. See "Description of New
Securities--Description of New Guarantee."
A default or event of default under any Senior Indebtedness of the
Corporation would not constitute a default or Event of Default in respect of
the New Capital Securities. However, in the event of payment defaults under,
or acceleration of, Senior Indebtedness of the Corporation, the subordination
provisions of the New Junior Subordinated Indenture provide that no payments
may be made in respect of the New Junior Subordinated Debentures until such
Senior Indebtedness has been paid in full or any payment default thereunder
has been
61
<PAGE>
cured or waived. See "Description of New Securities--Description of New Junior
Subordinated Debentures--Subordination."
LIMITED PURPOSE OF ISSUER TRUST
The New Capital Securities represent preferred undivided beneficial
interests in the assets of the Issuer Trust, and the Issuer Trust exists for
the sole purpose of issuing the New Capital Securities and New Common
Securities, holding the New Junior Subordinated Debentures and engaging in
only those other activities necessary or incidental thereto. A principal
difference between the rights of a holder of a New Capital Security and a
holder of a New Junior Subordinated Debenture is that a holder of a New Junior
Subordinated Debenture is entitled to receive from the Corporation payments on
New Junior Subordinated Debentures held, while a holder of New Capital
Securities is entitled to receive Distributions or other amounts distributable
with respect to the New Capital Securities from the Issuer Trust (or from the
Corporation under the New Guarantee) only if and to the extent the Issuer
Trust has funds available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the Issuer Trust, other than any such dissolution, winding-up or liquidation
involving the distribution of the New Junior Subordinated Debentures, after
satisfaction of liabilities to creditors of the Issuer Trust as required by
applicable law, the holders of the New Capital Securities will be entitled to
receive, out of assets held by the Issuer Trust, the Liquidation Distribution
in cash. See "Description of New Securities--Description of New Capital
Securities--Liquidation Distribution Upon Dissolution." Upon any voluntary or
involuntary liquidation or bankruptcy of the Corporation, the Property
Trustee, as the holder of the New Junior Subordinated Debentures, would be a
subordinated creditor of the Corporation, subordinated and junior in right of
payment to all Senior Indebtedness as set forth in the New Junior Subordinated
Indenture, but entitled to receive payment in full of all amounts payable with
respect to the New Junior Subordinated Debentures before any stockholders of
the Corporation receive payments or distributions. Since the Corporation is
the guarantor under the New Guarantee and has agreed under the New Expense
Agreement to pay for all costs, expenses and liabilities of the Issuer Trust
(other than the Issuer Trust's obligations to the holders of the New Trust
Securities), the positions of a holder of the New Capital Securities and a
holder of such New Junior Subordinated Debentures relative to other creditors
and to stockholders of the Corporation in the event of liquidation or
bankruptcy of the Corporation are expected to be substantially the same.
DESCRIPTION OF OLD SECURITIES
The terms of the Old Securities are identical in all material respects to
the New Securities, except that (i) the Old Securities have not been
registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the Registration Rights
Agreement (which rights will terminate upon consummation of the Exchange
Offer, except under limited circumstances); (ii) the New Capital Securities
will not provide for any increase in the Distribution rate thereon; and (iii)
the New Junior Subordinated Debentures will not provide for any increase in
the interest rate thereon. The Old Securities provide that, if the Exchange
Offer is not consummated within 35 days of the date hereof or, in certain
limited circumstances, if a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Old Capital
Securities is not declared effective on or prior to July 15, 1997, or under
certain other circumstances, then interest will accrue (in addition to the
stated interest rate on the New Junior Subordinated Debentures) at the rate of
0.25% per annum on the principal amount of the Old Junior Subordinated
Debentures and Distributions will accrue (in addition to the stated
Distribution rate on the Old Capital Securities) at the rate of 0.25% per
annum on the Liquidation Amount of the Old Capital Securities, for the period
from such dates until such time as the Exchange Offer is consummated or any
required Shelf Registration Statement is effective. The New Securities are
not, and upon consummation of the Exchange Offer the Old Securities will not
be, entitled to any such additional interest or Distributions. Accordingly,
holders of Old Capital Securities should review the information set forth
under "Risk Factors--Consequences of a Failure to Exchange Old Capital
Securities" and "Description of New Securities."
62
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of New Capital
Securities. This summary only addresses the tax consequences to a person that
acquires New Capital Securities on their original issue at their original
offering price and that is (i) an individual citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of
the United States or any state thereof or the District of Columbia or (iii) an
estate or trust the income of which is subject to United States federal income
tax regardless of source (a "United States Person"). This summary does not
address all tax consequences that may be applicable to a United States Person
that is a beneficial owner of New Capital Securities, nor does it address the
tax consequences to (i) persons that are not United States Persons, (ii)
persons that may be subject to special treatment under United States federal
income tax law, such as banks, insurance companies, thrift institutions,
regulated investment companies, real estate investment trusts, tax-exempt
organizations and dealers in securities or currencies, (iii) persons that will
hold New Capital Securities as part of a position in a "straddle" or as part
of a "hedging," "conversion" or other integrated investment transaction for
United States federal income tax purposes, (iv) persons whose functional
currency is not the United States dollar or (v) persons that do not hold New
Capital Securities as capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Sullivan & Cromwell, counsel to the Corporation and
the Issuer Trust. This summary is based upon the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations, Internal Revenue Service
("IRS") rulings and pronouncements and judicial decisions now in effect, all
of which are subject to change at any time. Such changes may be applied
retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a beneficial owner of New Capital Securities. In particular,
legislation has been proposed that could adversely affect the Corporation's
ability to deduct interest on the New Junior Subordinated Debentures, which
may in turn permit the Corporation to shorten the Stated Maturity of the New
Junior Subordinated Debentures to a date not earlier than January 15, 2017 or
to cause a redemption of the New Capital Securities prior to January 15, 2007.
See "--Possible Tax Law Changes." The authorities on which this summary is
based are subject to various interpretations, and it is therefore possible
that the United States federal income tax treatment of the purchase, ownership
and disposition of New Capital Securities may differ from the treatment
described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NEW
CAPITAL SECURITIES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX
LAWS.
CLASSIFICATION OF THE NEW JUNIOR SUBORDINATED DEBENTURES AND THE ISSUER TRUST
Under current law and assuming compliance with the terms of the New Trust
Agreement, the Issuer Trust will not be taxable as a corporation for United
States federal income tax purposes. As a result, each beneficial owner of New
Capital Securities (a "Securityholder") will be required to include in its
gross income its pro rata share of the interest income, including original
issue discount ("OID"), paid or accrued with respect to the New Junior
Subordinated Debentures whether or not cash is actually distributed to the
Securityholders. See "--Interest Income and Original Issue Discount." The New
Junior Subordinated Debentures will be classified as indebtedness of the
Corporation for United States federal income tax purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations applicable to debt instruments
issued on or after August 13, 1996 (the "Regulations"), a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with OID. The Corporation believes that
the likelihood of its exercising its option to defer payments of interest is
remote. Based on the foregoing, the Corporation believes
63
<PAGE>
that the New Junior Subordinated Debentures will not be considered to be
issued with OID at the time of their original issuance and, accordingly, a
Securityholder should include in gross income such Securityholder's allocable
share of interest on the New Junior Subordinated Debentures in accordance with
such Securityholder's method of tax accounting. Because the discount at which
the Old Junior Subordinated Debentures were issued was less than 1/4 of 1
percent of the Old Junior Subordinated Debentures' and New Junior Subordinated
Debentures' stated redemption price at maturity times the number of complete
years to maturity of the Old Junior Subordinated Debentures and New Junior
Subordinated Debentures, such discount will constitute de minimis OID and will
not be required to be taken into account on a current basis. The following
discussion assumes that unless and until the Corporation exercises its option
to defer interest on the New Junior Subordinated Debentures, the New Junior
Subordinated Debentures will not be treated as issued with OID other than de
minimis OID.
Under the Regulations, if the Corporation exercised its option to defer any
payment of interest, the New Junior Subordinated Debentures would at that time
be treated as issued with OID, and all stated interest on the New Junior
Subordinated Debentures and de minimis OID would thereafter be treated as OID
as long as the New Junior Subordinated Debentures remained outstanding. In
such event, all of a Securityholder's taxable interest income with respect to
the New Junior Subordinated Debentures would be accounted for as OID on an
economic accrual basis regardless of such Securityholder's method of tax
accounting, and actual distributions of stated interest would not be reported
as taxable income. Consequently, a Securityholder would be required to include
in gross income OID even though the Corporation would not make any actual cash
payments during an Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation herein.
Because income on the New Capital Securities will constitute interest or
OID, corporate Securityholders will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the New
Capital Securities.
Subsequent uses of the term "interest" in this summary include income in the
form of OID.
DISTRIBUTION OF NEW JUNIOR SUBORDINATED DEBENTURES TO SECURITYHOLDERS
Under current law, a distribution by the Issuer Trust of the New Junior
Subordinated Debentures as described under the caption "Description of New
Securities--Description of New Capital Securities--Liquidation Distribution
Upon Dissolution" will be non-taxable and will result in the Securityholder
receiving directly his or her pro rata share of the New Junior Subordinated
Debentures previously held indirectly through the Issuer Trust, with a holding
period and aggregate tax basis equal to the holding period and aggregate tax
basis such Securityholder had in its New Capital Securities before such
distribution. If, however, the liquidation of the Issuer Trust were to occur
because the Issuer Trust is subject to United States federal income tax with
respect to income accrued or received on the New Junior Subordinated
Debentures, the distribution of New Junior Subordinated Debentures to
Securityholders by the Issuer Trust would be a taxable event to the Issuer
Trust and each Securityholder, and each Securityholder would recognize gain or
loss as if the Securityholder had exchanged its New Capital Securities for the
New Junior Subordinated Debentures it received upon the liquidation of the
Issuer Trust. A Securityholder will include interest in respect of New Junior
Subordinated Debentures received from the Issuer Trust in the manner described
above under "--Interest Income and Original Issue Discount."
SALES OR REDEMPTIONS OF NEW CAPITAL SECURITIES
A Securityholder that sells (including a redemption for cash) New Capital
Securities will recognize gain or loss equal to the difference between its
adjusted tax basis in the New Capital Securities and the amount realized on
the sale of such New Capital Securities. Assuming that the Corporation does
not exercise its option to defer payment of interest on the New Junior
Subordinated Debentures, a Securityholder's adjusted tax basis in the New
64
<PAGE>
Capital Securities generally will be its initial purchase price. If the New
Junior Subordinated Debentures are deemed to be issued with OID as a result of
the Corporation's deferral of any interest payment, a Securityholder's
adjusted tax basis in the New Capital Securities generally will be its initial
purchase price, increased by OID previously included in such Securityholder's
gross income to the date of disposition and decreased by distributions or
other payments received on the New Capital Securities since and including the
date of the first Extension Period. Such gain or loss generally will be a
capital gain or loss (except to the extent any amount realized is treated as a
payment of accrued interest with respect to such Securityholder's pro rata
share of the New Junior Subordinated Debentures required to be included in
income) and generally will be a long-term capital gain or loss if the New
Capital Securities have been held for more than one year.
Should the Corporation exercise its option to defer any payment of interest
on the New Junior Subordinated Debentures, the New Capital Securities may
trade at a price that does not accurately reflect the value of accrued but
unpaid interest with respect to the underlying New Junior Subordinated
Debentures. In the event of such a deferral, a Securityholder who disposes of
its New Capital Securities between record dates for payments of distributions
thereon will be required to include in income as ordinary income accrued but
unpaid interest on the New Junior Subordinated Debentures to the date of
disposition as OID, but may not receive the cash related thereto. However,
such Securityholder will add such amount to its adjusted tax basis in the New
Capital Securities. To the extent the selling price is less than the
Securityholder's adjusted tax basis, such Securityholder will recognize a
capital loss. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax
purposes.
Although the matter is not free from doubt, an exchange of New Capital
Securities for Old Capital Securities (as defined below) should not be taxable
to beneficial owners of the Old Capital Securities.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest income paid or accrued on the New Capital Securities
held of record by United States Persons (other than corporations and other
exempt Securityholders) will be reported to the IRS. "Backup" withholding at a
rate of 31% will apply to payments of interest to non-exempt United States
Persons unless the Securityholder furnishes its taxpayer identification number
in the manner prescribed in applicable Treasury regulations, certifies that
such number is correct, certifies as to no loss of exemption from backup
withholding and meets certain other conditions.
Payment of the proceeds from the disposition of New Capital Securities to or
through the United States office of a broker is subject to information
reporting and backup withholding unless the Securityholder establishes an
exemption from information reporting and backup withholding.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information
is furnished to the IRS.
It is anticipated that income on the New Capital Securities will be reported
to Securityholders on Form 1099 and mailed to Securityholders by January 31
following each calendar year.
POSSIBLE TAX LAW CHANGES
On February 6, 1997, the Budget Proposal was released. If enacted, the
Budget Proposal would generally deny interest deductions for interest on an
instrument issued by a corporation that has a maximum term of more than 15
years and that is not shown as indebtedness on the separate balance sheet of
the issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. The above-described provision of the Budget Proposal is
proposed to be effective generally for instruments issued on or after the date
of first Congressional committee action. If this provision were to apply to
the New Junior
65
<PAGE>
Subordinated Debentures, the Corporation would be unable to deduct interest on
the New Junior Subordinated Debentures. Under current law, the Corporation
will be able to deduct interest on the New Junior Subordinated Debentures.
There can be no assurance, however, that current or future legislative
proposals or final legislation will not affect the ability of the Corporation
to deduct interest on the New Junior Subordinated Debentures. Such a change
could give rise to a Tax Event, which may permit the Corporation, if certain
conditions are met, shorten the maturity of the New Junior Subordinated
Debentures to a date not earlier than January 15, 2017 or to cause a
redemption of the New Capital Securities before January 15, 2007, as described
more fully in this Prospectus under "Description of New Securities--
Description of New Junior Subordinated Debentures--Redemption," "Description
of New Securities--Description of New Capital Securities--Redemption" and
"Description of New Securities--Description of New Junior Subordinated
Debentures--Conditional Right to Shorten Maturity or Redeem Upon a Tax Event,
Investment Company Event or Capital Treatment Event."
It is unclear whether an exercise by the Corporation of its right to shorten
the maturity of the New Junior Subordinated Debentures following a Tax Event
would be a taxable event to Securityholders.
66
<PAGE>
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an
investment in the New Capital Securities. Accordingly, among other factors,
the fiduciary should consider whether the investment would satisfy the
prudence and diversification requirements of ERISA and would be consistent
with the documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or
"disqualified persons" under the Code ("Parties in Interest") with respect to
such Plan. A violation of these "prohibited transaction" rules may result in
an excise tax or other liabilities under ERISA and/or Section 4975 of the Code
for such persons, unless exemptive relief is available under an applicable
statutory or administrative exemption. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church
plans (as defined in Section 3(33) of ERISA) or foreign plans (as described in
Section 4(b)(5) of ERISA) are not subject to the requirements of ERISA or
Section 4975 of the Code; governmental plans may be subject to similar
provisions under applicable state laws.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Issuer Trust would be
deemed to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of
the Code if "plan assets" of the Plan were used to acquire an equity interest
in the Issuer Trust and no exceptions were applicable under the Plan Assets
Regulation. An "equity interest" is defined under the Plan Assets Regulation
as any interest in an entity other than an instrument that is treated as
indebtedness under applicable local law and that has no substantial equity
features, and specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the assets
of the Issuer Trust would not be deemed to be "plan assets" of investing Plans
if, immediately after the most recent acquisition of any equity interest in
the Issuer Trust, less than 25% of the value of each class of equity interests
in the Issuer Trust were held by Plans, other employee benefit plans not
subject to ERISA or Section 4975 of the Code (such as governmental, church and
foreign plans), and entities holding assets deemed to be "plan assets" of any
Plan (collectively, "Benefit Plan Investors"), or if the New Capital
Securities were "publicly-offered securities" for purposes of the Plan Assets
Regulation. No assurance can be given that the value of the New Capital
Securities held by Benefit Plan Investors will be less than 25% of the total
value of such New Capital Securities at the completion of the initial offering
or thereafter, and no monitoring or other measures will be taken with respect
to the satisfaction of the conditions to this exception. Furthermore, it is
not anticipated that the New Capital Securities would be considered to be
"publicly-offered securities" under the Plan Assets Regulation. All of the New
Common Securities will be purchased and initially held by the Corporation.
Certain transactions involving the Issuer Trust and/or the New Capital
Securities and the New Junior Subordinated Debentures could be deemed to
constitute direct or indirect prohibited transactions under ERISA and Section
4975 of the Code with respect to a Plan if the New Capital Securities were
acquired with "plan assets" of such Plan and the assets of the Issuer Trust
were deemed to be "plan assets" of Plans investing in the Issuer Trust. For
example, if the Corporation is a Party in Interest with respect to an
investing Plan (either directly or by reason of its ownership of Bankers or
other subsidiaries), extensions of credit between the Corporation and the
Issuer Trust (as represented by the New Junior Subordinated Debentures and the
New Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA and
Section 4975(c)(1)(B) of the Code, unless exemptive relief were available
under an applicable administrative exemption, as discussed below. In addition,
if the Corporation were considered to be a fiduciary with respect to the
Issuer Trust as a result of certain powers it holds (such as the powers to
remove and replace the Property Trustee and the Administrative Trustees), the
optional redemption or acceleration of the New Junior Subordinated Debentures
could be considered to be
67
<PAGE>
prohibited transactions under Section 406(b) of ERISA and Section
4975(c)(1)(E) of the Code. In order to avoid such prohibited transactions,
each investing Plan, by purchasing the New Capital Securities, will be deemed
to have directed the Issuer Trust to invest in the New Junior Subordinated
Debentures and to have appointed the Property Trustee.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief if required for direct or indirect
prohibited transactions that may arise from the purchase or holding of the New
Capital Securities if assets of the Issuer Trust were deemed to be "plan
assets" of Plans investing in the Issuer Trust as described above. Those class
exemptions are PTCE 96-23 (for certain transactions determined by in-house
asset managers), PTCE 95-60 (for certain transactions involving insurance
company general accounts), PTCE 91-38 (for certain transactions involving bank
collective investment funds), PTCE 90-1 (for certain transactions involving
insurance company separate accounts), and PTCE 84-14 (for certain transactions
determined by independent qualified professional asset managers).
Because the New Capital Securities may be deemed to be equity interests in
the Issuer Trust for purposes of applying ERISA and Section 4975 of the Code,
the New Capital Securities may not be purchased and should not be held by any
Plan, any entity whose underlying assets include "plan assets" by reason of
any Plan's investment in the entity (a "Plan Asset Entity") or any person
investing "plan assets" of any Plan, unless such purchaser or holder is
eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38,
90-1 or 84-14. Any purchaser or holder of the New Capital Securities or any
interest therein will be deemed to have represented by its purchase and
holding thereof that it either (a) is not a Plan or a Plan Asset Entity and is
not purchasing such securities on behalf of or with "plan assets" of any Plan
or (b) is eligible for the exemptive relief available under PTCE 96-23, 95-60,
91-38, 90-1 or 84-14.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries or other persons considering
purchasing the New Capital Securities on behalf of or with "plan assets" of
any Plan consult with their counsel regarding the potential consequences if
the assets of the Issuer Trust were deemed to be "plan assets" and the
availability of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-
14.
68
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own account
in connection with the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. This
Prospectus may be used by Participating Broker-Dealers during the period
referred to below in connection with resales of New Capital Securities
received in exchange for Old Capital Securities if such Old Capital Securities
were acquired by such Participating Broker-Dealers for their own accounts as a
result of market-making activities or other trading activities. The Issuer
Trust has agreed that this Prospectus may be used by a Participating Broker-
Dealer in connection with resales of such New Capital Securities for a period
ending 90 days after the Expiration Date (subject to extension under certain
limited circumstances described herein) or, if earlier, when all such New
Capital Securities have been disposed of by such Participating Broker-Dealer.
See "The Exchange Offer--Resales of New Capital Securities." The Issuer Trust
will not receive any proceeds from the issuance of the New Capital Securities
offered hereby. New Capital Securities received by broker-dealers for their
own accounts in connection with the Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Capital Securities or
a combination of such methods of resale, at market prices prevailing at the
time of resale at prices related to such prevailing market prices or at
negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers
of any such New Capital Securities. Any broker-dealer that resells New Capital
Securities that were received by it for its own account in connection with the
Exchange Offer and any broker or dealer that participates in a distribution of
such New Capital Securities may be deemed to be an "underwriter" within the
meaning of the Securities Act, and any profit on any such resale of New
Capital Securities and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus may be used by BT Securities Corporation, a wholly owned
subsidiary of the Corporation and an affiliate of the Issuer Trust, in
connection with offers and sales related to market-making transactions in New
Securities effected from time to time after the commencement of the Exchange
Offer. BT Securities Corporation may act as principal or agent in such
transactions, including as agent for the counterparty when acting as principal
or as agent for both counterparties, and may receive compensation in the form
of discounts and commissions, including from both counterparties when it acts
as agent for both. Such sales will be made at prevailing market prices at the
time of sale, at prices related thereto or at negotiated prices.
The Corporation may agree to indemnify BT Securities Corporation with
respect to certain liabilities in connection with this Prospectus, including
liabilities under the Securities Act.
Because the National Association of Securities Dealers, Inc. (the "NASD") is
expected to view the New Capital Securities as interests in a direct
participation program, any offering of the New Capital Securities by any NASD
member using this Prospectus will be made in compliance with Rule 2810 of the
NASD's Conduct Rules. In addition, no NASD member may execute any transaction
in New Capital Securities in a discretionary account without the prior written
approval of the transaction by the customer.
69
<PAGE>
VALIDITY OF NEW SECURITIES
Certain matters of Delaware law relating to the validity of the New Capital
Securities, the enforceability of the New Trust Agreement and the creation of
the Issuer Trust will be passed upon by Richards, Layton & Finger, special
Delaware counsel to the Corporation and the Issuer Trust. The validity of the
New Guarantee and the New Junior Subordinated Debentures will be passed upon
for the Corporation by Sullivan & Cromwell, New York, New York. Certain
matters relating to United States federal income tax considerations will be
passed upon for the Corporation by Sullivan & Cromwell. Richards, Layton &
Finger is also serving as counsel to Wilmington Trust Company, in its various
capacities, in connection with the Exchange Offer and the issuance of the New
Capital Securities. Richards, Layton & Finger performs other services for the
Corporation and Wilmington Trust Company from time to time.
EXPERTS
The consolidated financial statements of the Corporation and subsidiaries
for the year ended December 31, 1996, appearing in the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1996, and incorporated by
reference into this Prospectus, 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 accounting and auditing.
70
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the By-Laws of Bankers Trust New York Corporation provides as
follows:
Section 5.01 The corporation shall, to the fullest extent permitted by
Section 721 of the New York Business Corporation Law, indemnify any person who
is or was made, or threatened to be made, a party to an action or proceeding,
whether civil or criminal, whether involving any actual or alleged breach of
duty, neglect or error, any accountability, or any actual or alleged
misstatement, misleading statement or other act or omission and whether
brought or threatened in any court or administrative or legislative body or
agency, including an action by or in the right of the corporation to procure a
judgment in its favor and an action by or in the right of any other
corporation of any type or kind, domestic or foreign, or any partnership,
joint venture, trust, employee benefit plan or other enterprise, which any
director or officer of the corporation is serving or served in any capacity at
the request of the corporation by reason of the fact that he, his testator or
intestate, is or was a director or officer of the corporation, or is serving
or served such other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise in any capacity, against judgments, fines,
amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
Section 5.02 The corporation may indemnify any other person to whom the
corporation is permitted to provide indemnification or the advancement of
expenses by applicable law, whether pursuant to rights granted pursuant to, or
provided by, the New York Business Corporation Law or other rights created by
(i) a resolution of shareholders, (ii) a resolution of directors, or (iii) an
agreement providing for such indemnification, it being expressly intended that
these By-Laws authorize the creation of other rights in any such manner.
Section 5.03 The corporation shall, from time to time, reimburse or advance
to any person referred to in Section 5.01 the funds necessary for payment of
expenses, including attorneys' fees, incurred in connection with any action or
proceeding referred to in Section 5.01, upon receipt of a written undertaking
by or on behalf of such person to repay such amount(s) if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
Section 5.04 Any director or officer of the corporation serving (i) another
corporation, of which a majority of the shares entitled to vote in the
election of its directors is held by the corporation, or (ii) any employee
benefit plan of the corporation or any corporation referred to in clause (i),
in any capacity shall be deemed to be doing so at the request of the
corporation. In all other cases, the provisions of this Article V will apply
(i) only if the person serving another corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise so served at the
specific request of the corporation, evidenced by a written communication
signed by the Chairman of the Board, the Chief Executive Officer, the
President, the Senior Vice Chairman or any Vice Chairman, and (ii) only if and
to the extent that, after making such efforts as the Chairman of the Board,
the Chief Executive Officer, or the President shall deem adequate in the
circumstances, such person shall be unable to obtain indemnification from such
other enterprise or its insurer.
Section 5.05 Any person entitled to be indemnified or to the reimbursement
or advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of the
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect
at the time indemnification is sought.
II-1
<PAGE>
Section 5.06 The right to be indemnified or to the reimbursement or
advancement of expenses pursuant to this Article V (i) is a contract right
pursuant to which the person entitled thereto may bring suit as if the
provisions hereof were set forth in a separate written contract between the
corporation and the director or officer, (ii) is intended to be retroactive
and shall be available with respect to events occurring prior to the adoption
hereof, and (iii) shall continue to exist after the rescission or restrictive
modification hereof with respect to events occurring prior thereto.
Section 5.07 If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the corporation
within thirty days after a written claim has been received by the corporation,
the claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled also to be paid the expenses of prosecuting
such claim. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
or reimbursement or advancement of expenses to the claimant is proper in the
circumstances, nor an actual determination by the corporation (including its
Board of Directors, independent legal counsel, or its shareholders) that the
claimant is not entitled to indemnification or to the reimbursement or
advancement of expenses, shall be a defense to the action or create a
presumption that the claimant is not so entitled.
Section 5.08 A person who has been successful, on the merits or otherwise,
in the defense of a civil or criminal action or proceeding of the character
described in Section 5.01 shall be entitled to indemnification only as
provided in Section 5.01 and 5.03, notwithstanding any provision of the New
York Business Corporation Law to the contrary.
With certain limitations, Sections 721 through 726 of the New York Business
Corporation Law permit a corporation to indemnify a director or officer made a
party to an action (i) by a corporation or in its right in order to procure a
judgment in its favor unless he shall have breached his duties, or (ii) other
than an action by or in the right of the corporation in order to procure a
judgment in its favor if such director or officer acted in good faith and in a
manner he reasonably believed to be in or, in certain cases, not opposed to
such corporation's best interests, and additionally, in criminal actions, has
no reasonable cause to believe his conduct was unlawful.
In addition, a Directors and Officer Liability and Corporation Reimbursement
Policy is maintained covering the Corporation and its directors and officers
for amounts, subject to policy limits, that the Corporation might be required
to pay by way of indemnification to its directors or officers under its By-
Laws or otherwise and for the protection of individual directors and officers
from loss for which they might not be indemnified by the Corporation.
Under the Amended and Restated Trust Agreement (Exhibit 4.5 to this
Registration Statement), Bankers Trust New York Corporation will agree to
indemnify each of the trustees of the Issuer Trust and any predecessor
trustees, and to hold such trustees harmless, against any loss, damage,
claims, liability or expense incurred without negligence or bad faith on their
part, arising out of or in connection with the acceptance or administration of
the Trust Agreement, including the costs and expenses of defense against any
claim or liability in connection with the exercise or performance of any of
their powers or duties under the Trust Agreement.
II-2
<PAGE>
ITEM 21. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
***4.1 --Junior Subordinated Indenture, dated as of February 5, 1997, between Bankers
Trust New York Corporation and Wilmington Trust Company, as Trustee.
***4.2 --Form of 7.90% Junior Subordinated Deferrable Interest Debenture, Series B1.
***4.3 --Certificate of Trust of BT Capital Trust B.
***4.4 --Trust Agreement of BT Capital Trust B.
***4.5 --Form of Amended and Restated Trust Agreement of BT Capital Trust B.
***4.6 --Form of New Capital Security Certificate for BT Capital Trust B (included as
Exhibit E of Exhibit 4.5).
***4.7 --Form of New Guarantee Agreement.
***4.8 --Exchange and Registration Rights Agreement, dated as of January 16, 1997, among
the Corporation, the Old Issuer Trust and the Initial Purchaser.
5.1 --Opinion of Sullivan & Cromwell as to the legality of the New Junior Subordinated
Debentures and the New Guarantee.
5.2 --Opinion of Richards, Layton & Finger as to the legality of the New Capital
Securities.
8.1 --Opinion of Sullivan & Cromwell as to certain federal income tax matters.
***12.1 --Computation of Consolidated Ratios of Earnings to Fixed Charges.
***12.2 --Computation of Consolidated Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements.
23.1 --Consent of Ernst & Young LLP.
23.2 --Consent of Sullivan & Cromwell (contained in the opinion filed as Exhibit 5.1 to
this Registration Statement).
23.3 --Consent of Richards, Layton & Finger (contained in the opinion filed as Exhibit
5.2 to this Registration Statement).
23.4 --Consent of Sullivan & Cromwell (contained in the opinion filed as Exhibit 8.1 to
this Registration Statement).
***24.1 --Powers of Attorney.
***25.1 --Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Wilmington Trust Company to act as trustee under the New Junior Subordinated
Indenture.
***25.2 --Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Wilmington Trust Company to act as trustee under the Amended and Restated Trust
Agreement of BT Capital Trust B.
***25.3 --Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Wilmington Trust Company to act as trustee under the New Guarantee.
***99.1 --Form of Letter of Transmittal and instructions thereto.
***99.2 --Form of Notice of Guaranteed Delivery.
</TABLE>
- --------
*To be filed by amendment.
**Incorporated by reference.
*** Previously filed.
II-3
<PAGE>
ITEM 22. UNDERTAKINGS.
Each of the undersigned registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of a
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of a
registrant pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, each registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
Each of the undersigned registrants hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11 or 13 of this form within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
Each of the undersigned registrants hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON THE
17TH DAY OF MARCH, 1997.
Bankers Trust New York Corporation
/s/ Duncan P. Hennes
By: _________________________________
(DUNCAN P. HENNES) SENIOR VICE
PRESIDENT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES
INDICATED:
SIGNATURE TITLE DATE
Frank N. Newman* Chairman of the
- ------------------------------------- Board, Chief March 17, 1997
(FRANK N. NEWMAN) Executive Officer
and Director
(Principal
Executive Officer)
Richard H. Daniel* Executive Vice
- ------------------------------------- President and Chief March 17, 1997
(RICHARD H. DANIEL) Financial Officer
and Controller
(Principal
Financial Officer)
Geoffrey M. Fletcher* Senior Vice
- ------------------------------------- President March 17, 1997
(GEOFFREY M. FLETCHER) (Principal
Accounting Officer)
George B. Beitzel* Director
- ------------------------------------- March 17, 1997
(GEORGE B. BEITZEL)
Philip A. Griffiths* Director
- ------------------------------------- March 17, 1997
(PHILIP A. GRIFFITHS)
William R. Howell* Director
- ------------------------------------- March 17, 1997
(WILLIAM R. HOWELL)
Jon M. Huntsman* Director
- ------------------------------------- March 17, 1997
(JON M. HUNTSMAN)
II-5
<PAGE>
SIGNATURE TITLE DATE
Vernon E. Jordan, Jr.* Director
- ------------------------------------- March 17, 1997
(VERNON E. JORDAN, JR.)
Hamish Maxwell* Director
- ------------------------------------- March 17, 1997
(HAMISH MAXWELL)
N.J. Nicholas Jr.* Director
- ------------------------------------- March 17, 1997
(N.J. NICHOLAS JR.)
Russell E. Palmer* Director
- ------------------------------------- March 17, 1997
(RUSSELL E. PALMER)
Donald L. Staheli* Director
- ------------------------------------- March 17, 1997
(DONALD L. STAHELI)
Patricia C. Stewart* Director
- ------------------------------------- March 17, 1997
(PATRICIA C. STEWART)
Director
- ------------------------------------- March 17, 1997
(GEORGE J. VOJTA)
Paul A. Volcker* Director
- ------------------------------------- March 17, 1997
(PAUL A. VOLCKER)
/s/ Duncan P. Hennes
*By _________________________________
(DUNCAN P. HENNES, ATTORNEY-IN-FACT)
II-6
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK ON THE
17TH DAY OF MARCH, 1997.
BT Capital Trust B
By: Bankers Trust New York
Corporation,
as Depositor
/s/ Duncan P. Hennes
By: _________________________________
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
***4.1 --Junior Subordinated Indenture, dated as of February 5, 1997, between Bankers
Trust New York Corporation and Wilmington Trust Company, as Trustee.
***4.2 --Form of 7.90% Junior Subordinated Deferrable Interest Debenture, Series B1.
***4.3 --Certificate of Trust of BT Capital Trust B.
***4.4 --Trust Agreement of BT Capital Trust B.
***4.5 --Form of Amended and Restated Trust Agreement of BT Capital Trust B.
***4.6 --Form of New Capital Security Certificate for BT Capital Trust B (included as
Exhibit E of Exhibit 4.5).
***4.7 --Form of New Guarantee Agreement.
***4.8 --Exchange and Registration Rights Agreement, dated as of January 16, 1997, among
the Corporation, the Old Issuer Trust and the Initial Purchaser.
5.1 --Opinion of Sullivan & Cromwell as to the legality of the New Junior Subordinated
Debentures and the New Guarantee.
5.2 --Opinion of Richards, Layton & Finger as to the legality of the New Capital
Securities.
8.1 --Opinion of Sullivan & Cromwell as to certain federal income tax matters.
***12.1 --Computation of Consolidated Ratios of Earnings to Fixed Charges.
***12.2 --Computation of Consolidated Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements.
23.1 --Consent of Ernst & Young LLP.
23.2 --Consent of Sullivan & Cromwell (contained in the opinion filed as Exhibit 5.1 to
this Registration Statement).
23.3 --Consent of Richards, Layton & Finger (contained in the opinion filed as Exhibit
5.2 to this Registration Statement).
23.4 --Consent of Sullivan & Cromwell (contained in the opinion filed as Exhibit 8.1 to
this Registration Statement).
***24.1 --Powers of Attorney.
***25.1 --Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Wilmington Trust Company to act as trustee under the New Junior Subordinated
Indenture.
***25.2 --Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Wilmington Trust Company to act as trustee under the Amended and Restated Trust
Agreement of BT Capital Trust B.
***25.3 --Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Wilmington Trust Company to act as trustee under the New Guarantee.
***99.1 --Form of Letter of Transmittal and instructions thereto.
***99.2 --Form of Notice of Guaranteed Delivery.
</TABLE>
- --------
*To be filed by amendment.
**Incorporated by reference.
*** Previously filed.
<PAGE>
EXHIBIT 5.1
March 12, 1997
Bankers Trust New York Corporation,
130 Liberty Street,
One Bankers Trust Plaza,
New York, New York 10006.
BT Capital Trust B,
c/o Bankers Trust New York Corporation,
130 Liberty Street,
One Bankers Trust Plaza,
New York, New York 10006.
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933
(the "Act") of $250,000,000 aggregate principal amount of 7.90% Junior
Subordinated Deferrable Interest Debentures, Series B1 (the "Junior Subordinated
Debentures") of Bankers Trust New York Corporation, a New York corporation (the
"Corporation"), $250,000,000 aggregate liquidation amount of 7.90% Capital
Securities, Series B1 (the "Capital Securities") to be issued by BT Capital
Trust B, a statutory business trust created under the laws of the State of
Delaware (the "Issuer Trust"), and the Guarantee with respect to the Capital
Securities (the "Guarantee") to be executed and delivered by the Corporation for
the benefit of the holders from time to time of the Capital Securities,
<PAGE>
Bankers Trust New York Corporation
BT Capital Trust B
we, as your special counsel, have examined such corporate records, certificates
and other documents, and such questions of law, as we have considered necessary
or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion:
(i) When the Registration Statement relating to the Junior
Subordinated Debentures, the Capital Securities and the Guarantee (the
"Registration Statement") has become effective under the Act, the terms of
the Junior Subordinated Debentures and of their issuance and sale have been
duly established in conformity with the Indenture relating to the Junior
Subordinated Debentures (the "Junior Subordinated Indenture") so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Corporation, and the Junior Subordinated
Debentures have been duly executed and authenticated in accordance with the
Junior Subordinated Indenture and issued and delivered as contemplated in
the Registration Statement, the Junior Subordinated Debentures will
-2-
<PAGE>
Bankers Trust New York Corporation
BT Capital Trust B
constitute valid and legally binding obligations of the Corporation,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(ii) When the Registration Statement has become effective under the
Act, the Guarantee has been duly executed and delivered, the Capital
Securities have been duly executed in accordance with the Amended and
Restated Trust Agreement of the Issuer Trust (the "Trust Agreement") and
issued and delivered as contemplated in the Registration Statement, the
terms of the Guarantee and of its issuance and delivery have been duly
established so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Corporation
and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the Corporation, and
the terms of the Capital Securities and of their issuance and delivery have
been duly established in conformity with the Trust Agreement so as not to
violate any applicable law or result in a default under or breach of any
-3-
<PAGE>
Bankers Trust New York Corporation
BT Capital Trust B
agreement or instrument binding upon the Issuer Trust and so as to comply
with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Issuer Trust, the Guarantee will
constitute a valid and legally binding obligation of the Corporation,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
We have relied as to certain matters on information obtained from
public officials, officers of the Corporation and the Issuer Trust and other
sources believed by us to be responsible, and we have assumed that the Junior
Subordinated Indenture has been duly authorized, executed and delivered by the
Trustee thereunder, an assumption which we have not independently verified.
-4-
<PAGE>
Bankers Trust New York Corporation
BT Capital Trust B
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of New Securities" in the Prospectus. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
/s/ Sullivan & Cromwell
-5-
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
March 12, 1997
BT Capital Trust B
c/o Bankers Trust New York Corporation
130 Liberty Street
New York, New York 10006
Re: BT Capital Trust B
------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Bankers Trust New York
Corporation, a New York corporation (the "Company"), and BT Capital Trust B, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of February 28,
1997 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on February 28, 1997;
(b) The Trust Agreement of the Trust, dated as of February 28, 1997,
between the Company and the trustee of the Trust named therein;
<PAGE>
BT Capital Trust B
March 12, 1997
Page 2
(c) The registration statement (the "Initial Registration Statement")
on Form S-4 (Registration No. 333-22733), filed by the Company and the Trust
with the Securities and Exchange Commission (the "SEC") on March 4, 1997, as
amended by Amendment No. 1 to the Initial Registration Statement, including a
related preliminary prospectus (the "Prospectus"), relating to the Capital
Securities of the Trust representing preferred undivided beneficial interests in
the assets of the Trust (each, a "Capital Security" and collectively, the
"Capital Securities"), as proposed to be filed by the Company and the Trust with
the SEC on or about March 12, 1997 ("Amendment No. 1") (the Initial Registration
Statement, as amended by Amendment No. 1, being hereinafter referred to as
the "Registration Statement");
(d) A form of Amended and Restated Trust Agreement of the Trust (the
"Trust Agreement"), among the Company, as depositor, the trustees of the Trust
named therein and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust, including Exhibits C and E attached
thereto; and
(e) A Certificate of Good Standing for the Trust, dated March 3, 1997,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to
<PAGE>
BT Capital Trust B
March 12, 1997
Page 3
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Capital
Security is to be issued by the Trust (collectively, the "Capital Security
Holders") of a Capital Securities Certificate and the payment for the Capital
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Capital Securities are issued and
sold to the Capital Security Holders in accordance with the Trust Agreement and
the Registration Statement. We have not participated in the preparation of the
Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
-------
(S) 3801, et seq.
-- ---
2. When issued and sold, the Capital Securities will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Capital Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the SEC as an exhibit to
the Registration Statement. In addition, we hereby consent to the use of our
name under the heading "Validity of New Securities" in the Prospectus. In
giving the foregoing consents, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the SEC thereunder.
Except as stated above, without our prior written
<PAGE>
BT Capital Trust B
March 12, 1997
Page 4
consent, this opinion may not be furnished or quoted to, or relied upon by, any
other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
MIL/DAF/MM/kth
<PAGE>
EXHIBIT 8.1
March 12, 1997
Bankers Trust New York Corporation,
One Bankers Trust Plaza,
New York, New York 10006.
BT Capital Trust B,
c/o Bankers Trust New York Corporation,
One Bankers Trust Plaza,
New York, New York 10006.
Ladies and Gentlemen:
As special tax counsel to BT Capital Trust B, a statutory business
trust formed under the laws of Delaware (the "Issuer Trust"), and Bankers Trust
New York Corporation, a New York corporation, in connection with the issuance by
the Issuer Trust of the 7.90% Capital Securities, Series B1 (the "Capital
Securities"), and assuming that the operative documents for the Capital
Securities described in the Prospectus forming a part of the Registration
Statement to which this opinion is filed as an exhibit (the "Registration
Statement") will be performed in accordance with the terms described therein, we
hereby confirm to you our opinion as set forth under the heading "Certain
Federal Income Tax Consequences" in the Prospectus, subject to the limitations
set forth therein.
<PAGE>
Bankers Trust New York Corporation,
BT Capital Trust B
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to us under the heading "Certain
Federal Income Tax Consequences" in the Registration Statement. By giving the
foregoing consent, we do not admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Sullivan & Cromwell
-2-
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Pre-Effective Amendment No. 1 to the Registration Statement (Form S-4
Nos. 333-22733 and 333-22733-01) and related Prospectus of Bankers
Trust New York Corporation and BT Capital Trust B to offer to exchange
the 7.90% Capital Securities, Series B1 of BT Capital Trust B for the
outstanding 7.90% Capital Securities, Series A1 of BT Capital Trust A
and to the incorporation by reference therein of our report dated
January 23, 1997 except for Note 28, as to which date is March 6, 1997,
with respect to the consolidated financial statements of Bankers Trust
New York Corporation and Subsidiaries included in its Annual Report
(Form 10-K) for the year ended December 31, 1996, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
New York, New York
March 17, 1997
