Filed Pursuant to Rule 424(b)(2)
Registration No. 333-83503
[LOGO] BANK OF AMERICA
$1,000,000,000
6 1/4% Senior Notes, due 2012
This global prospectus supplement and the attached prospectus describe the
$1,000,000,000 Bank of America Corporation 6 1/4% Senior Notes, due 2012. We
will pay interest on the notes on April 15 and October 15 of each year with the
first interest payment on October 15, 2002. The notes mature on April 15, 2012
and normally are not redeemable prior to maturity.
The notes are unsecured and rank equally with all of our other senior
indebtedness. The notes are in denominations of $1,000.
We have applied to list the notes on the Luxembourg Stock Exchange in
accordance with the rules of the Luxembourg Stock Exchange. We do not intend to
list the notes on any other securities exchange.
- --------------------------------------------------------------------------------
Our notes are unsecured and are not savings accounts, deposits, or other
obligations of a bank. Our notes are not guaranteed by Bank of America, N.A. or
any other bank and are not insured by the Federal Deposit Insurance Corporation
or any other governmental agency.
None of the Securities and Exchange Commission, any state securities
commission, or the Luxembourg Stock Exchange has approved or disapproved of
these notes or passed upon the adequacy or accuracy of this global prospectus
supplement or the attached prospectus. Any representation to the contrary is a
criminal offense.
- --------------------------------------------------------------------------------
Per Note Total
-------- ------------
Public Offering Price..... 99.760% $997,600,000
Underwriting Discount..... .450% 4,500,000
------ ------------
Proceeds (Before Expenses) 99.310% $993,100,000
We will deliver the notes in book-entry only form through The Depository Trust
Company, Clearstream Banking, societe anonyme, and Euroclear Bank S.A./N.V., as
operator of the Euroclear System, on or about April 22, 2002, against payment
in immediately available funds. Purchasers will pay accrued interest from April
22, 2002 if settlement occurs after that date.
Sole Book Runner
Banc of America Securities LLC
Barclays Capital
Bear, Stearns & Co. Inc.
Credit Suisse First Boston
Goldman, Sachs & Co.
Guzman & Company
Lehman
Brothers
Merrill Lynch & Co.
RBC Capital Markets
Salomon Smith Barney
UBS Warburg
Utendahl Capital Partners, L.P.
-----------------
Global Prospectus Supplement to Prospectus dated August 5, 1999
April 17, 2002
TABLE OF CONTENTS
Global Prospectus Supplement Page
----
About this Global Prospectus
Supplement....................... S-3
Description of the Notes........... S-4
General........................... S-4
Payment of Additional Amounts..... S-4
Redemption for Tax Reasons........ S-7
Bank of America Corporation........ S-8
General........................... S-8
Business Segment Operations....... S-8
Acquisitions and Sales............ S-10
Recent Developments................ S-10
Capitalization..................... S-11
Ratios of Earnings to Fixed Charges S-11
Selected Financial Data............ S-12
Registration and Settlement........ S-13
Same Day Settlement and Payment... S-13
Payment of Principal and Interest. S-13
Book-Entry System................. S-13
Notices........................... S-13
Paying Agent, Security Registrar,
and Transfer Agent.............. S-14
Certain U.S. Federal Income Tax
Considerations................... S-14
United States Persons............. S-14
Non-United States Persons......... S-14
Backup Withholding and Information
Reporting....................... S-15
EU Directive on the Taxation of
Savings Income.................. S-16
Underwriting....................... S-17
Legal Opinions..................... S-18
Listing of the Notes and General
Information...................... S-19
Listing........................... S-19
Independent Accountants........... S-19
Authorization..................... S-19
Material Changes.................. S-19
Governing Law..................... S-19
Clearing Systems.................. S-19
Page
Prospectus ----
About this Prospectus................ 2
Bank of America Corporation.......... 3
General............................. 3
Business Segment Operations......... 3
Acquisitions and Sales.............. 4
Use of Proceeds...................... 4
Ratios of Earnings to Fixed Charges
and Ratios of Earnings to Fixed
Charges and Preferred Stock
Dividends.......................... 5
Regulatory Matters................... 6
General............................. 6
Interstate Banking.................. 6
Capital and Operational Requirements 6
Dividends........................... 8
Source of Strength.................. 8
Changes in Regulations.............. 8
Plan of Distribution................... 8
Description of Debt Securities......... 10
General............................... 10
Reopenings............................ 11
Conversion............................ 12
Exchange, Registration and Transfer... 12
Payment and Paying Agents............. 12
Subordination......................... 13
Sale or Issuance of Capital Stock of
Banks............................... 13
Waiver of Covenants................... 14
Modification of the Indentures........ 14
Meetings and Action by Securityholders 14
Defaults and Rights of Acceleration... 14
Collection of Indebtedness............ 15
Notices............................... 15
Concerning the Trustees............... 15
Warrants............................... 16
Description of Debt Warrants.......... 16
Description of Universal Warrants..... 16
Modification.......................... 17
Enforceability of Rights of
Warrantholders; Governing Law....... 17
Unsecured Obligations................. 17
Description of Units................... 18
Description of Preferred Stock......... 18
General............................... 18
The Preferred Stock................... 18
ESOP Preferred Stock.................. 19
Series B Preferred Stock.............. 21
Series BB Preferred Stock............. 21
Description of Depositary Shares....... 22
General............................... 22
Dividends and Other Distributions..... 23
Redemption of Depositary Shares....... 23
Voting the Preferred Stock............ 23
Amendment and Termination of the
Deposit Agreement................... 24
Changes of Depositary................. 24
Miscellaneous......................... 24
Resignation and Removal of Depositary. 24
Description of Common Stock............ 24
General............................... 24
Voting and Other Rights............... 25
Dividends............................. 25
Registration and Settlement............ 25
The Depository Trust Company.......... 25
Cedelbank and Euroclear............... 27
Where You Can Find More Information.... 30
Forward-Looking Statements............. 31
Legal Opinions......................... 31
Experts................................ 31
S-2
ABOUT THIS GLOBAL PROSPECTUS SUPPLEMENT
This global prospectus supplement describes the specific terms of the notes
and supplements the description of the debt securities included in the attached
prospectus. In making your evaluation of the notes, you should rely only on the
information included or incorporated by reference in this global prospectus
supplement and the attached prospectus. We have not authorized any other person
to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. If
information in this global prospectus supplement is inconsistent with the
attached prospectus, this global prospectus supplement supersedes the
information in the attached prospectus.
This global prospectus supplement and the attached prospectus do not
constitute an offer to sell or the solicitation of an offer to buy the notes in
any jurisdiction in which such offer or solicitation is unlawful. See
"Underwriting." The delivery of this global prospectus supplement, at any time,
does not create any implication that there has been no change in our affairs
since the date hereof or that the information contained in this global
prospectus supplement or the attached prospectus is correct as of any time
subsequent to such date.
This global prospectus supplement and the attached prospectus include
information provided in order to comply with the rules governing the listing of
the notes on the Luxembourg Stock Exchange. We are responsible for the accuracy
of the information contained or incorporated by reference in this global
prospectus supplement and the attached prospectus. We confirm, after reasonable
inquiry, that to the best of our knowledge and belief we have not omitted any
other fact that would make any statement contained or incorporated by reference
in this global prospectus supplement misleading in any material respect.
THE LUXEMBOURG STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF
THIS DOCUMENT, MAKES NO REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING
FROM OR IN RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS GLOBAL
PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS.
The distribution of this global prospectus supplement and the attached
prospectus and the offering of the notes in certain jurisdictions may be
restricted by law. If you possess this global prospectus supplement and the
attached prospectus, you should find out about and observe these restrictions.
References herein to "$" and "dollars" are to the currency of the United
States of America.
Capitalized terms used, but not defined, in this global prospectus
supplement are defined in the attached prospectus.
S-3
DESCRIPTION OF THE NOTES
General
You should read the following description of the 6 1/4% Senior Notes, due
2012 along with the "Description of Debt Securities" in the attached
prospectus. The notes are our direct unsecured obligations.
We will issue $1,000,000,000 of the notes as a single series of Senior Debt
Securities under the Senior Indenture. As of May 10, 2001, The Bank of New York
replaced U.S. Bank Trust National Association as Trustee under that indenture.
The Senior Indenture allows us to "reopen" or later increase the amount of
this series of notes without notice by selling additional notes with the same
terms. Those additional notes will be treated like the notes that we are
describing in this global prospectus supplement, except that any new notes may
begin to bear interest at a different date. We do not plan to inform existing
noteholders if we reopen this series of notes. However, if, at the time of a
reopening, this series of notes is listed on the Luxembourg Stock Exchange, we
will undertake to cause an application to list the additional notes to be
submitted to the Luxembourg Stock Exchange in accordance with its rules in
order to make the additional notes fungible with the existing notes of the
series.
The notes will begin to accrue interest on April 22, 2002, at an annual rate
of 6 1/4%. Interest will be payable semi-annually in arrears on the interest
payment dates shown below, commencing October 15, 2002. On each interest
payment date, we will make payments to those holders of the notes on the
designated record date.
Interest
Payment
Date Record Date
-------- ---------------------
October 15 Previous September 30
April 15 Previous March 31
If the maturity date or an interest payment date for the notes falls on a
day that is not a Business Day, that payment will be made on the next Business
Day as if it were the date that payment was due and no interest will accrue
from and after the original payment date. The term "Business Day" means any
weekday that is not a legal holiday in New York, New York, Charlotte, North
Carolina, or Luxembourg and is not a day on which banking institutions in those
cities are authorized or required by law or regulation to be closed. Initially,
we will make principal and interest payments at the office of the Trustee, 15
Broad Street, New York, New York 10007, who is the authenticating and paying
agent, registrar, and transfer agent for the notes. We will calculate interest
payments on the notes utilizing a day count fraction of 30-day months and
360-day years.
The notes mature on April 15, 2012 and normally are not redeemable prior to
maturity. However, we may at any time purchase notes at any price or prices in
the open market or otherwise. If we purchase notes in this manner, we have the
discretion to hold, resell, or surrender the notes to the Trustee for
cancellation. The notes are not subject to any sinking fund. The Senior
Indenture does not limit the amount of senior indebtedness or other obligations
which we may issue.
Payment of Additional Amounts
Subject to the exemptions and limitations set forth below, we will pay
additional amounts to the beneficial owner of any note that is a non-United
States person in order to ensure that every net payment on such note will not
be less, due to payment of United States withholding tax, than the amount then
due and payable. For this purpose, a "net payment" on a note means a payment by
us or any paying agent, including payment of principal and interest, after
deduction for any present or future tax, assessment, or other governmental
charge of the United States. These additional amounts will constitute
additional interest on the note.
We will not be required to pay additional amounts, however, in any of the
circumstances described in items (1) through (13) below.
S-4
(1)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
imposed or withheld solely by reason of the beneficial owner of the note:
. having a relationship with the United States as a citizen, resident,
or otherwise;
. having had such a relationship in the past; or
. being considered as having had such a relationship.
(2)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
imposed or withheld solely by reason of the beneficial owner of the note:
. being treated as present in or engaged in a trade or business in the
United States;
. being treated as having been present in or engaged in a trade or
business in the United States in the past;
. having or having had a permanent establishment in the United States;
or
. having or having had a qualified business unit which has the U.S.
dollar as its functional currency.
(3)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
imposed or withheld solely by reason of the beneficial owner of the note
being or having been a:
. personal holding company;
. foreign personal holding company;
. foreign private foundation or other foreign tax-exempt organization;
. passive foreign investment company;
. controlled foreign corporation; or
. corporation which has accumulated earnings to avoid U.S. federal
income tax.
(4)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
imposed or withheld solely by reason of the beneficial owner of the note
owning or having owned, actually or constructively, 10% or more of the
total combined voting power of all classes of our stock entitled to vote.
(5)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
imposed or withheld solely by reason of the beneficial owner of the note
being a bank extending credit pursuant to a loan agreement entered into
in the ordinary course of business.
For purposes of items (1) through (5) above, "beneficial owner" includes a
fiduciary, settlor, partner, member, shareholder, or beneficiary of the holder
if the holder is an estate, trust, partnership, limited liability company,
corporation, or other entity, or a person holding a power over an estate or
trust administered by a fiduciary holder.
(6)Additional amounts will not be payable to any beneficial owner of a note
that is:
. a fiduciary;
. a partnership;
. a limited liability company;
. another fiscally transparent entity; or
. not the sole beneficial owner of the note, or any portion of the note.
S-5
However, this exception to the obligation to pay additional amounts will
apply only to the extent that a beneficiary or settlor in relation to the
fiduciary, or a beneficial owner, partner, or member of the partnership,
limited liability company, or other fiscally transparent entity, would not have
been entitled to the payment of an additional amount had the beneficiary,
settlor, partner, beneficial owner, or member received directly its beneficial
or distributive share of the payment.
(7)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
imposed or withheld by reason of the failure of the beneficial owner of
the note or any other person to comply with applicable certification,
identification, documentation, or other information reporting
requirements. This exception to the obligation to pay additional amounts
will apply only if compliance with such reporting requirements is
required as a precondition to exemption from such tax, assessment, or
other governmental charge by statute or regulation of the United States
or by an applicable income tax treaty to which the United States is a
party.
(8)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
collected or imposed by any method other than by withholding from a
payment on a note by us or any paying agent.
(9)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
imposed or withheld by reason of a change in law, regulation, or
administrative or judicial interpretation that becomes effective more
than 15 days after the payment becomes due or is duly provided for,
whichever occurs later.
(10)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge that is
imposed or withheld by reason of the presentation by the beneficial
owner of a note for payment more than 30 days after the date on which
such payment becomes due or is duly provided for, whichever occurs later.
(11)Additional amounts will not be payable if a payment on a note is reduced
as a result of any:
. estate tax;
. inheritance tax;
. gift tax;
. sales tax;
. excise tax;
. transfer tax;
. wealth tax;
. personal property tax; or
. any similar tax, assessment, or other governmental charge.
(12)Additional amounts will not be payable if a payment on a note is reduced
as a result of any tax, assessment, or other governmental charge
required to be withheld by any paying agent from a payment of principal
or interest on a note if such payment can be made without such
withholding by any other paying agent.
(13)Additional amounts will not be payable if a payment on a note is reduced
as a result of any combination of items (1) through (12) above.
Except as specifically provided under "Payment of Additional Amounts" and
under "Redemption for Tax Reasons," we will not be required to make any payment
of any tax, assessment, or other governmental charge imposed by any government,
political subdivision, or taxing authority of such government.
S-6
As used in this global prospectus supplement, "United States person" means:
. any individual who is a citizen or resident of the United States;
. any corporation, partnership, or other entity created or organized in
or under the laws of the United States;
. any estate if the income of such estate falls within the federal
income tax jurisdiction of the United States regardless of the source
of such income; and
. any trust if a U.S. court is able to exercise primary supervision
over its administration and one or more United States persons have
the authority to control all of the substantial decisions of the
trust.
Additionally, "non-United States person" means a person who is not a United
States person, and "United States" means the United States of America,
including the States and the District of Columbia, its territories, its
possessions, and other areas within its jurisdiction.
Redemption for Tax Reasons
We may redeem the notes in whole, but not in part, at any time after giving
not less than 30 nor more than 60 days' notice to the Trustee and the holders
of the notes, if we have or will become obligated to pay additional amounts as
a result of any change in, or amendment to, the laws or regulations of the
United States or any political subdivision or any authority of the United
States having power to tax, or any change in the application or official
interpretation of such laws or regulations, which change or amendment becomes
effective on or after the date of this global prospectus supplement.
Before we publish any notice of redemption we will deliver to the Trustee a
certificate signed by our Chief Financial Officer or a Senior Vice President
stating that we are entitled to redeem the notes and that the conditions
precedent to redemption have occurred.
We will redeem any notes at 100% of their principal amount together with
interest accrued up to (but excluding) the redemption date.
S-7
BANK OF AMERICA CORPORATION
General
Bank of America Corporation is a Delaware corporation, a bank holding
company, and a financial holding company under the Gramm-Leach-Bliley Act. Our
principal assets are our shares of stock of Bank of America, N.A. and our other
banking and nonbanking subsidiaries. Through those subsidiaries, we provide a
diversified range of banking and nonbanking financial services and products,
primarily throughout the Mid-Atlantic (Maryland, Virginia, and the District of
Columbia), the Midwest (Illinois, Iowa, Kansas, and Missouri), the Southeast
(Florida, Georgia, North Carolina, South Carolina, and Tennessee), the
Southwest (Arizona, Arkansas, New Mexico, Oklahoma, and Texas), the Northwest
(Oregon and Washington), and the West (California, Idaho, and Nevada) regions
of the United States and in selected international markets.
Business Segment Operations
We provide a diversified range of banking and certain nonbanking financial
services and products both domestically and internationally through four
business segments: (1) Consumer and Commercial Banking, (2) Asset Management,
(3) Global Corporate and Investment Banking, and (4) Equity Investments.
Certain operating segments have been aggregated into a single business segment.
In the first quarter of 2001, our 30-year mortgage portfolio was moved from
Consumer and Commercial Banking to a fifth segment, Corporate Other. In the
third quarter of 2001, certain consumer finance businesses being liquidated
were transferred from Consumer and Commercial Banking to Corporate Other. A
customer-centered strategic focus is changing the way we are managing our
business. In addition to existing financial reporting, we have begun preparing
customer segment-based financial operating information.
... Consumer and Commercial Banking
Consumer and Commercial Banking provides a wide array of products and
services to individuals, small businesses, and middle market companies through
multiple delivery channels. The major components of Consumer and Commercial
Banking are Banking Regions, Consumer Products, and Commercial Banking.
. Banking Regions
Banking Regions serves consumer households in 21 states and the District
of Columbia and overseas through our network of 4,251 banking centers,
13,113 ATMs, telephone, and Internet channels on www.bankofamerica.com.
Banking Regions provides a wide array of products and services, including
deposit products such as checking, money market savings accounts, time
deposits and IRAs, debit card products, and credit products such as home
equity, mortgage, and personal auto loans. Banking Regions also includes
small business banking providing treasury management, credit services,
community investment, check card, e-commerce, and brokerage services to
nearly two million small business relationships across the franchise.
. Consumer Products
Consumer Products provides specialized services such as the origination
and servicing of residential mortgage loans, issuance and servicing of
credit cards, direct banking via the telephone and the Internet, lending and
investing to develop low- and moderate-income communities, student lending,
and certain insurance services. Consumer Products also provides retail
finance and floorplan programs to marine, RV, and auto dealerships.
. Commercial Banking
Commercial Banking provides commercial lending and treasury management
services to middle market companies with annual revenue between $10 million
and $500 million. These services are available through relationship manager
teams as well as through alternative channels such as the telephone via the
commercial service center and the Internet by accessing Bank of America
Direct.
... Asset Management
Asset Management includes the Private Bank, Banc of America Capital
Management, and the Individual Investor Group. The Private Bank's goal is to
assist individuals and families in building and preserving their wealth by
providing investment, fiduciary, and comprehensive credit expertise to
high-net-worth clients.
S-8
Banc of America Capital Management is an asset-gathering and asset management
organization serving the needs of institutional clients, high-net-worth
individuals, and retail customers. Banc of America Capital Management manages
money and distribution channels, manufactures investment products, offers
institutional separate accounts and wrap programs, and provides advice to
clients through asset allocation expertise and software. The Individual
Investor Group, which is comprised of Private Client Services and Banc of
America Investment Services, Inc., provides investment, securities, and
financial planning services to affluent and high-net-worth individuals. Private
Client Services focuses on high-net-worth individuals. Banc of America
Investment Services, Inc. includes both the full-service network of investment
professionals and an extensive on-line investor service.
One of our strategies is to focus on and grow the asset management business.
Recent initiatives include new investment platforms that broaden our
capabilities to maximize market opportunities for our clients. We continue to
enhance the financial planning tools and to assist clients with their financial
goals.
Effective January 2, 2001, we acquired the remaining 50% of Marsico Capital
Management LLC ("Marsico") for a total investment of $1.1 billion. We acquired
the first 50% in 1999. Marsico is a Denver-based investment management firm
specializing in large capitalization growth stocks.
... Global Corporate and Investment Banking
Global Corporate and Investment Banking provides a broad array of financial
services such as investment banking, capital markets, trade finance, treasury
management, lending, leasing, and financial advisory services to domestic and
international corporations, financial institutions, and government entities.
Clients are supported through offices in 34 countries in four distinct
geographic regions: United States and Canada; Asia; Europe, Middle East, and
Africa; and Latin America. Products and services provided include loan
origination, merger and acquisition advisory services, debt and equity
underwriting and trading, cash management, derivatives, foreign exchange,
leasing, leveraged finance, project finance, structured finance, and trade
services.
Global Corporate and Investment Banking offers clients a comprehensive range
of global capabilities through three components: Global Investment Banking,
Global Credit Products, and Global Treasury Services.
. Global Investment Banking
Global Investment Banking includes our investment banking activities and
risk management products. Through a separate subsidiary, Banc of America
Securities LLC, Global Investment Banking underwrites and makes markets in
equity securities, high-grade and high-yield corporate debt securities,
commercial paper, and mortgage-backed and asset-backed securities. Banc of
America Securities LLC also provides correspondent clearing services for
other securities broker/dealers and prime-brokerage services. Debt and
equity securities research, loan syndications, merger and acquisition
advisory services, and private placements are also provided through Banc of
America Securities LLC.
In addition, Global Investment Banking provides risk management solutions
for our global customer base using interest rate, equity, credit and
commodity derivatives, foreign exchange, fixed income, and mortgage-related
products. In support of these activities, the businesses will take positions
in these products and capitalize on market-making activities. The Global
Investment Banking business also takes an active role in the trading of
fixed income securities in all of the regions in which Global Corporate and
Investment Banking transacts business and is a primary dealer in the United
States, as well as in several international locations.
. Global Credit Products
Global Credit Products provides credit and lending services and includes
the corporate industry-focused portfolio, leasing, and project finance.
. Global Treasury Services
Global Treasury Services provides the technology, strategies, and
integrated solutions to help financial institutions, government agencies,
and public and private companies manage their operations and cash flows on a
local, regional, national, and global level.
S-9
... Equity Investments
Equity Investments includes Principal Investing, which is comprised of a
diversified portfolio of investments in companies at all stages of the business
cycle, from start up to buyout. Investments are made on both a direct and
indirect basis in the United States and overseas. Direct investing activity
focuses on playing an active role in the strategic and financial direction of
the portfolio company as well as providing broad business experience and access
to our global resources. Indirect investments represent passive limited
partnership stakes in funds managed by experienced third party private equity
investors who act as general partners. Equity Investments also includes our
strategic technology and alliances investment portfolio.
... Corporate Other
Corporate Other consists primarily of the functions associated with managing
our interest rate risk and Consumer Special Assets, which includes certain
consumer finance businesses being liquidated and certain residential mortgages
originated by the mortgage group (not from retail branch originations).
Acquisitions and Sales
As part of our operations, we regularly evaluate the potential acquisition
of, and hold discussions with, various financial institutions and other
businesses of a type eligible for financial holding company ownership or
control. In addition, we regularly analyze the values of, and submit bids for,
the acquisition of customer-based funds and other liabilities and assets of
such financial institutions and other businesses. We also regularly consider
the potential disposition of certain of our assets, branches, subsidiaries, or
lines of business. As a general rule, we publicly announce any material
acquisitions or dispositions when a definitive agreement has been reached.
RECENT DEVELOPMENTS
Recent Financial Information
On April 15, 2002, we reported earnings for the first quarter of 2002. The
press release containing that information was filed with the SEC through our
Current Report on Form 8-K dated April 15, 2002.
S-10
CAPITALIZATION
The following table sets forth our actual capitalization as of December 31,
2001, the date of our latest audited financial statements incorporated herein
by reference, and as adjusted for (1) the issuance of the notes and (2) the
issuance and the maturity of certain other debt securities during the period
beginning January 1, 2002 through the date of this global prospectus
supplement. Since December 31, 2001, there has been no material adverse change
in our financial position.
As
Actual Adjusted
--------- --------
(Amounts in
millions)
LONG-TERM DEBT:
Senior debt
Bank of America Corporation.......................... $ 23,555 $ 23,083
6 1/4% Senior Notes, due 2012........................ -- 998
Subsidiaries (1)..................................... 17,812 15,486
--------- --------
Total senior debt.................................. 41,367 39,567
--------- --------
Subordinated debt
Bank of America Corporation.......................... 20,721 20,518
Subsidiaries (1)..................................... 408 398
--------- --------
Total subordinated debt............................ 21,129 20,916
--------- --------
Total long-term debt............................... 62,496 60,483
--------- --------
Guaranteed Preferred Beneficial Interests in Junior
Subordinated Notes (2)............................. 5,530 5,530
SHAREHOLDERS' EQUITY (3):
Preferred stock, $0.01 par value;
authorized -- 100,000,000 shares; issued
and outstanding -- 1,514,478 shares.................. 65 65
Common stock, $0.01 par value;
authorized -- 5,000,000,000 shares; issued
and outstanding -- 1,559,297,220..................... 5,076 5,076
Retained earnings..................................... 42,980 42,980
Accumulated other comprehensive income................ 437 437
Other................................................. (38) (38)
--------- --------
Total shareholders' equity......................... 48,520 48,520
--------- --------
$ 116,546 $114,533
========= ========
- --------
(1)These obligations are direct obligations of our subsidiaries and, as such,
constitute claims against those subsidiaries prior to our equity interest.
(2)The line item "Guaranteed Preferred Beneficial Interests in Junior
Subordinated Notes" reflects $5,530 million aggregate liquidation amount of
preferred undivided beneficial interests in the assets of 14 wholly owned
grantor trusts at December 31, 2001. Since December 31, 2000 we issued one
$900 million series of trust preferred securities and redeemed two
outstanding series of trust preferred securities totaling $900 million. The
line item excludes deferred issuance costs and unamortized discount. The
sole assets of the trusts are our junior subordinated notes.
(3)On July 26, 2000, our Board of Directors authorized a stock repurchase
program of up to 100 million shares of our common stock at an aggregate cost
of up to $7.5 billion. At December 31, 2001 the remaining buyback authority
for common stock under the 2000 program totaled 2 million shares. On
December 11, 2001, our Board of Directors authorized a new stock repurchase
program of up to an additional 130 million shares of our common stock at an
aggregate cost of up to $10 billion. No shares had been repurchased under
the 2001 program at December 31, 2001.
As of December 31, 2001, we had approximately $300 million of commercial
paper and other short-term notes payable outstanding.
RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for each of the years
in the five-year period ended December 31, 2001 are as follows:
Year Ended December 31,
------------------------
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits.... 2.2 1.8 2.2 1.8 2.1
Including interest on deposits.... 1.5 1.4 1.6 1.5 1.6
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SELECTED FINANCIAL DATA
The following selected financial data as of December 31, 2000 and 2001, and
for each of the years in the three-year period ended December 31, 2001 are
derived from our consolidated financial statements, which are audited by
PricewaterhouseCoopers LLP, independent accountants.
Year Ended December 31,
---------------------------------
1999 2000 2001
---------- ----------- ----------
(Amounts in millions except
per share information)
Income statement:
Interest income............................................ $ 37,213 $ 43,165 $ 38,293
Interest expense........................................... 19,086 24,816 18,003
Net interest income........................................ 18,127 18,349 20,290
Noninterest income......................................... 14,179 14,582 14,348
Total revenue.............................................. 32,306 32,931 34,638
Provision for credit losses................................ 1,820 2,535 4,287
Gains (losses) on sales of securities...................... 240 25 475
Business exit costs........................................ -- -- 1,305
Merger and restructuring charges........................... 525 550 --
Other noninterest expense.................................. 17,986 18,083 19,404
Income before income taxes................................. 12,215 11,788 10,117
Income tax expense......................................... 4,333 4,271 3,325
Net income................................................. 7,882 7,517 6,792
Net income available to common shareholders................ 7,876 7,511 6,787
Average common shares issued and outstanding (in thousands) 1,726,006 1,646,398 1,594,957
Per common share data:
Earnings................................................... $ 4.56 $ 4.56 $ 4.26
Diluted earnings........................................... 4.48 4.52 4.18
Cash dividends paid........................................ 1.85 2.06 2.28
December 31,
-------------------
2000 2001
-------- --------
(Amounts in millions
except ratios)
Balance sheet (period-end):
Total loans and leases..................................................... $392,193 $329,153
Total assets............................................................... 642,191 621,764
Total deposits............................................................. 364,244 373,495
Long-term debt............................................................. 67,547 62,496
Trust preferred securities................................................. 4,955 5,530
Total shareholders' equity................................................. 47,628 48,520
Allowance for credit losses as a percentage of loans and leases outstanding 1.74% 2.09%
Total equity to total assets............................................... 7.42 7.80
Risk-based capital ratios (period-end):
Tier 1 capital............................................................. 7.50 8.30
Total capital.............................................................. 11.04 12.67
Leverage ratio............................................................. 6.12 6.56
S-12
REGISTRATION AND SETTLEMENT
Same Day Settlement and Payment
The underwriters purchasing the notes from us will settle the notes in
immediately available funds. As long as the notes are represented by Global
Securities, we will make all principal and interest payments in immediately
available funds.
Secondary trading in notes and debentures of corporate issuers generally is
settled in clearing house or next day funds. In contrast, as long as the notes
are represented by Global Securities registered in the name of DTC or its
nominee, the notes will trade in DTC's Same-Day Funds Settlement System. DTC
requires secondary market trading activity in the notes to settle in
immediately available funds. This requirement may affect trading activity in
the notes.
Payment of Principal and Interest
Principal of (and premium, if any) and interest on notes in book-entry form
are paid in accordance with the arrangements then in place between the paying
agent and DTC or its nominee, as holder. Interest on notes in certificated form
generally is paid by check mailed to the holders of the notes on the applicable
record date at the address appearing on the security register. Interest is
payable on the outstanding principal amount of the notes from (and including)
the issue date or last interest payment date, to (but excluding) the interest
payment date or maturity date. Principal (and premium, if any) and interest
payable at the maturity date of a note in certificated form are paid by wire
transfer of immediately available funds upon surrender of the note at the
corporate trust office of the applicable Trustee or paying agent.
Book-Entry System
The notes are issued in book-entry only form. This means that we will not
issue actual notes or certificates to each holder. Instead, the notes will be
in the form of a Global Security held in the name of DTC. In order to own a
beneficial interest in a note, you must be an institution that has an account
with DTC or have a direct or individual account with such an institution.
Notes will not be issued in certificated form unless:
. DTC notifies us that it is unwilling or unable to continue as depository
or it otherwise ceases to be a qualified clearing agency and we do not
appoint a successor depository; or
. we make a decision to permit notes to be issued in certificated form and
notify the Trustee of that decision.
No service charge will be made for any registration of transfer or exchange
of notes issued in certificated form, but we may require payment of a sum
sufficient to cover any related tax or other governmental charge. If the notes
are listed on the Luxembourg Stock Exchange and are subsequently issued in
certificated form, we will appoint a paying and transfer agent in Luxembourg.
Any notes in certificated form may be presented for payment and/or transfer at
the paying and transfer agent's office while they are outstanding. In addition,
upon redemption of the notes, any notes in certificated form and listed on the
Luxembourg Stock Exchange may be presented for payment at the offices of the
Luxembourg paying and transfer agent for up to two years after the redemption
date.
Notices
Any notices required to be given to the holders of the notes will be given
to DTC and, if the notes are listed on the Luxembourg Stock Exchange, by
publication in a daily newspaper in Luxembourg which is expected to be the
Luxemburger Wort. If notes are issued in certificated form, notices to holders
of the notes will also be given by mail to the addresses of the holders as they
appear on the security register. However, until any notes are issued in
certificated form, there may be substituted for publication in the newspaper
the delivery of the relevant notice to Euroclear and Clearstream, Luxembourg
for communication to their participants, except that, as long as the notes are
listed on the Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices also will be published in the Luxemburger Wort or
any other leading Luxembourg newspaper. Any notice published in the Luxemburger
Wort or any other
S-13
leading Luxembourg newspaper shall be deemed to have been given on the date of
publication or, if published more than once, on the date of the first
publication. Any notice to Euroclear and Clearstream, Luxembourg shall be
deemed to have been given to their participants on the seventh day after the
day on which the notice was given to Euroclear and Clearstream, Luxembourg. If
approved for listing, as long as the notes are listed on the Luxembourg Stock
Exchange, any change in the Luxembourg paying and transfer agent will be
published in the Luxemburger Wort or any other leading Luxembourg newspaper.
Paying Agent, Security Registrar, and Transfer Agent
Until the notes are paid, we will maintain a paying agent, security
registrar, and transfer agent for the notes. Initially, The Bank of New York,
as Trustee, will serve in each of those capacities. The Luxembourg paying and
transfer agent that will be appointed if the notes are listed on the Luxembourg
Stock Exchange is Banque Generale du Luxembourg S.A. If the notes are listed on
the Luxembourg Stock Exchange, so long as the notes are represented by Global
Securities, Banque Generale du Luxembourg S.A. also is expected to be our
intermediary in Luxembourg.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a brief summary of certain U.S. federal income tax
consequences associated with the acquisition, ownership, and disposition of the
notes applicable to initial purchasers of notes. The summary is based upon the
relevant laws and rules which are now in effect and as they are currently
interpreted. However, these laws and rules may be changed at any time, possibly
with retroactive effect. This discussion does not deal with the federal tax
consequences applicable to all categories of investors. In particular, the
discussion does not deal with those of you who may be in special tax
situations, such as dealers in securities, insurance companies, financial
institutions, or tax-exempt entities. It does not include any description of
the tax laws of any state or local governments or any foreign government that
may be applicable to the notes or to you as holders of the notes.
Prospective purchasers of the notes are urged to consult their own tax
advisors concerning the U.S. federal income tax consequences of acquiring,
owning, and disposing of the notes as well as the application of state, local,
and foreign income and other tax laws.
United States Persons
Interest payable on the notes generally will be includable as ordinary
income in the income of a United States person as received or accrued, in
accordance with that holder's regular method of accounting unless the note is
treated as having been issued with original issue discount ("OID"). If a note
is sold or otherwise disposed of, a United States person generally will
recognize gain or loss equal to the difference between the amount realized on
the disposition (except to the extent attributable to accrued but unpaid
interest) and the holder's tax basis in the note. Such gain or loss generally
will be capital gain or loss and will be long-term capital gain or loss if the
note had been held for more than one year at the time of its disposition.
Non-United States Persons
Principal (and premium, if any) and interest payments, including any OID,
that you receive from us or our agent generally will not be subject to U.S.
federal tax. However, interest, including any OID, may be subject to a 30%
withholding tax (or less under any applicable treaty) if (1) either (a) you do
not certify on IRS Form W-8BEN or a successor form to us or our agent, under
penalties of perjury, that you are a non-United States person or (b) a
securities clearing organization, bank, or other financial institution that
holds customer securities in the ordinary course of its trade or business and
holds the notes does not certify on IRS Form W-8IMY or a successor form to us
or our agent under penalties of perjury that either it or a financial
institution has received the required statement from you certifying that you
are a non-United States person and furnishes us with a copy of the statement,
(2) you actually or constructively owned 10% or more of the total combined
voting power of all classes of our stock entitled to vote, or (3) you are a
controlled foreign corporation for U.S. tax purposes that is related to us
(directly or indirectly) through stock ownership, or (4) you are a bank
extending credit pursuant to a loan agreement entered into in the ordinary
course of your trade or business. If you are claiming benefits under an income
tax treaty, you may be required to obtain a taxpayer identification number and
to certify your eligibility under the applicable treaty's
S-14
limitations on benefits articles. Because the rules may apply differently to
different holders, you are urged to consult your own tax advisor regarding the
application of the rules to you.
If you are in a trade or business in the United States and interest,
including any OID, on a note is effectively connected with the conduct of your
trade or business, you may be subject to U.S. federal income tax on that
interest and any OID in the same manner as if you were a United States person.
If you are a foreign corporation, you may also be subject to a branch profits
tax equal to 30% of your effectively connected earnings and profits for the
taxable year, subject to certain adjustments. Instead of the certification
described in the preceding paragraph, if you have effectively connected
interest income you must provide the payor with a properly executed IRS Form
W-8ECI to claim an exemption from U.S. federal withholding tax.
Except as provided below with respect to backup withholding, you will not be
subject to U.S. federal income tax or withholding taxes on any capital gain
or market discount you realize upon retirement or disposition of a note if (1)
the gain is not effectively connected with a U.S. trade or business carried on
by you, and (2) you are an individual, and you are not present in the United
States for 183 days or more in the taxable year of the retirement or
disposition.
Backup Withholding and Information Reporting
The payment of principal (and premium, if any) and interest and the accrual
of OID, if any, are generally subject to information reporting and possibly to
"backup withholding." Information reporting means that the payment is required
to be reported to you and to the IRS. Backup withholding means that the payor
is required to collect and deposit a portion of your payment with the IRS as a
tax payment on your behalf. Backup withholding is imposed at a rate of 30% for
the 2002 calendar year, will be gradually reduced to 28% by the year 2006 and
will be increased to 31% for the 2011 calendar year and thereafter.
If you are a United States person (other than a corporation or certain
exempt organizations), you may be subject to backup withholding if you do not
supply an accurate taxpayer identification number and certify that your
taxpayer identification number is correct. You may also be subject to backup
withholding if the United States Secretary of the Treasury determines that you
have not reported all interest and dividend income required to be shown on your
federal income tax return or if you do not certify that you have not
underreported your interest and dividend income.
If you are a non-United States person, backup withholding and information
reporting will not apply to payments made to you if you have provided the
required certification that you are a non-United States person as set forth
above, or you otherwise establish an exemption (provided that the payor does
not have actual knowledge that you are a United States person or that the
conditions of any exemption are not in fact satisfied).
Payments of the proceeds from the sale of notes to or through a foreign
office of a broker or the foreign office of a custodian, nominee or other
dealer acting on your behalf generally will not be subject to information
reporting or backup withholding, unless the broker, custodian, nominee, or
other dealer is (1) a United States person, (2) the government of the United
States or the government of any State or political subdivision of any State (or
any agency or instrumentality of any of these governmental units), (3) a
controlled foreign corporation for U.S. tax purposes, (4) a foreign partnership
that is either engaged in a U.S. trade or business or whose U.S. partners in
the aggregate hold more than 50% of the income or capital interests in the
partnership, (5) a foreign person 50% or more of whose gross income for a
certain period is effectively connected with a U.S. trade or business, or (6) a
U.S. branch of a foreign bank or insurance company. If your broker falls into
one of the preceding categories, information reporting (but not backup
withholding) generally will be required for payments made to you unless the
broker has documentation of your foreign status and the broker has no actual
knowledge to the contrary of your status (or you otherwise establish an
exemption from information reporting).
Payment of the proceeds from a sale of notes to or through the U.S. office
of a broker is subject to information reporting and backup withholding, unless
you certify as to your non-United States status or otherwise establish an
exemption from information reporting and backup withholding.
S-15
Any amounts withheld from your payment under the backup withholding rules
would be refundable or allowable as a credit against your U.S. federal income
tax liability.
EU DIRECTIVE ON THE TAXATION OF SAVINGS INCOME
The European Council currently is considering proposals for a new Directive
regarding the taxation of savings income. The key features of the proposed
Directive are:
. Where a "paying agent" resident in any EU member state makes payments of
interest or similar income to an individual resident in another member
state, the tax authorities of the paying agent's member state will be
required to supply details of the payment to the tax authorities of the
other member state. For these purposes, the term "paying agent" is
widely defined to include the principal obligor under a debt obligation;
a paying agent in the normal sense of that term; and an agent who
collects interest or similar income on behalf of an individual
beneficially entitled thereto.
. During a transitional period of not more than seven years from the
coming into effect of the Directive, certain member states (including
possibly Austria, Belgium, and Luxembourg), instead of supplying
information on savings income to the tax authorities of other member
states, may impose a withholding tax. In such cases, "paying agents"
established in the relevant member states must withhold tax from any
interest, discount, or premium paid to an individual resident in another
member state. The withholding tax will be levied at a rate of 15% during
the first three years of the transitional period, and at a rate of 20%
during the remaining four years.
The proposals of the European Council contemplate the establishment of
arrangements to share revenues from withholding taxes so imposed between the
member state of the paying agent and the member state of the residence of the
interest payee. It is possible that these revenue sharing arrangements may be
established with non-European Union countries. Any such revenue sharing could
result in tax withheld by reason of the proposals discussed herein being
treated as a tax of the issuer's non-European Union taxing jurisdiction.
The Directive, which can be adopted only by unanimous agreement among the
member states, also may be conditional on the adoption of comparable
withholding or information reporting measures in non-European Union countries
with significant financial centers (including the United States and
Switzerland) and in dependent or associated territories of certain of the EU
member states.
Pending agreement on the precise text of the Directive, it is not possible
to say what effect, if any, the adoption of the Directive would have on the
notes or payments in respect thereof.
If the Directive is adopted in its current form, no additional amounts will
be payable by us in respect of any withholding tax required to be deducted by
the Directive.
S-16
UNDERWRITING
We entered into an underwriting agreement dated April 17, 2002 with the
underwriters named below. In the underwriting agreement, we agreed to sell to
each of the underwriters and each of the underwriters agreed to purchase from
us the principal amount of the notes shown opposite its name at the public
offering price on the cover page of this global prospectus supplement.
Principal Amount
Underwriter of the Notes
- ----------- ----------------
Banc of America Securities LLC.................... $ 890,000,000
Barclays Capital Inc.............................. 10,000,000
Bear, Stearns & Co. Inc........................... 10,000,000
Credit Suisse First Boston Corporation............ 10,000,000
Goldman, Sachs & Co............................... 10,000,000
Guzman & Company.................................. 10,000,000
Lehman Brothers Inc............................... 10,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 10,000,000
RBC Dominion Securities Corporation............... 10,000,000
Salomon Smith Barney Inc.......................... 10,000,000
UBS Warburg LLC................................... 10,000,000
Utendahl Capital Partners, L.P.................... 10,000,000
--------------
Total.......................................... $1,000,000,000
==============
The obligations of the underwriters under the underwriting agreement,
including their agreement to purchase the notes from us, are several and not
joint. Those obligations are also subject to the satisfaction of conditions
described in the underwriting agreement. The underwriters have agreed to
purchase all of the notes if any of them are purchased.
We will receive proceeds from the sale of notes as indicated on the cover
page of this global prospectus supplement, before deducting estimated offering
expenses of $500,000. The underwriters may sell the notes to certain dealers at
the public offering price, less a concession which will not exceed 0.30% of the
principal amount of the notes. The underwriters and such dealers may resell the
notes to other dealers at a reallowance discount which will not exceed 0.25% of
the principal amount of the notes. After the initial offering of the notes,
these concessions and reallowance discounts may change.
The notes will be offered simultaneously in the United States and abroad.
Each of the underwriters, severally and not jointly, has represented and
agreed that it has not and will not offer, sell, or deliver any of the notes,
directly or indirectly, or distribute this global prospectus supplement or the
attached prospectus or any other offering material relating to the notes, in
any jurisdiction except under circumstances that will, to the best knowledge
and belief of such underwriter, result in compliance with applicable laws and
regulations and that will not impose any obligations on us except as set forth
in the underwriting agreement.
In particular, each underwriter has represented and agreed that:
(1) it has not offered or sold and will not offer or sell any notes to
persons in the United Kingdom prior to the expiration of the period of six
months from the issue date of the notes except to persons whose ordinary
activities involve them in acquiring, holding, managing, or disposing of
investments (as principal or agent) for the purpose of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995;
(2) it will only communicate or cause to be communicated any invitation
or inducement to engage in investment activity (within the meaning of the
Financial Services and Markets Act 2000 (the "FSMA")) received by it in
connection with the issue or sale of the notes in circumstances in which
Section 21(1) of the FSMA does not apply to us; and
(3) it has complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to any notes in, from
or otherwise involving the United Kingdom.
S-17
The notes are a new issue of securities and have no established trading
market. We have been informed by the underwriters that they intend to purchase
and sell the notes in the secondary market from time to time. However, the
underwriters are not obligated to do so and may discontinue making a market for
the notes at any time without giving us notice. There is no assurance that
there will be a secondary market for the notes.
In connection with the offering of the notes, the underwriters may engage in
over-allotment, stabilizing transactions and syndicate covering transactions in
accordance with Regulation M under the United States Securities Exchange Act of
1934. Over-allotment involves sales in excess of the offering size, which
create a short position for the underwriters. Syndicate covering transactions
involve purchases of the notes in the open market after the distribution has
been completed in order to cover short positions. Stabilizing transactions and
syndicate covering transactions may cause the price of the notes to be higher
than it would otherwise be. Those activities, if commenced, may be discontinued
at any time.
The offer and sale of any notes by Banc of America Securities LLC or any of
our other affiliates will comply with the requirements of Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc. regarding
a member firm's underwriting securities of an affiliate. As required by Rule
2720, any such offer and sale will not be made to any discretionary account
without the prior approval of the customer.
We have agreed to indemnify the underwriters and certain other persons
against certain liabilities, including liabilities under the Securities Act of
1933.
Banc of America Securities LLC is a broker-dealer and one of our
subsidiaries. Following the initial distribution of the notes, our affiliates,
including Banc of America Securities LLC, may buy and sell the notes in
secondary market transactions as part of their business as a broker-dealer. Any
sale will be at negotiated prices relating to prevailing prices at the time of
sale. This global prospectus supplement and attached prospectus may be used by
one or more of our affiliates in connection with offers and sales related to
secondary market transactions in the notes to the extent permitted by
applicable law. Our affiliates may act as principal or agent in such
transactions.
Each of the underwriters or their affiliates provides or has provided
investment or commercial banking services to us from time to time in the
ordinary course of business.
LEGAL OPINIONS
The legality of the notes will be passed upon for us by Helms Mulliss &
Wicker, PLLC, Charlotte, North Carolina and for the underwriters by Stroock &
Stroock & Lavan LLP, New York, New York.
S-18
LISTING OF THE NOTES AND
GENERAL INFORMATION
Listing
We have applied to list the notes on the Luxembourg Stock Exchange in
accordance with the rules of the Luxembourg Stock Exchange. We do not intend to
list the notes on any other securities exchange. Prior to listing, a legal
notice relating to the issuance of the notes, our Amended and Restated
Certificate of Incorporation and Bylaws, the Senior Indenture, and the
underwriting agreement will be deposited with the Chief Registrar of the
District Court of Luxembourg, where those documents may be inspected and copies
obtained upon request.
Our annual report on Form 10-K for the year ended December 31, 2001 is
incorporated by reference herein. As long as any of the notes are listed on the
Luxembourg Stock Exchange, copies of that report, as well as all future annual
reports, quarterly reports, and financial current reports on Form 8-K filed
since December 31, 2001, our Amended and Restated Certificate of Incorporation
and Bylaws, the Senior Indenture, the underwriting agreement, and copies of
this global prospectus supplement and attached prospectus will be freely
available at the offices of our Luxembourg listing agent, Banque Generale du
Luxembourg S.A. in the City of Luxembourg.
Independent Accountants
The consolidated financial statements contained in our 2001 annual report on
Form 10-K have been audited by PricewaterhouseCoopers LLP, independent
accountants.
Authorization
The notes are issued under authority granted by our Board of Directors on
June 23, 1999 and by a committee appointed by our Board of Directors on April
17, 2002.
Material Changes
There has been no material adverse change in our financial position on a
consolidated basis since the date of our latest audited financial statements
incorporated herein by reference, except as disclosed in this global prospectus
supplement or in the documents incorporated by reference.
We are not a party to any legal proceeding which, if determined adversely,
would affect materially and adversely our financial position or results of
operations or would affect materially and adversely our ability to perform our
obligations under the notes or the Senior Indenture.
Governing Law
The notes, the Senior Indenture and the underwriting agreement are governed
by, and shall be construed in accordance with, the laws of the State of New
York, United States of America.
Clearing Systems
The notes have been accepted for clearance through Euroclear and
Clearstream, Luxembourg and assigned Common Code No.: 014691081; International
Security Identification No. (ISIN): US 060505 AQ79; and CUSIP No.: 060505 AQ7.
S-19
PRINCIPAL EXECUTIVE OFFICE OF THE CORPORATION
Bank of America Corporation
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255-0065
U.S.A.
INDEPENDENT ACCOUNTANTS OF THE CORPORATION
PricewaterhouseCoopers LLP
Bank of America Corporate Center
100 North Tryon Street
Suite 5400
Charlotte, North Carolina 28202
U.S.A.
TRUSTEE AND
UNITED STATES PAYING
AND TRANSFER AGENT
The Bank of New York
15 Broad Street
New York, New York 10007
U.S.A.
LEGAL ADVISORS
To the Corporation To the Corporation
as to United States law: as to United States tax law:
Helms Mulliss & Wicker, PLLC Stroock & Stroock & Lavan LLP
201 North Tryon Street 180 Maiden Lane
Charlotte, North Carolina 28202 New York, New York 10038
U.S.A. U.S.A.
To the Underwriters:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
U.S.A.
LISTING AGENT AND PAYING AGENT
Banque Generale du Luxembourg S.A.
50 avenue J. F. Kennedy
L-2951 Luxembourg
PROSPECTUS
[LOGO] BANK OF AMERICA
Bank of America Corporate Center
Charlotte, North Carolina 28255
(704) 386-5000
$15,000,000,000
Debt Securities, Warrants, Units, Preferred Stock,
Depositary Shares and Common Stock
We may offer and sell from time to time up to $15,000,000,000 (or the U.S.
dollar equivalent) of:
. debt securities
. warrants to purchase our debt securities or securities of other
unaffiliated issuers
. a combination of securities issued in the form of units
. preferred stock
. fractional interests in preferred stock represented by depositary shares
. common stock.
We may also issue common stock upon conversion, exchange or exercise of any of
the securities listed above.
When we sell a particular series of securities, we will prepare a prospectus
supplement describing the offering and terms of that series of securities. You
should read this prospectus and that prospectus supplement carefully. The
securities described in this prospectus may be denominated in U.S. dollars or a
foreign currency as described in the prospectus supplement.
- --------------------------------------------------------------------------------
Our debt securities are unsecured and are not savings accounts, deposits or
other obligations of a bank. The securities are not guaranteed by any bank and
are not insured by the Federal Deposit Insurance Corporation or any other
governmental agency.
Neither the Securities and Exchange Commission, any state securities commission
nor the Commissioner of Insurance of the State of North Carolina has approved
or disapproved the securities to be issued under this prospectus or determined
if this prospectus is accurate or adequate. Any representation to the contrary
is a criminal offense.
- --------------------------------------------------------------------------------
The date of this prospectus is August 5, 1999.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration or continuous offering process. We may from
time to time sell any combination of the securities described in this
prospectus in one or more offerings up to a total dollar amount of
$15,000,000,000 or the equivalent of this amount in foreign currencies or
foreign currency units.
This prospectus provides you with a general description of the securities we
may offer. Each time we sell securities we will provide you with a prospectus
supplement containing specific information about the terms of the securities
being offered. The prospectus supplement which contains specific information
about the terms of the securities being offered will also include a discussion
of certain U.S. federal income tax consequences and any risk factors or other
special considerations applicable to those securities. The prospectus
supplement may also add, update or change information in this prospectus. If
there is any inconsistency between the information in the prospectus and the
prospectus supplement, you should rely on the information in the prospectus
supplement. You should read both this prospectus and any prospectus supplement
together with additional information described under the heading "Where You Can
Find More Information" beginning on page 32 of this prospectus.
You should rely only on the information provided in this prospectus and in
any prospectus supplement including the information incorporated by reference.
Neither we, nor any underwriters or agents, have authorized anyone to provide
you with different information. We are not offering the securities in any state
where the offer is not permitted. You should not assume that the information in
this prospectus, or any supplement to this prospectus, is accurate at any date
other than the date indicated on the cover page of these documents.
Unless otherwise indicated or unless the context requires otherwise, all
references in this prospectus to "we," "us," "our," or similar references mean
Bank of America Corporation.
2
BANK OF AMERICA CORPORATION
General
Bank of America Corporation is the successor issuer to NationsBank
Corporation ("NationsBank"). On September 25, 1998, NationsBank was
reincorporated from North Carolina to Delaware. On September 30, 1998,
BankAmerica Corporation, a Delaware corporation ("BA"), was merged with and
into NationsBank, with NationsBank as the surviving corporation in the merger.
Upon completion of the merger, NationsBank changed its name to
"BankAmerica Corporation." On April 28, 1999, we changed the name of our
company to "Bank of America Corporation."
We are a multi-bank holding company registered under the Bank Holding
Company Act of 1956. Our principal assets are the shares of stock of Bank of
America, N.A. and our other banking and nonbanking subsidiaries. Through those
subsidiaries, we provide a diverse range of banking and nonbanking financial
services and products throughout the United States and in selected
international markets.
We, and our subsidiaries, are subject to supervision by United States
federal and state banking and other regulatory authorities.
Business Segment Operations
We report the results of our operations through four business segments: (1)
Consumer Banking, (2) Commercial Banking, (3) Global Corporate and Investment
Banking and (4) Principal Investing and Asset Management.
Our Consumer Banking segment provides comprehensive retail banking services
to individuals and small businesses through multiple delivery channels,
including approximately 4,700 banking centers and 14,000 automated teller
machines. These banking centers and automated teller machines are located
principally throughout our franchise and serve approximately 30 million
households in 21 states and the District of Columbia. This segment also
provides specialized services such as the origination and servicing of
residential mortgage loans, issuance and servicing of credit cards, direct
banking via telephone and personal computer, student lending and certain
insurance services. The consumer finance component provides mortgage, home
equity and automobile loans to consumers, retail finance programs to dealers
and lease financing to purchasers of new and used cars.
Our Commercial Banking segment provides a wide range of commercial banking
services for businesses with annual revenues of up to $500 million. Services
provided include commercial lending, treasury and cash management services,
asset-backed lending and factoring. Also included in this segment are our
commercial finance operations which provide: equipment loans and leases, loans
for debt restructuring, mergers and working capital, real estate and healthcare
financing and inventory financing to manufacturers, distributors and dealers.
Our Global Corporate and Investment Banking segment provides a broad array
of financial and investment banking products such as capital-raising products,
trade finance, treasury management, investment banking, capital markets,
leasing and financial advisory services to domestic and international
corporations, financial institutions and government entities. Clients are
supported through offices in 37 countries in four distinct geographic regions:
United States and Canada; Asia; Europe, Middle East and Africa; and Latin
America. Products and services provided include loan origination, cash
management, foreign exchange, leasing, leveraged finance, project finance, real
estate, senior bank debt, structured finance and trade services. Our Global
Corporate and Investment Banking segment also provides commercial banking
services for businesses with annual revenues of $500 million or more. Through a
separate subsidiary, Banc of America Securities LLC, Global Corporate and
Investment Banking is a primary dealer of United States
3
Government securities, underwrites and makes markets in equity securities, and
underwrites and deals in high-grade and high-yield corporate debt securities,
commercial paper, mortgage-backed and asset-backed securities, federal agencies
securities and municipal securities. Debt and equity securities research, loan
syndications, mergers and acquisitions advisory services and private placements
are also provided through Banc of America Securities LLC. Additionally, our
Global Corporate and Investment Banking segment is a market maker in derivative
products, which include swap agreements, option contracts, forward settlement
contracts, financial futures and other derivative products in certain interest
rate, foreign exchange, commodity and equity markets. In support of these
activities, Global Corporate and Investment Banking takes positions in
securities to support client demands and for its own account.
Our Principal Investing and Asset Management segment includes Asset
Management which provides asset management, banking and trust services for high
net worth clients both in the United States and internationally through the
Private Bank. In addition, this segment provides full service and discount
brokerage, investment advisory and investment management, as well as advisory
services for our affiliated family of mutual funds. The Principal Investing
area includes direct equity investments in businesses and investments in
general partnership funds.
Acquisitions and Sales
As part of our operations, we regularly evaluate the potential acquisition
of, and hold discussions with, various financial institutions and other
businesses that are eligible for bank holding company ownership or control. In
addition, we regularly analyze the values of, and submit bids for, the
acquisition of customer-based funds and other liabilities and assets of such
financial institutions and other businesses. We also regularly consider the
potential disposition of certain of our assets, branches, subsidiaries or lines
of business. As a general rule, we publicly announce any material acquisitions
or dispositions when a definitive agreement has been reached.
USE OF PROCEEDS
Unless we describe a different use in a prospectus supplement, we will use
net proceeds from the sale of the securities for general corporate purposes.
General corporate purposes include:
. our working capital needs;
. investments in, or extensions of credit to, our banking and nonbanking
subsidiaries;
. the possible acquisitions of other financial institutions or their assets
or liabilities;
. the possible acquisitions of or investments in other businesses; and
. the possible reduction of outstanding indebtedness or the repurchase of
our outstanding equity securities.
We will temporarily invest the net proceeds pending its use. We may, from
time to time, engage in additional capital financings as we determine
appropriate based on our needs and prevailing market conditions.
4
RATIOS OF EARNINGS TO FIXED CHARGES AND RATIOS OF EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
Our consolidated ratio of earnings to fixed charges and our ratio of
earnings to fixed charges and preferred stock dividend requirements for each of
the years in the five year period ended December 31, 1998 and for the three
months ended March 31, 1999 are as follows:
Year Ended
December 31, Three Months
------------------------ Ended
1994 1995 1996 1997 1998 March 31, 1999
---- ---- ---- ---- ---- --------------
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits......... 2.4 2.3 2.3 2.2 1.8 2.3
Including interest on deposits......... 1.6 1.5 1.6 1.6 1.4 1.6
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends:
Excluding interest on deposits........ 2.2 2.1 2.2 2.2 1.8 2.3
Including interest on deposits........ 1.6 1.5 1.5 1.5 1.4 1.6
. The consolidated ratio of earnings to fixed charges is calculated as
follows:
net income before taxes + fixed charges - equity in undistributed earnings
or losses of unconsolidated subsidiaries
------------------------------------------------------------
fixed charges
. The consolidated ratio of earnings to combined fixed charges and preferred
stock dividends is calculated as follows:
net income before taxes + fixed charges - equity in undistributed earnings
or losses of unconsolidated subsidiaries
------------------------------------------------------------
fixed charges + preferred stock dividend requirements
Fixed charges consist of:
. interest expense, which we calculate excluding interest on deposits in one
case and including that interest in the other,
. amortization of debt discount and appropriate issuance costs, and
. one-third (the amount deemed to represent an appropriate interest factor)
of net rent expense under lease commitments.
Preferred stock dividend requirements represent dividend requirements on the
outstanding preferred stock adjusted to reflect the pre-tax earnings that would
be required to cover such dividend requirements.
5
REGULATORY MATTERS
The following discussion describes elements of an extensive regulatory
framework applicable to bank holding companies and banks and specific
information about us and our subsidiaries. Federal regulation of banks and bank
holding companies is intended primarily for the protection of depositors and
the Bank Insurance Fund rather than stockholders or creditors.
General
As a bank holding company, we are subject to the supervision of the Board of
Governors of the Federal Reserve System. Our bank subsidiaries are subject to
supervision and examination by applicable federal agencies, principally the
Office of the Comptroller of the Currency. Because bank deposits are insured by
the Federal Deposit Insurance Corporation ("FDIC"), our bank subsidiaries are
also subject to that agency's regulations. In addition to the impact of
regulation, commercial banks are affected significantly by the actions of the
Federal Reserve Board as it attempts to control the money supply and credit
availability to influence the economy.
As a bank holding company, we are also subject to regulation under the Bank
Holding Company Act of 1956 (the "BHCA"), and to the BHCA's examination and
reporting requirements. Under the BHCA, bank holding companies generally may
not acquire direct or indirect ownership or control of more than five percent
of the voting shares or substantially all of the assets of any company,
including a bank, without the prior approval of the Federal Reserve Board. In
addition, bank holding companies are prohibited under the BHCA from engaging in
nonbanking activities other than those that the Federal Reserve Board has
determined are closely related to banking.
Interstate Banking
Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 (the "Interstate Banking and Branching Act"), a bank holding company
may acquire banks in states other than its home state without regard to the
permissibility of such acquisitions under state law, but is subject to any
state requirement that the banks have been organized and operating for a
minimum period of time, not to exceed five years, and the requirement that the
bank holding company, before or after the proposed acquisition, controls no
more than 10 percent of the total amount of deposits of insured depository
institutions in the United States and no more than 30 percent, or such lesser
or greater amount set by state law, of such deposits in that state.
The Interstate Banking and Branching Act also authorizes, subject to certain
restrictions, banks to merge across state lines and to create interstate
branches. The Interstate Banking and Branching Act also permits a bank to open
new branches in a state in which it does not already have banking operations if
the state enacts a law permitting such branching. To the extent permitted under
these laws, we plan to consolidate our banking subsidiaries, other than our
limited purpose credit card bank, into a single bank. As of July 23, 1999, we
operate one interstate bank, Bank of America, N.A., headquartered in Charlotte,
North Carolina, with domestic offices primarily in Arizona, Arkansas,
California, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Maryland,
Missouri, Nevada, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina,
Tennessee, Texas, Virginia, Washington and the District of Columbia. We also
operate separate banks in Arizona and California. In addition, we have a
federal savings bank headquartered in Portland, Oregon with branch offices in
several states. As previously described, we regularly evaluate merger and
acquisition opportunities and anticipate that we will continue that practice.
Capital and Operational Requirements
The Federal Reserve Board, the Comptroller and the FDIC have issued
substantially similar risk-based and leverage capital guidelines applicable to
United States banking organizations. In addition, these regulatory agencies may
from time to time require that a banking organization
6
maintain capital above the minimum levels, based on its financial condition or
actual or anticipated growth. The Federal Reserve Board risk-based guidelines
define a three-tier capital framework. Tier 1 capital consists of common and
qualifying preferred shareholders' equity, less certain intangibles and other
adjustments. Tier 2 capital consists of preferred stock not qualifying as Tier
1 capital, subordinated and other qualifying debt and the allowance for credit
losses up to 1.25 percent of risk weighted assets. Tier 3 capital includes
subordinated debt that is unsecured, fully paid, has an original maturity of at
least two years, is not redeemable before maturity without the prior approval
by the Federal Reserve and includes a lock-in clause precluding payment of
either interest or principal if the payment would cause the issuing bank's
risk-based capital ratio to fall or remain below the required minimum. The sum
of Tier 1 and Tier 2 capital less investments in unconsolidated subsidiaries
represents qualifying total capital, at least 50 percent of which must consist
of Tier 1 capital. Risk-based capital ratios are calculated by dividing Tier 1
and total capital by risk-weighted assets. Assets and off-balance sheet
exposures are assigned to one of four categories of risk-weights, based
primarily on relative credit risk. The minimum Tier 1 capital ratio is 4
percent and the minimum total capital ratio is 8 percent. Our Tier 1 and total
risk-based capital ratios under these guidelines at March 31, 1999 were 7.40
percent and 11.17 percent, respectively. At March 31, 1999, we did not have any
subordinated debt that qualified as Tier 3 capital.
The leverage ratio is determined by dividing Tier 1 capital by adjusted
quarterly average total assets. Although the stated minimum ratio is 3 percent,
most banking organizations are required to maintain ratios of at least 100 to
200 basis points above 3 percent. Our leverage ratio at March 31, 1999 was 6.47
percent. We believe that we meet the leverage ratio requirement.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies five capital categories for insured
depository institutions (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) and requires the respective Federal bank regulatory agencies
to implement systems for "prompt corrective action" for insured depository
institutions that do not meet minimum capital requirements within such
categories. This act imposes progressively more constraints on operations,
management and capital distributions, depending on the category in which an
institution is classified. Failure to meet the capital guidelines could also
subject a banking institution to capital raising requirements. In addition,
this act requires the various regulatory agencies to prescribe certain
non-capital standards for safety and soundness relating generally to operations
and management, asset quality and executive compensation and permits regulatory
action against a financial institution that does not meet such standards.
Banking regulatory agencies have adopted regulations that define the five
capital categories identified by this act, using the total risk-based capital,
Tier 1 risk-based capital and leverage capital ratios as the relevant capital
measures. Under those regulations, a "well capitalized" institution must have a
Tier 1 capital ratio of at least 6 percent, a total capital ratio of at least
10 percent and a leverage ratio of at least 5 percent and not be subject to a
capital directive order. Under these guidelines, our banks are considered well
capitalized.
Banking agencies have also adopted final regulations which mandate that
regulators take into consideration (a) concentrations of credit risk; (b)
interest rate risk (when the interest rate sensitivity of an institution's
assets does not match the sensitivity of its liabilities or its
off-balance-sheet position); (c) risks from non-traditional activities, as well
as an institution's ability to manage those risks; and (d) market risk in
connection with trading activity, when determining the adequacy of an
institution's capital. That evaluation will be made as a part of the
institution's regular safety and soundness examination.
7
Dividends
Our funds for cash dividends to stockholders are derived from a variety of
sources, including cash and temporary investments. The primary source of such
funds, however, is dividends received from our banks. Those subsidiaries are
subject to various regulatory policies and requirements relating to the payment
of dividends, including requirements to maintain capital above regulatory
minimums. The appropriate federal regulatory authority is authorized to
determine under certain circumstances relating to the financial condition of
the bank or bank holding company that the payment of dividends would be an
unsafe or unsound practice and to prohibit payment. The ability to pay
dividends also may be affected by the various minimum capital requirements and
the capital and non-capital standards established under FDICIA. Our rights, and
the rights of our stockholders and creditors, to participate in any
distribution of the assets or earnings of our banks is further subject to the
prior claims of creditors of those entities.
Source of Strength
According to Federal Reserve Board policy, a bank holding company is
expected to act as a source of financial strength to its subsidiary banks and
to commit resources to support its subsidiary banks. This support may be
required at times when we are not able to provide such support. Similarly, the
cross-guaranty provisions of the Federal Deposit Insurance Act provides that if
the FDIC suffers or anticipates a loss as a result of a default by one of our
banking or thrift subsidiaries or by providing assistance to a subsidiary in
danger of default, then the other bank or thrift subsidiaries may be assessed
for the FDIC's loss.
Changes in Regulations
Proposals to change the laws and regulations governing the banking industry
are frequently introduced in Congress, in the state legislatures and before the
various bank regulatory agencies. At the present time, Congress is considering
legislation that would increase the permissible scope of securities and
insurance activities in which a bank holding company or its affiliates may
engage. We cannot determine the likelihood and timing of any such proposals or
legislation and the impact they might have on us and our subsidiaries.
PLAN OF DISTRIBUTION
We may sell securities to or through underwriters or dealers, through agents
or directly to other purchasers. The underwriters, dealers or agents may be
Banc of America Securities LLC or any of our other affiliates. Each prospectus
supplement will state the terms of the securities to be offered, including the
names of any underwriters or agents, the public offering or purchase price of
the securities and the net proceeds we will receive from the sale, any
underwriting discounts and other items constituting underwriters' compensation,
any discounts and commissions allowed or paid to dealers, any commissions
allowed or paid to agents, and if the securities will be listed on a securities
exchange or exchanges, the identity of any exchange.
Securities may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, or through
one or more underwriters acting alone. The underwriters may acquire the
securities for their own account and may resell the securities from time to
time in one or more transactions, including negotiated transactions, at a fixed
public offering price or varying prices determined at the time of sale. If an
underwriting syndicate is used, we will list the managing underwriter or
underwriters on the cover page of the prospectus supplement. Unless otherwise
stated in the prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to certain conditions and each of the
underwriters will be obligated to purchase all of its securities if any are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
8
We may offer and sell securities through agents from time to time. We will
name any agent involved in the offer and sale of any securities and describe
any commissions payable by us to the agent in the prospectus supplement. Unless
otherwise indicated in the prospectus supplement, the agent will be acting on a
best efforts basis during the appointment period.
We may sell directly to, and solicit offers from, institutional investors or
others who may be deemed to be underwriters as defined in the Securities Act of
1933 (the "Securities Act") for any resale of the securities. We will describe
the terms of any such sales in the prospectus supplement.
Securities may be sold in connection with a remarketing after their purchase
by one or more firms including our affiliates, acting as principal for their
accounts or as our agent.
We may authorize underwriters, dealers or agents to solicit offers by
certain institutions to purchase debt securities from us pursuant to delayed
delivery contracts providing for payment and delivery at a future date. The
type of security, the amount, the price and other significant terms of such
delayed delivery contracts will be described in the prospectus supplement.
Institutions that may be solicited include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, all as approved by us. The obligations of
any purchaser under any such contract will not be subject to any conditions
except that (1) the purchase of the debt securities will not at the time of
delivery be prohibited under the laws of the jurisdiction to which the
purchaser is subject, and (2) if the debt securities are also being sold to
underwriters acting as principals for their own account, the underwriters must
have purchased the debt securities not sold for delayed delivery. The
underwriters and other such persons will not have any responsibility for the
validity or performance of such contracts.
Any underwriter or agent participating in the distribution of the securities
may be considered to be an underwriter, as that term is defined in the
Securities Act, of the securities being offered and sold. Any discounts or
commissions received by them from us and any profit realized by them on the
sale or resale of the securities may be considered to be underwriting discounts
and commissions under the Securities Act.
To facilitate offering the securities, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
securities or any other securities the prices of which may be used to determine
payments on such securities. Specifically, the underwriters may overallot in
connection with the offering, creating a short position in the securities for
their own accounts. In addition, to cover overallotments or to stabilize the
price of the securities or of any other securities, the underwriters may bid
for, and purchase, the securities or any other securities in the open market.
Finally, in any offering of the securities through a syndicate of underwriters,
the underwriting syndicate may reclaim selling concessions allowed to an
underwriter or a dealer for distributing the securities in the offering if the
syndicate repurchases previously distributed securities in transactions to
cover syndicate short positions, in stabilization transactions or otherwise.
Any of these activities may stabilize or maintain the market price of the
securities above independent market levels. The underwriters are not required
to engage in these activities, and may end any of these activities at any time.
Since any series of securities offered and sold pursuant to this prospectus
may be a new issue with no established trading market, there may not be a
liquid trading market for the security.
Under agreements entered into with us, underwriters and agents may be
entitled to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, or to contribution for payments the
underwriters or agents may be required to make.
Banc of America Securities LLC is a broker-dealer and one of our
subsidiaries. Each initial offering and any remarketing of securities involving
Banc of America Securities LLC or any of our other affiliates will be conducted
in compliance with the requirements of Rule 2720 of the Conduct
9
Rules of the National Association of Securities Dealers, Inc. regarding the
offer and sale of securities of an affiliate. Following the initial
distribution of securities, our affiliates, including Banc of America
Securities LLC, may buy and sell the securities in secondary market
transactions as part of their business as a broker-dealer. Any sale will be at
negotiated prices relating to prevailing prices at the time of sale. This
prospectus and related prospectus supplements may be used by one or more of our
affiliates in connection with offers and sales related to secondary market
transactions in the securities to the extent permitted by applicable law. Any
of our affiliates may act as principal or agent in such transactions. Banc of
America Securities LLC will not execute a transaction in the securities in a
discretionary account without specific prior written approval of that customer.
DESCRIPTION OF DEBT SECURITIES
We will issue any senior debt securities under an Indenture dated as of
January 1, 1995 (the "Senior Indenture") between us and U.S. Bank Trust
National Association, as successor Trustee to BankAmerica National Trust
Company (the "Senior Trustee"). We will issue any subordinated debt securities
under an Indenture dated as of January 1, 1995 (the "Subordinated Indenture")
between us and The Bank of New York, Trustee (the "Subordinated Trustee"). We
refer to the Senior Indenture and the Subordinated Indenture collectively as
the "Indentures" and the Senior Trustee and Subordinated Trustee collectively
as the "Trustees."
The following summaries of certain significant provisions of the Indentures
are not complete and are qualified in their entirety by the provisions of the
applicable Indentures, which are exhibits to the Registration Statement and are
incorporated herein by reference. Whenever defined terms are used, but not
defined in this prospectus, the terms have the meanings given to them in the
Indentures.
General
The total amount of securities that may be offered and sold using this
prospectus is limited to the aggregate initial offering price of the securities
registered under the Registration Statement. Neither Indenture limits the
amount of debt securities that may be issued.
Debt securities are our direct unsecured obligations and are not obligations
of our subsidiaries. The senior debt securities of each series rank equally
with all of our other unsecured senior debt. The subordinated debt securities
of each series are subordinate and junior in right of payment to our Senior
Indebtedness.
We will issue the debt securities in fully registered form without coupons.
The debt securities may be denominated in U.S. dollars or in another currency
or currency unit. Any debt securities that are denominated in U.S. dollars will
be issued in denominations of $1,000 or a multiple thereof unless otherwise
provided in the prospectus supplement. If any of the debt securities are
denominated in a foreign currency or currency unit, or if principal or any
premium or interest on any of the debt securities is payable in any foreign
currency or currency unit, the authorized denominations, as well as any
investment considerations, restrictions, tax consequences, specific terms and
other information relating to such issue of debt securities and such foreign
currency or currency unit, will be stated in the prospectus supplement.
We may issue debt securities in one or more series with the same or
different maturities. We may issue debt securities which provide for an amount
less than the stated principal amount to be paid upon an acceleration of its
maturity (each an "Original Issue Discount Security"). Original Issue Discount
Securities may bear no interest or may bear interest at a rate which at the
time of issuance is below market rates and will be sold at a discount below
their stated principal amount. Certain debt securities may be deemed to be
issued with original issue discount for United States
10
Federal income tax purposes. If we issue debt securities with original issue
discount, we will discuss the Federal tax implications in the prospectus
supplement.
Each prospectus supplement will describe the terms of any debt securities we
issue. The terms may include:
. the title and type of the debt securities;
. any limit on the aggregate principal amount of the debt securities;
. the person to whom interest is payable if other than the owner of the debt
securities;
. the date or dates on which the principal of the debt securities will be
payable;
. the interest rate or rates, which may be fixed or variable, and the method
used to calculate that interest;
. the interest payment dates, the regular record dates for the interest
payment date, and the date interest will begin to accrue;
. the place or places where payments may be made on the debt securities and
the place or places where the debt securities may be presented for
registration of transfer or exchange;
. any date or dates after which the debt securities may be redeemed or
purchased in whole or in part at our option or the option of the
noteholder pursuant to any sinking fund or other redemption provision and
the periods, prices, terms and conditions of such redemption or purchase;
. if other than the full principal amount, the portion of the principal
amount of the debt securities that will be payable upon declaration or
acceleration of the maturity;
. the currency of principal and any premium and interest payments on the
debt securities, if other than U.S. currency;
. any index used to determine the amount of principal, premium and interest
payments on the debt securities;
. if the debt securities will be issued in other than book-entry form;
. the identification or method of selecting any interest rate calculation
agents, exchange rate calculation agents or any other agents for the debt
securities;
. if either the defeasance (Section 14.02) or covenant defeasance (Section
14.03) sections of the Indentures are not applicable to the debt
securities; and
. any provision relating to the extension or renewal of the maturity date of
the debt securities.
Our ability to make payments of principal and any premium and interest on
the debt securities may be affected by the ability of our bank and nonbank
subsidiaries to pay dividends. Their ability, as well as our ability, to pay
dividends in the future is and could be influenced by bank regulatory
requirements and capital guidelines. See "Regulatory Matters."
Neither Indenture contains provisions protecting noteholders against a
decline in credit quality resulting from takeovers, recapitalizations, the
incurrence of additional indebtedness or our restructuring. If our credit
quality declines as a result of such an event, or otherwise, the ratings of any
debt securities then outstanding may be withdrawn or downgraded.
Reopenings
We have the ability to "reopen," or later increase, the principal amount of
a series of debt securities offered and sold by us without notice to the
noteholders by selling additional debt securities with the same terms.
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Conversion
We may issue debt securities that are convertible, at either our or the
noteholder's option, into our preferred stock, depositary shares, common stock
or other debt securities. If this is the case, the prospectus supplement will
describe that conversion ability and its terms such as:
. the periods during which conversion may be elected;
. the conversion price payable and the number of shares or amount of
preferred stock, depositary shares, common stock or other debt securities
that may be purchased upon conversion, and any adjustment provisions; and
. the procedures for electing conversion.
Exchange, Registration and Transfer
Subject to the terms of the applicable Indenture, debt securities of any
series, other than debt securities issued in book-entry form, may be exchanged
at the option of the noteholder for other debt securities of the same series
and of an equal aggregate principal amount and type in any authorized
denominations.
Debt securities may be presented for registration of transfer at the office
of the security registrar or at the office of any transfer agent designated and
maintained by us. The prospectus supplement will include the name of the
transfer agent. The security registrar or transfer agent will make the transfer
or registration only if it is satisfied with the documents of title and
identity of the person making the request. There will not be a service charge
for any exchange or registration of transfer of debt securities, but we may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with the exchange. At any time we may
change transfer agents or approve a change in the location through which any
transfer agent acts, except that we will be required to maintain a transfer
agent in each place of payment for the series. At any time, we may designate
additional transfer agents for any series of debt securities.
We will not be required to (1) issue, exchange or register the transfer of
any debt security of any series to be redeemed for a period of 15 days after
the selection of the debt securities to be redeemed; or (2) exchange or
register the transfer of any debt security that was selected, called or is
being called for redemption, except the unredeemed portion of any debt security
being redeemed in part.
For a discussion of restrictions on the exchange, registration and transfer
of Global Securities, see "Registration and Settlement."
Payment and Paying Agents
The principal and any premium and interest on debt securities will be paid
at the offices of the paying agents we may designate from time to time. In
addition, at our option, payment of any interest may be made by check mailed to
the address of the noteholder as recorded in the security register. Interest on
a debt security on any interest payment date generally will be paid to the
person in whose name the debt security is registered at the close of business
on the regular record date for that payment. For a discussion of payment of
principal, premium or interest on Global Securities, see "Registration and
Settlement."
We have initially designated the principal corporate trust offices of the
Trustees in the City of New York as the places where the debt securities may be
presented for payment. At any time we may change paying agents or the
designated payment office. Any other paying agents for the debt securities of
each series will be named in the prospectus supplement.
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Subordination
The subordinated debt securities will be subordinated in right of payment to
all our Senior Indebtedness. The Subordinated Indenture defines "Senior
Indebtedness" as any indebtedness for money borrowed, including all of our
indebtedness for borrowed and purchased money, all of our obligations arising
from off-balance sheet guarantees and direct credit substitutes, and our
obligations associated with derivative products such as interest and foreign
exchange rate contracts and commodity contracts, that were outstanding on the
date we executed the Subordinated Indenture, or were created, incurred or
assumed after that date and all deferrals, renewals, extensions and refundings
of that indebtedness or obligations unless the instrument creating or
evidencing the indebtedness provides that the indebtedness is subordinate in
right of payment to any of our other indebtedness. Each prospectus supplement
for a series of subordinated debt securities will indicate the aggregate amount
of our Senior Indebtedness outstanding at that time and any limitation on the
issuance of additional Senior Indebtedness.
If there is a default or event of default on any Senior Indebtedness that is
not remedied and we and the Subordinated Trustee receive notice of this from
the holders of at least 10% in principal amount of any kind or category of any
Senior Indebtedness or if the Subordinated Trustee receives notice from us, we
will not be able to make any principal, premium or interest payments on the
subordinated debt securities or repurchase our subordinated debt securities.
If we repay any subordinated debt security before the required date or in
connection with a distribution of our assets to creditors pursuant to a
dissolution, winding up, liquidation or reorganization, any principal, premium
or interest will be paid to holders of Senior Indebtedness before any holders
of Subordinated Indebtedness are paid. In addition, if such amounts were
previously paid to the holders of Subordinated Debt or the Subordinated
Trustee, the holders of Senior Debt shall have first rights to such amounts
previously paid.
Until all Senior Indebtedness is paid in full, the holders of subordinated
debt securities will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of our assets.
Sale or Issuance of Capital Stock of Banks
The Senior Indenture prohibits the issuance, sale or other disposition of
capital stock, or securities convertible into or options, warrants or rights to
acquire capital stock, of any Principal Subsidiary Bank (as defined below) or
of any subsidiary which owns shares of capital stock, or securities convertible
into or options, warrants or rights to acquire capital stock, of any Principal
Subsidiary Bank, with the following exceptions:
. sales of directors' qualifying shares;
. sales or other dispositions for fair market value, if, after giving effect
to the disposition and to conversion of any shares or securities
convertible into capital stock of a Principal Subsidiary Bank, we would
own at least 80% of each class of the capital stock of such Principal
Subsidiary Bank;
. sales or other dispositions made in compliance with an order of a court or
regulatory authority of competent jurisdiction;
. any sale by a Principal Subsidiary Bank of additional shares of its
capital stock, securities convertible into shares of its capital stock, or
options, warrants or rights to subscribe for or purchase shares of its
capital stock, to its shareholders at any price, so long as before such
sale we owned, directly or indirectly, securities of the same class and
immediately after the sale, we owned, directly or indirectly, at least as
great a percentage of each class of securities of the Principal Subsidiary
Bank as we owned before such sale of additional securities; and
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. any issuance of shares of capital stock, or securities convertible into or
options, warrants or rights to subscribe for or purchase shares of capital
stock, of a Principal Subsidiary Bank or any subsidiary which owns shares
of capital stock, or securities convertible into or options, warrants or
rights to acquire capital stock, of any Principal Subsidiary Bank, to us
or our wholly owned subsidiary.
A Principal Subsidiary Bank is defined in the Senior Indenture as any Bank
with total assets equal to more than 10% of our total consolidated assets. At
present, Bank of America, N.A. is our only Principal Subsidiary Bank.
Waiver of Covenants
The holders of a majority in principal amount of the debt securities of all
series affected that are outstanding under the Indenture may waive compliance
with certain covenants or conditions of the Indentures.
Modification of the Indentures
We and the applicable Trustee may modify the Indenture with the consent of
the holders of at least 66 2/3% of the aggregate principal amount of the debt
securities of all series at the time outstanding under that Indenture and
affected thereby, voting as one class. However, no modification will extend the
fixed maturity of, reduce the principal amount or redemption premium of, or
reduce the rate of or extend the time of payment of interest on, any debt
security without the consent of each noteholder. No modification will reduce
the percentage of debt securities which is required to consent to modification
without the consent of all holders of the debt securities outstanding.
In addition, we and the Trustee may execute supplemental indentures in
certain limited circumstances without the consent of any holders of outstanding
debt securities.
In determining whether the holders of the required principal amount of the
debt securities outstanding have given any request, demand, authorization,
direction, notice, consent or waiver thereunder, (a) the principal amount of an
Original Issue Discount Security that will be deemed to be outstanding will be
the amount of the principal thereof that would be due and payable at such time
upon an event of default, and (b) the principal amount of a debt security
denominated in a foreign currency or currency unit will be the U.S. dollar
equivalent on the date of original issuance of the debt security.
Meetings and Action by Securityholders
The Trustee may call a meeting in its discretion or upon request by us or
the holders of at least 10% in principal amount of the debt securities
outstanding of such series upon the giving of notice. If a meeting of
noteholders is duly held, any resolution raised or decision taken will be
binding on all holders of debt securities of that series.
Defaults and Rights of Acceleration
The Subordinated Indenture defines an event of default as our bankruptcy
under Federal bankruptcy laws. The Senior Indenture defines an event of default
as any one of the following events:
. our failure to pay principal or premium when due on any securities of a
series;
. our failure to pay interest on any securities of a series, within 30 days
after the interest becomes due;
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. our breach of any of our other covenants contained in the senior debt
securities or the Senior Indenture, that is not cured within 90 days after
written notice to us by the Senior Trustee, or to us and the Senior
Trustee by the holders of at least 25% in principal amount of all senior
debt securities then outstanding under the Senior Indenture and affected
thereby; and
. certain events involving our bankruptcy, insolvency or liquidation.
If an event of default occurs and is continuing, either the Trustee or the
holders of 25% in principal amount of the outstanding debt securities of that
series may declare the principal amount or, if the debt securities are Original
Issue Discount Debt Securities, a specified portion of the principal amount of
all debt securities of that series to be due and payable immediately. The
holders of a majority in principal amount of the debt securities then
outstanding or of such series affected may annul the declaration of an event of
default and waive past defaults.
Payment of principal of the subordinated debt securities may not be
accelerated in the case of a default in the payment of principal or any premium
or interest or the performance of any of our other covenants.
Collection of Indebtedness
If we fail to pay principal or premium on the debt securities or if we are
over 30 days late on an interest payment on the debt securities, the
appropriate Trustee can demand that we pay to it, for the benefit of the
noteholders, the amount which is due and payable on the debt securities
including any interest incurred because of our failure to make that payment. If
we fail to pay the required amount on demand, the Trustee may take appropriate
action, including instituting judicial proceedings. Further, the noteholder may
also institute suit to enforce our obligation to make payment of principal,
premium or interest due on any debt security regardless of the actions taken by
the Trustee.
The holders of a majority in principal amount of the debt securities then
outstanding under an Indenture may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee under that
Indenture but the Trustee will be entitled to receive from the holders
reasonable indemnity against expenses and liabilities.
Periodically, we are required to file with the Trustees a certificate
stating that we are not in default with any of the terms of the Indentures.
Notices
We will provide noteholders any required notices by first-class mail to the
addresses of the holders as they appear in the security register.
Concerning the Trustees
We and our subsidiaries have from time to time maintained deposit accounts
and conducted other banking transactions with The Bank of New York and U.S.
Bank Trust National Association, and their affiliated entities in the ordinary
course of business. Each of the Trustees also serves as trustee for certain
series of our outstanding indebtedness under other indentures.
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WARRANTS
Description of Debt Warrants
We may issue warrants to purchase debt securities ("Debt Warrants"). Debt
Warrants may be issued independently or together with any of our other
securities and may be attached to or separate from such securities. Debt
Warrants will be issued under warrant agreements with a warrant agent
designated in the prospectus supplement. The following summary of provisions of
the warrant agreement and form of Debt Warrant is not complete and is subject
to, and is qualified in its entirety by reference to, all the provisions of the
warrant agreement and the Debt Warrant. Any warrant agreement will be filed as
an exhibit to or incorporated by reference in the Registration Statement.
If Debt Warrants are offered, the prospectus supplement will describe the
terms of the Debt Warrants and the warrant agreement relating to the Debt
Warrants, including the following:
. the offering price;
. the designation, aggregate principal amount and terms of the debt
securities purchasable upon exercise of the Debt Warrants;
. the currency or currency unit in which the price for the Debt Warrants may
be payable;
. if applicable, the designation and terms of the securities with which the
Debt Warrants are issued and the number of Debt Warrants issued with each
such security;
. if applicable, the date on and after which the Debt Warrants and the
related securities will be separately transferable;
. the principal amount of debt securities purchasable upon exercise of a
Debt Warrant and the price at which, and currency or currency units based
on or relating to currencies in which, the principal amount of debt
securities may be purchased upon such exercise;
. the dates the right to exercise the Debt Warrants will commence and expire
and if the Debt Warrants are not continuously exercisable any dates the
Debt Warrants are not exercisable;
. if applicable, a discussion of certain Federal income tax consequences;
. whether the Debt Warrants or related securities will be listed on any
securities exchange;
. whether the Debt Warrants will be issued in global or definitive form; and
. the warrant agent.
Description of Universal Warrants
We may issue warrants ("Universal Warrants") to buy or sell securities of an
entity unaffiliated with us, to buy a basket of such securities, to buy an
index or indices of securities or any combination of those securities, to buy
or sell currencies or currency units, or to buy and sell commodities
(collectively, the "Exercise Items").
Universal Warrants may be issued independently or together with other
securities offered by any prospectus supplement and may be attached to or
separate from the other securities. The Universal Warrants will be issued under
warrant agreements we will enter into with a warrant agent who will be
designated in the prospectus supplement. The following summary of certain
provisions of the form of Universal Warrant agreement and the Universal
Warrants is not complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Universal Warrant agreement. Any
Universal Warrant agreement will be filed as an exhibit to or incorporated by
reference in the registration statement.
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If Universal Warrants are offered, the prospectus supplement will describe
the terms of the Universal Warrants and the warrant agreement, including the
following:
. the offering price;
. the title and aggregate number of such Universal Warrants;
. the nature and amount of the Exercise Items that such Universal Warrants
represent the right to buy or sell;
. whether the Universal Warrants are put warrants or call warrants;
. the price at which the Exercise Item may be purchased or sold and the
procedures and conditions relating to exercise;
. whether the exercise price or the Universal Warrant may be paid in cash or
by exchange of the Exercise Item or both;
. the dates the right to exercise the Universal Warrants will commence and
expire;
. if applicable, a discussion of certain Federal income tax consequences;
. whether the Universal Warrants or related securities will be listed on any
securities exchange;
. whether the Universal Warrants will be issued in global or definitive form;
. the warrant agent; and
. any other terms of the Universal Warrants.
Modification
We and the warrant agent may amend the terms of any warrant agreement and
the warrants without the consent of the holders for the purpose of curing any
ambiguity or correcting any inconsistent provision therein or in any other
manner we deem necessary or desirable and which will not adversely affect the
interests of the holders in any respect. In addition, we may amend the warrant
agreement and the terms of the warrants with the consent of the owners of a
majority of the outstanding unexercised warrants affected. However, any
modification to the warrants cannot change the exercise price, reduce the
amounts receivable upon exercise cancellation or expiration, shorten the time
period during which the warrants may be exercised or otherwise materially and
adversely affect the rights of the owners of the warrants or reduce the
percentage of outstanding warrants required to modify or amend the warrant
agreement or the terms of the warrants, without the consent of the affected
owners.
Enforceability of Rights of Warrantholders; Governing Law
The warrant agent will act solely as our agent and will not assume any
obligation or relationship of agency or trust with the holders of the Warrants.
Any record holder or beneficial owner of a warrant may, without anyone else's
consent, enforce by appropriate legal action, on its own behalf, its right to
exercise the warrant in the manner provided therein or in the warrant
agreement. A warrantholder will not be entitled to any of the rights of a
holder of the debt securities or other securities purchasable upon the exercise
of the warrant before exercising the warrant.
Unsecured Obligations
The warrants are our unsecured contractual obligations and will rank equally
with all of our other unsecured contractual obligations and our unsecured and
unsubordinated debt. Since most of our assets are owned by our subsidiaries,
our rights and the rights of our creditors, including
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warrantholders, to participate in the distribution of assets of any subsidiary
upon that subsidiary's liquidation or recapitalization will be subject to the
prior claims of that subsidiary's creditors.
DESCRIPTION OF UNITS
Units will consist of one or more warrants and debt securities or any
combination thereof. If Units are offered, the prospectus supplement will
describe the terms of the Units, including the following:
. all terms of Units and of the warrants and debt securities, or any
combination thereof, comprising the Units, including whether and under
what circumstances the securities comprising the Units may or may not be
traded separately;
. a description of the terms of any agreement to be entered into between us
and a bank or trust company as unit agent governing the Units; and
. a description of the provisions for the payment, settlement, transfer or
exchange of the Units.
DESCRIPTION OF PREFERRED STOCK
General
We have 100,000,000 shares of preferred stock authorized and may issue such
preferred stock in one or more series, each with such preferences,
designations, limitations, conversion rights and other rights as we may
determine. We have designated:
(a) 3,000,000 shares of ESOP Convertible Preferred Stock, Series C (the
"ESOP Preferred Stock") of which 1,887,729 shares were issued and outstanding
at March 31, 1999;
(b) 35,045 shares of 7% Cumulative Redeemable Preferred Stock, Series B (the
"Series B Preferred Stock"), of which 8,771 shares were issued and outstanding
at March 31, 1999; and
(c) 20,000,000 shares of $2.50 Cumulative Convertible Preferred Stock Series
BB (the "Series BB Preferred Stock"), of which 5,539 shares were issued and
outstanding at March 31, 1999.
The Preferred Stock
General. Any preferred stock sold pursuant to this prospectus will have the
general dividend, voting and liquidation preference rights stated below unless
otherwise provided in the prospectus supplement. Reference is made to the
prospectus supplement for specific terms, including, where applicable:
. the title and stated value of the preferred stock;
. the aggregate number of shares of preferred stock offered;
. the price at which the preferred stock will be issued;
. the dividend rates or method of calculation, the dividend period and the
dates dividends will be payable;
. whether dividends will be cumulative or noncumulative, and if cumulative,
the date the dividends will begin to cumulate;
. the dates the preferred stock will be subject to redemption at our option,
and any redemption terms;
. any mandatory redemption or sinking fund provisions;
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. any rights on the part of the stockholder or us to convert the preferred
stock into shares of another security; and
. any additional voting, liquidation, preemptive and other rights,
preferences, privileges, limitations and restrictions.
The description of certain provisions of the preferred stock stated below
and in the prospectus supplement is not complete and is qualified in its
entirety by reference to the description in our Amended and Restated
Certificate of Incorporation, which will describe the terms of the offered
preferred stock and be filed with the SEC at or before the time of sale of that
preferred stock.
In addition, we may elect to offer depositary shares evidenced by depository
receipts representing a fractional interest in a share of a particular series
of the preferred stock issued and deposited with a Depositary.
The preferred stock ranks senior to our common stock as to the payment of
dividends and the distribution of our assets on liquidation, dissolution and
winding up. The dividend and liquidation preference rights of the preferred
stock relative to any existing or future series of our preferred stock will be
stated in the prospectus supplement.
The preferred stock, when issued, will be fully paid and nonassessable.
Dividends. The holders of the preferred stock will be entitled to receive
when, as and if declared by us, cash dividends at such rates as will be
specified in the prospectus supplement. All dividends will be paid out of our
funds that are legally available for such purpose. We will not pay dividends on
our other shares nor will we redeem or otherwise acquire for any other
consideration or pay into any sinking fund if dividends on any series of
preferred stock are in arrears.
Voting. The holders of preferred stock will not have voting rights, except
as required by applicable law or as specifically approved by us and described
in the prospectus supplement, with regard to matters submitted to a general
vote of our stockholders.
Liquidation Preference. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of any series of preferred
stock will be entitled to receive, after distributions to holders of any series
or class of our capital stock, as may be stated in the prospectus supplement,
an amount equal to the appropriate stated or liquidation value of the shares of
the series plus an amount equal to accrued and unpaid dividends, if any,
through the date of the payment. If the assets and funds to be distributed
among the holders of such preferred stock will be insufficient to permit the
payment to such holders of the full amount due, then the holders of the
preferred stock will share ratably in any distribution of our assets in
proportion to the amounts which otherwise would be payable on the shares held
by them upon the distribution if all amounts payable on the shares were paid in
full.
The following summary of the ESOP Preferred Stock, Series B Preferred Stock
and Series BB Preferred Stock is qualified in its entirety by reference to the
description of these securities contained in our Amended and Restated
Certificate of Incorporation.
ESOP Preferred Stock
All shares of ESOP Preferred Stock are held by the trustee under the
NationsBank Corporation Retirement Savings Plan (the "ESOP"). The ESOP
Preferred Stock ranks senior to our common stock, but ranks junior to the
Series B Preferred Stock and Series BB Preferred Stock as to dividends and
distribution on liquidation. Shares of the ESOP Preferred Stock are convertible
into common stock at a conversion rate of 1.68 shares of common stock per share
of ESOP Preferred Stock, subject to certain customary anti-dilution adjustments.
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Preferential Rights. The ESOP Preferred Stock does not have preemptive or
preferential rights to purchase or subscribe for shares of our capital stock of
any class and is not subject to any sinking fund obligations or other
obligations to repurchase or retire the series, except as discussed below.
Dividends. The ESOP Preferred Stock is entitled to an annual dividend,
subject to certain adjustments, of $3.30 per share, payable semiannually.
Unpaid dividends accumulate on the date they first became payable, without
interest. While any shares of ESOP Preferred Stock are outstanding, we may not
declare, pay or set apart for payment any dividend on any other series of stock
ranking equally with the ESOP Preferred Stock as to dividends unless declared
and paid, or set apart for payment like dividends on the ESOP Preferred Stock
for all dividend payment periods ending on or before the dividend payment date
for such parity stock, ratably in proportion to their respective amounts of
accumulated and unpaid dividends. We generally may not declare, pay or set
apart for payment any dividends, except for, among other things, dividends
payable solely in shares of stock ranking junior to the ESOP Preferred Stock as
to dividends or upon liquidation, or, make any other distribution on, or make
payment on account of the purchase, redemption or other retirement of, any
other class or series of our capital stock ranking junior to the ESOP Preferred
stock as to dividends or upon liquidation, until full cumulative dividends on
the ESOP Preferred Stock have been declared and paid or set apart for payment
when due.
Voting Rights. The holder of the ESOP Preferred Stock is entitled to vote on
all matters submitted to a vote of the holders of common stock and votes
together with the holders of common stock as one class. Except as otherwise
required by applicable law, the holder of the ESOP Preferred Stock has no
special voting rights. To the extent that the holder of the shares is entitled
to vote, each share is entitled to the number of votes equal to the number of
shares of common stock into which the shares of ESOP Preferred Stock could be
converted on the record date for determining the stockholders entitled to vote,
rounded to the nearest whole vote.
Distributions. In the event of our voluntary or involuntary dissolution,
liquidation or winding-up, the holder of the ESOP Preferred Stock will be
entitled to receive out of our assets available for distribution to
stockholders, subject to the rights of the holders of any Preferred Stock
ranking senior to or equally with the ESOP Preferred Stock as to distributions
upon liquidation, dissolution or winding-up but before any amount will be paid
or distributed among the holders of common stock or any other shares ranking
junior to the ESOP Preferred Stock as to such distributions, liquidating
distributions of $42.50 per share plus all accrued and unpaid dividends thereon
to the date fixed for distribution. If, upon our voluntary or involuntary
dissolution, liquidation or winding-up, the amounts payable on ESOP Preferred
Stock and any other stock ranking equally therewith as to any such distribution
are not paid in full, the holder of the ESOP Preferred Stock and the other
stock will share ratably in any distribution of assets in proportion to the
full respective preferential amounts to which they are entitled. After payment
of the full amount of the liquidating distribution to which it is entitled, the
holder of the ESOP Preferred Stock will not be entitled to any further
distribution of our assets. Any merger, consolidation or purchase or sale of
assets by us will not be deemed to be a dissolution, liquidation or winding-up
of our affairs.
Redemption. The ESOP Preferred Stock is redeemable, in whole or in part, at
our option, at any time. The redemption price for the shares of the ESOP
Preferred Stock, which may be paid in cash or shares of common stock, will be
$42.50 per share. The redemption price also must include all accrued and unpaid
dividends to the date of redemption. If the ESOP Preferred Stock is treated as
Tier 1 capital for bank regulatory purposes, the approval of the Federal
Reserve Board may be required to redeem the ESOP Preferred Stock.
In addition, we are required to redeem shares of the ESOP Preferred Stock at
the option of the holder of the shares to the extent necessary either to
provide for distributions required to be
20
made under the ESOP or to make payments of principal, interest or premium due
and payable on any indebtedness incurred by the holder of the shares for the
benefit of the ESOP.
Series B Preferred Stock
Preferential Rights. We may, without the consent of holders of Series B
Preferred Stock, issue preferred stock with superior or equal rights or
preferences. The shares of the Series B Preferred Stock rank prior to the ESOP
Preferred Stock and the common stock.
Dividends. Holders of shares of Series B Preferred Stock are entitled to
receive, when and as declared by our Board cumulative cash dividends at an
annual dividend rate per share of 7% of the stated value thereof, out of any
funds legally available for such purpose. The dividend is payable quarterly.
Dividends on Series B Preferred Stock are cumulative, and we cannot declare or
pay cash dividends on any shares of common stock unless full cumulative
dividends on the Series B Preferred Stock have been paid or declared and funds
sufficient for the payment have been set apart.
Voting Rights. Each share of Series B Preferred Stock has equal voting
rights, share for share, with each share of our common stock.
Distributions. In the event of our dissolution, liquidation or winding up,
the holders of Series B Preferred Stock are entitled to receive, after payment
of the full liquidation preference on shares of any class of preferred stock
ranking superior to the Series B Preferred Stock, but before any distribution
on shares of our common stock, liquidating dividends of $100 per share plus
accumulated dividends.
Redemption. Shares of Series B Preferred Stock are redeemable, in whole or
in part, at the option of the holders thereof, at the redemption price of $100
per share plus accumulated dividends, provided that (i) full cumulative
dividends have been paid, or declared and funds sufficient for payment set
apart, upon any class or series of preferred stock ranking superior to Series B
Preferred Stock; and (ii) are not then in default or arrears on any sinking
fund or analogous fund or call for tenders obligation or agreement for the
purchase or any class or series of preferred stock ranking superior to the
Series B Preferred Stock.
Series BB Preferred Stock
Preferential Rights. The shares of Series BB Preferred Stock rank before
Series B Preferred Stock, ESOP Preferred Stock and common stock as to dividends
and upon liquidation.
Dividends. Holders of the Series BB Preferred Stock are entitled to receive,
when and as declared by our Board, cash dividends at the rate of $2.50 per
annum per share, out of our assets legally available for payment. Dividends are
payable quarterly on January 1, April 1, July 1, and October 1 of each year.
Dividends on the Series BB Preferred Stock are cumulative from January 1, 1998.
Voting Rights. Holders of Series BB Preferred Stock have no voting rights
except as required by law and, if any quarterly dividend payable on the Series
BB Preferred Stock is in arrears, the holders of Series BB Preferred Stock will
be entitled to vote together with the holders of our common stock at our next
meeting of stockholders and at each subsequent meeting of stockholders unless
all dividends in arrears have been paid or declared and set apart for payment
before the date of such meeting. In those cases where holders of Series BB
Preferred Stock are entitled to vote, each holder will be entitled to cast the
number of votes equal to the number of whole shares of our common stock into
which his or her Series BB Preferred Stock is then convertible.
Conversion Rights. Subject to the terms and conditions stated below, the
holders of shares of Series BB Preferred Stock have the right, at their option,
to convert such shares at any time through September 16, 1999 into fully paid
and nonassessable shares of common stock at the rate
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of 6.17215 shares of our common stock for each share of Series BB Preferred
Stock surrendered for conversion. The conversion rate is subject to adjustment
from time to time.
Distributions. In the event of our voluntary or involuntary liquidation,
dissolution or winding up, the holders of Series BB Preferred Stock will be
entitled to receive out of our assets available for distribution to
stockholders an amount equal to $25 per share plus an amount equal to accrued
and unpaid dividends to and including the date of such distribution, and no
more, before any distribution will be made to the holders of any class of our
stock ranking junior to the Series BB Preferred Stock as to the distribution of
assets. Any merger, consolidation or purchase or sale of assets by us will not
be deemed a liquidation, dissolution or winding up of our affairs. Shares of
Series BB Preferred Stock are not subject to a sinking fund.
Redemption. On June 23, 1999, our board of directors voted to redeem the
Series BB Preferred Stock on October 1, 1999, at a redemption price of $25 per
share plus accrued and unpaid dividends to the redemption date.
DESCRIPTION OF DEPOSITARY SHARES
General
We may, at our option, offer fractional shares of preferred stock, rather
than full shares of such securities. If such option is exercised, we will issue
receipts for depositary shares to the public. Each receipt will represent a
fractional interest in a share of a particular series of the preferred stock,
as stated in a prospectus supplement.
The particular terms of the preferred stock offered and the extent, if any,
to which the general provisions may apply to the depositary shares will be
described in the prospectus supplement. The general descriptions below and in
any prospectus supplement are not complete and are subject to and qualified in
their entirety by reference to the deposit agreement and the depositary
receipts, the forms of which are incorporated by reference in the Registration
Statement and the definitive forms of which will be filed with the SEC at the
time of sale of the depositary shares.
The shares of any series of preferred stock represented by depositary shares
will be deposited under a deposit agreement between us and a bank or trust
company selected by us having its principal office in the United States and
having a combined capital and surplus of at least $5,000,000 (the
"Depositary"). Subject to the terms of the deposit agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fraction of
a share of preferred stock represented by such Depositary Share, to all the
rights and preferences of the preferred stock represented thereby, including
dividend, voting, redemption, conversion and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of preferred stock in accordance
with the terms of the offering.
Pending the preparation of definitive engraved depositary receipts, the
Depositary may, upon our written order, issue temporary depositary receipts.
The temporary depositary receipts will be substantially identical to, and will
have all rights of, the definitive depositary receipts but will not be in
definitive form. Definitive depositary receipts will be prepared thereafter and
temporary depositary receipts will be exchanged for definitive depositary
receipts at our expense.
Upon the surrender of depositary receipts at the principal office of the
Depositary and upon payment by the holder of the charges provided in the
deposit agreement and subject to the terms thereof, a holder of depositary
shares is entitled to have the Depositary deliver to such holder the number of
full shares of the preferred stock underlying the depositary shares evidenced
by the surrendered depositary receipts. A holder of shares of preferred stock
thus withdrawn will not thereafter be entitled to receive depositary shares in
excess of the number of depositary shares
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representing the number of full shares of preferred stock to be withdrawn. The
Depositary will deliver to such holder at the same time a new depositary
receipt evidencing such excess number of depositary shares.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received pursuant to the preferred stock to the record holders of
depositary shares relating to that preferred stock in proportion to the number
of depositary shares owned by the holders. However, the Depositary will
distribute only the amount that can be distributed without attributing to any
holder of depositary shares a fraction of one cent. Any balance that is not
distributed will be added to and treated as part of the next sum received by
the Depositary for distribution to record holders.
If there is a distribution other than in cash, the Depositary will
distribute property it receives to the record holders of depositary shares who
are entitled thereto, unless the Depositary determines that it is not feasible
to make such distribution, in which case the Depositary, with our approval, may
sell such property and distribute the net proceeds to such holders.
Redemption of Depositary Shares
If a series of preferred stock depositary shares is subject to redemption,
the depositary shares will be redeemed from the proceeds received by the
Depositary from the redemption, in whole or in part, of that series of
preferred stock held by the Depositary. The Depositary will mail notice of
redemption at least 30 and not more than 45 days before the date fixed for
redemption to the record holders of the depositary shares to be redeemed at
their addresses appearing in the Depositary's books. The redemption price per
depositary share will be equal to the applicable fraction of the redemption
price per share payable on such series of the preferred stock. Whenever we
redeem preferred stock held by the Depositary, the Depositary will redeem as of
the same redemption date the number of depositary shares representing the
preferred stock redeemed. If less than all the depositary shares are redeemed,
the depositary shares redeemed will be selected by lot or pro rata as
determined by the Depositary.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be deemed to be outstanding and all rights of the
holder of the depositary shares will cease, except the right to receive the
monies payable upon redemption and any money or other property the holders of
such depositary shares were entitled to receive upon such redemption upon
surrender to the Depositary of the depositary receipts evidencing the
depositary shares.
Voting the Preferred Stock
Any voting rights of holders of the depositary shares are directly dependent
on the voting rights of the underlying voting preferred stock. Upon receipt of
notice of any meeting at which the holders of the preferred stock held by the
Depositary are entitled to vote, the Depositary will mail the information
contained in the notice of meeting to the record holders of the depositary
shares relating to such preferred stock. Each record holder of depositary
shares on the record date, which will be the same date as the record date for
the preferred stock, will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of preferred stock
underlying such holder's depositary shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of preferred stock underlying the
depositary shares in accordance with such instructions, and we will agree to
take all action which may be deemed necessary by the Depositary to enable the
Depositary to do so. The Depositary will abstain from voting preferred stock if
it does not receive specific instructions from the holders of depositary shares
relating to such preferred stock.
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Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between us and the Depositary. However, any amendment which materially and
adversely alters the rights of the existing holders of depositary shares will
not be effective unless the amendment has been approved by the record holders
of at least a majority of the depositary shares then outstanding. Either we or
the Depositary may terminate a Deposit Agreement if all outstanding depositary
shares have been redeemed or if there has been a final distribution in respect
of the preferred stock in connection with our liquidation, dissolution or
winding up.
Changes of Depositary
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will pay charges
of the Depositary in connection with the initial deposit of the preferred stock
and any redemption of the preferred stock. Holders of depositary shares will
pay other transfer and other taxes and governmental charges and such other
charges as are expressly provided in the Deposit Agreement to be for their
accounts.
Miscellaneous
The Depositary will forward to the holders of depositary shares all of our
reports and communications which are delivered to the Depositary and which we
are required to furnish to the holders of the preferred stock.
We, and the Depositary, will not be liable if we are prevented or delayed by
law or any circumstance beyond our control in performing our obligations under
the Deposit Agreement. All of our obligations under the Deposit Agreement are
limited to performance in good faith of our respective duties thereunder and
neither of us will be obligated to prosecute or defend any legal proceeding in
respect of any depositary shares or preferred stock unless provided with
satisfactory indemnity. We, and the Depositary, may rely upon written advice of
counsel or accountants, or information provided by persons presenting preferred
stock for deposit, holders of depositary shares or other persons believed to be
competent and on documents believed to be genuine.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to us notice of its
election to do so, and we may at any time remove the Depositary, any
resignation or removal will take effect only upon the appointment of a
successor Depositary and the successor Depositary's acceptance of such
appointment. Any successor Depositary must be a bank or trust company having
its principal office in the United States and having a combined capital and
surplus of at least $5,000,000.
DESCRIPTION OF COMMON STOCK
The following summary of our common stock is qualified in its entirety by
reference to the description of the common stock incorporated herein by
reference.
General
We are authorized to issue 5,000,000,000 shares of common stock, of which
approximately 1.7 billion shares were outstanding on March 31, 1999. The common
stock trades on the New York Stock Exchange and on the Pacific Exchange under
the symbol "BAC." The common stock is also listed on the London Stock Exchange,
and certain shares are listed on the Tokyo Stock Exchange. As of March 31,
1999, 308 million shares were reserved for issuance in connection with various
of our employee and director benefit plans and our Dividend Reinvestment and
Stock Purchase Plan and the conversion of our outstanding convertible
securities and for other purposes. After taking
24
into account the reserved shares, there were approximately 2.9 billion
authorized shares of common stock available for issuance as of March 31, 1999.
Voting and Other Rights
Holders of common stock are entitled to one vote per share. In general, a
majority of votes cast on a matter is sufficient to take action upon routine
matters. However, (i) amendments to our Amended and Restated Certificate of
Incorporation must be approved by the affirmative vote of the holders of a
majority of the outstanding shares of each class entitled to vote thereon as a
class, and (ii) a merger or dissolution or the sale of all or substantially all
of our assets, must be approved by the affirmative vote of the holders of a
majority of the voting power of the outstanding voting shares. Directors are
elected by a plurality of the votes cast, and stockholders do not have the
right to cumulate their votes in the election of directors.
In the event of our liquidation, holders of common stock will be entitled to
receive pro rata any assets legally available for distribution to stockholders,
subject to any prior rights of any preferred stock then outstanding.
Our common stock does not have any preemptive rights, redemption privileges,
sinking fund privileges or conversion rights. All the outstanding shares of
common stock are, and upon proper conversion of any preferred stock, all of the
shares of our common stock into which such shares are converted will be,
validly issued, fully paid and nonassessable.
ChaseMellon Shareholder Services, L.L.C. is the transfer agent and registrar
for our common stock.
Dividends
The holders of our common stock are entitled to receive dividends or
distributions as our Board may declare out of funds legally available for such
payments. Our payment of dividends is subject to the restrictions of Delaware
law applicable to the declaration of dividends by a corporation. A corporation
generally may not authorize and pay dividends if, after giving effect thereto,
it would be unable to meet its debts as they become due in the usual course of
business or if the corporation's total assets would be less than the sum of its
total liabilities plus the amount that would be needed, if it were to be
dissolved at the time of distribution, to satisfy claims upon dissolution of
stockholders who have preferential rights superior to the rights of the holders
of its common stock. In addition, the payment of dividends to stockholders is
subject to any prior rights of outstanding preferred stock. Stock dividends, if
any are declared, may be paid from our authorized but unissued shares.
REGISTRATION AND SETTLEMENT
The Depository Trust Company
Unless otherwise specified in a prospectus supplement, the debt securities
we offer will be issued only in book-entry form represented by global
securities in registered form (a "Global Security"). The Global Security will
be held through DTC, as depositary, and registered in the name of Cede & Co.,
as nominee of DTC. Accordingly, Cede & Co. will be the holder of record of the
securities.
Beneficial interests in the Global Security will be shown on, and transfers
will be effected through, records maintained by DTC. Transfers of ownership
interests in the securities will be accomplished by making entries in DTC
participants' books acting on behalf of beneficial owners. Beneficial owners of
these securities will not receive certificates representing their ownership
interest, unless the use of the book-entry system is discontinued.
25
So long as DTC or its nominee is the registered owner of a Global Security,
DTC or its nominee, as the case may be, will be the sole holder of the
securities represented thereby for all purposes under the applicable Indenture
or warrant or unit agreement. Except as otherwise provided below, the
beneficial owners of the securities will not be entitled to receive physical
delivery of the certificated security and will not be considered the holders
for any purpose under the applicable Indenture or agreement. Accordingly, each
beneficial owner must rely on the procedures of DTC and, if such beneficial
owner is not a DTC participant, on the procedures of the DTC participant
through which such beneficial owner owns its interest in order to exercise any
rights of a holder under such security or the applicable Indenture or
agreement. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated form. Such
limits and laws may impair the ability to transfer beneficial interests in the
securities.
The following is based on information furnished by DTC:
DTC will act as securities depository for certain securities. Those
securities will be issued as fully registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One Global Security will be
issued for all of the principal amount of the securities, but if any series
exceeds an aggregate principal amount of $200,000,000, certificates will be
issued in increments of up to $200,000,000.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and
a "clearing agency registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). DTC
holds securities that its participants deposit with it. DTC also facilitates
the settlement among its participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic book-entry
changes in the participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct participants of DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of
its direct participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to DTC's system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a direct participant, either
directly or indirectly. The rules applicable to DTC and its participants are
on file with the SEC.
Purchases of securities under DTC's system must be made by or through
direct participants, which will receive a credit for the securities on DTC's
records. The ownership interest of each actual purchaser, the beneficial
owner, of each security represented by a Global Security is in turn to be
recorded on the records of direct and indirect participants. Beneficial
owners will not receive written confirmation from DTC of their purchase, but
beneficial owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their
holdings, from the direct or indirect participants through which the
beneficial owner entered into the transaction. The participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to its direct
participants, by direct participants to indirect participants, and by direct
and indirect participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
securities. DTC assigns its right to consent or vote to its direct
participants.
26
Principal and any premium or interest payments on the securities will be
made in immediately available funds to DTC. DTC's practice is to credit
direct participants' accounts on the applicable payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payment on such date. Payments by
participants to beneficial owners will be governed by standing instructions
and customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participant and not of DTC or any other
party, subject to any statutory or regulatory requirements that may be in
effect from time to time. Payment of principal and any premium or interest
to DTC is our responsibility, disbursement of such payments to direct
participants is the responsibility of DTC, and disbursement of such payments
to the beneficial owners is the responsibility of the direct or indirect
participant.
Redemption notices will be sent to Cede & Co. If less than all of the
securities are being redeemed, DTC's practice is to determine by lot the
amount of the interest of each direct participant in such issue to be
redeemed.
DTC may discontinue providing its services as securities depository for
the securities at any time by giving us reasonable notice. Under such
circumstances, if a successor securities depository is not obtained,
certificated securities are required to be printed and delivered.
Management of DTC is aware that some computer applications and systems
for processing data that are dependent upon calendar dates, including dates
before, on, and after January 1, 2000, may encounter "Year 2000 problems."
DTC has informed its participants and other members of the financial
community that it has developed and is implementing a program so that its
systems, which relate to the timely payment of distributions (including
principal and interest payments) to securityholders, book-entry deliveries
and settlement of trades within DTC, continue to function appropriately.
This program includes a technical assessment and a remediation plan, each of
which is complete. Additionally, DTC's plan includes a testing phase, which
is expected to be completed within appropriate time frames.
However, DTC's ability to perform its services properly is also dependent
upon other parties, such as issuers and their agents, as well as the DTC
participants, third party vendors from whom DTC licenses software and
hardware and on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service
providers. DTC has informed the financial community that it is contacting,
and will continue to contact, third party vendors from whom DTC acquires
services to: (a) impress upon them the importance of such services being
Year 2000 compliant; and (b) determine the extent of their efforts for Year
2000 remediation (and, as appropriate, testing) of their services. In
addition, DTC is in the process of developing such contingency plans as it
deems appropriate.
The information in this section concerning DTC and DTC's system has been
obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy thereof.
Cedelbank and Euroclear
Securities of a series issued in book-entry form and sold or traded outside
the United States may be represented by one or more Global Securities held
through Cedelbank, societe anonyme ("Cedelbank"), or Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the Euroclear System (the
"Euroclear Operator" or "Euroclear"), European international clearing systems.
Cedelbank and Euroclear hold omnibus positions on behalf of Cedelbank
participants and Euroclear participants, respectively, on the books of their
respective depositaries, which in turn hold such positions in customers'
securities accounts in the depositaries' names on the books of DTC.
27
Transfers between Cedelbank participants and Euroclear participants occur in
compliance with their rules and operating procedures. Cross-market transfers
between persons holding directly or indirectly through DTC in the United
States, on the one hand, and directly or indirectly through Cedelbank
participants or Euroclear participants, on the other, will be handled by DTC in
accordance with DTC rules on behalf of a European international clearing system
by its depositary; however, cross-market transactions will require delivery of
instructions to the European international clearing system by the counterparty
in such system in accordance with its rules and procedures and within its
established deadlines. A European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
depositary to take action to carry out final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Cedelbank participants and Euroclear participants may not deliver
instructions directly to the depositaries.
Because of time-zone differences, credits for securities in Cedelbank or
Euroclear as a result of a transaction with a DTC participant will be made
during the subsequent securities settlement processing, and will be dated the
business day following the DTC settlement date; those credits or any
transactions in those securities settled during processing will be reported to
the relevant Cedelbank participant or Euroclear participant on that business
day. Cash received in Cedelbank or Euroclear as a result of sales of securities
by or through a Cedelbank participant or a Euroclear participant to a DTC
participant will be received with value on the DTC settlement date but will be
available in the relevant Cedelbank or Euroclear cash account only as of the
business day following settlement in DTC.
Cedelbank is incorporated under the laws of Luxembourg as a depositary.
Cedelbank holds securities for its participating organizations and facilitates
the clearance and settlement of securities transactions between its
participants through electronic book-entry changes in accounts of those
participants, thereby eliminating the need for physical movement of
certificates. Transactions may be settled by Cedelbank in any of 28 currencies,
including United States dollars. Cedelbank provides to its participants
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Cedelbank interfaces with domestic markets in several countries. As a
depository, Cedelbank is subject to regulation by the Luxembourg Monetary
Institute. Cedelbank participants consist of recognized financial institutions
around the world, including underwriters, securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations
and may include the underwriters or agents with respect to a particular series
of securities. Indirect access to Cedelbank is also available to other entities
that clear through or maintain a custodial relationship with a Cedelbank
participant.
The Euroclear System was created in 1968 to hold securities for participants
of the Euroclear System and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and cash.
Transactions now may be settled by Euroclear in any of 32 currencies, including
United States dollars. The Euroclear System includes various other services,
including securities lending and borrowing and interfaces with domestic markets
in several countries generally similar to the arrangements for cross-market
transfers with DTC described above. The Euroclear System is operated by the
Euroclear Operator, under contract with Euroclear Clearance System, S.C., a
Belgian cooperative corporation (the "Cooperative"). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the Euroclear Operator,
not the Cooperative. The Cooperative establishes policy for the Euroclear
System on behalf of Euroclear participants. Euroclear participants include
banks (including central banks), securities brokers and dealers and other
professional financial
28
intermediaries and may include the underwriters or agents for a particular
series of securities. Indirect access to the Euroclear System is also available
to other firms that clear through or maintain a custodial relationship with a
Euroclear participant.
The Euroclear Operator is the Brussels branch of a New York banking
corporation that is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Federal Reserve Board and the New York State
Banking Department, as well as the Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear Systems and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts. The Euroclear Operator
acts under the Terms and Conditions only on behalf of Euroclear participants
and has no record of or relations with persons holding through Euroclear
participants.
Distributions for securities of a series held through Cedelbank or Euroclear
will be credited to the cash accounts of Cedelbank participants or Euroclear
participants in accordance with the relevant system's rules and procedures.
Distributions are subject to tax reporting in accordance with relevant United
States tax laws and regulations. The applicable prospectus supplement will
describe selected income tax consequences to foreign investors. Cedelbank or
the Euroclear Operator, will take any other action permitted to be taken by a
holder of securities under the applicable Indenture, warrant agreement or unit
agreement on behalf of a Cedelbank participant or a Euroclear participant only
in accordance with its relevant rules and procedures and subject to its
respective depositary's ability to carry out those actions on its behalf
through DTC.
Although Cedelbank and Euroclear have established these procedures to
facilitate transfers of applicable securities among participants of DTC,
Cedelbank and Euroclear, they are under no obligation to perform or continue to
perform those procedures, and those procedures may be discontinued at any time.
29
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at
the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0330. You may also inspect our filings at
the regional offices of the SEC located at 7 World Trade Center, New York, New
York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 or over the Internet at the SEC's home page at
http://www.sec.gov. You can also inspect reports and other information we file
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005.
The SEC allows us to incorporate by reference the information we file with
it, which means:
. incorporated documents are considered part of this prospectus;
. we can disclose important information to you by referring you to those
documents; and
. information that we file with the SEC will automatically update and
supersede this incorporated information.
We incorporate by reference the documents listed below which were filed with
the SEC under the Exchange Act:
. our annual report on Form 10-K for the year ended December 31, 1998;
. our quarterly report on Form 10-Q for the period ended March 31, 1999;
. our current reports on Form 8-K dated January 19, 1999, February 2, 1999,
April 19, 1999, April 28, 1999, June 9, 1999, June 23, 1999, July 8, 1999
and July 23, 1999; and
. the description of our common stock which is contained in our registration
statement filed pursuant to Section 12 of the Exchange Act, as modified on
our current report on Form 8-K dated September 25, 1998.
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus:
. reports filed under Sections 13(a) and (c) of the Exchange Act;
. definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meetings; and
. any reports filed under Section 15(d) of the Exchange Act.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
position and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address:
John E. Mack
Senior Vice President
Bank of America Corporation
Corporate Treasury Division
NC1-007-23-01
100 North Tryon Street
Charlotte, North Carolina 28255
(704) 386-5972
30
FORWARD-LOOKING STATEMENTS
This prospectus and accompanying prospectus supplements contain or
incorporate statements that constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Those statements can be identified by the use of forward-looking language
such as "will likely result," "may," "are expected to," "is anticipated,"
"estimate," "projected," "intends to," or other similar words. Our actual
results, performance or achievements could differ materially from the results
expressed in, or implied by, those forward-looking statements. Those statements
are subject to certain risks and uncertainties, including but not limited to,
certain risks described in the prospectus supplement. When considering those
forward-looking statements, you should keep in mind these risks, uncertainties
and other cautionary statements made in this prospectus and the prospectus
supplement. You should not place undue reliance on any forward-looking
statement which speaks only as of the date made.
LEGAL OPINIONS
The legality of the securities will be passed upon for us by Smith Helms
Mulliss & Moore, L.L.P., Charlotte, North Carolina, and for the underwriters or
agents by Stroock & Stroock & Lavan LLP, New York, New York. As of the date of
this prospectus, certain members of Smith Helms Mulliss & Moore, L.L.P.,
beneficially owned approximately 160,000 shares of our common stock.
EXPERTS
Our consolidated financial statements incorporated by reference to our
Annual Report on Form 10-K for the year ended December 31, 1998 have been
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
auditing and accounting.
31
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You should rely only on the information incorporated by reference or provided
in this global prospectus supplement and the attached prospectus. We have not
authorized anyone to provide you with different information. We are not
offering the securities in any jurisdiction where the offer is not permitted.
You should not assume that the information in this global prospectus supplement
and the attached prospectus is accurate as of any date other than the date on
the front of this document.
Our affiliates, including Banc of America Securities LLC, will deliver this
global prospectus supplement and the attached prospectus for offers and sales
in the secondary market.
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[LOGO] BANK OF AMERICA
$1,000,000,000
6 1/4% Senior Notes,
due 2012
-----------------
GLOBAL PROSPECTUS SUPPLEMENT
-----------------
Banc of America Securities LLC
Barclays Capital
Bear, Stearns & Co. Inc.
Credit Suisse First Boston
Goldman, Sachs & Co.
Guzman & Company
Lehman Brothers
Merrill Lynch & Co.
RBC Capital Markets
Salomon Smith Barney
UBS Warburg
Utendahl Capital Partners, L.P.
April 17, 2002
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