0000910473-95-000046.txt : 19950825
0000910473-95-000046.hdr.sgml : 19950825
ACCESSION NUMBER: 0000910473-95-000046
CONFORMED SUBMISSION TYPE: 424B5
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 19950824
SROS: NYSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: WELLS FARGO & CO
CENTRAL INDEX KEY: 0000105598
STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021]
IRS NUMBER: 132553920
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 424B5
SEC ACT: 1933 Act
SEC FILE NUMBER: 033-60573
FILM NUMBER: 95566601
BUSINESS ADDRESS:
STREET 1: 420 MONTGOMERY ST
CITY: SAN FRANCISCO
STATE: CA
ZIP: 94163
BUSINESS PHONE: 4154771000
MAIL ADDRESS:
STREET 1: 343 SANSOME ST 3RD FL
STREET 2: WELLS FARGO BANK
CITY: SAN FRANCISCO
STATE: CA
ZIP: 94163
424B5
1
PROSPECTUS SUPPLEMENT
(To Prospectus dated August 8, 1995) [WFC LOGO of stagecoach
pulled by team of horses]
$2,335,000,000
Wells Fargo & Company
Medium-Term Notes and Subordinated Medium-Term Notes, Series B
Due from 9 Months to 12 Years from Date of Issue
---------------------------
Wells Fargo & Company (the "Company") is offering by
this Prospectus Supplement two series of notes, its Medium-Term
Notes ("Senior Notes") and Subordinated Medium-Term Notes, Series
B ("Subordinated Notes") (together, the "Notes") in an aggregate
principal amount of up to $2,335,000,000 or the equivalent
thereof in other currencies or composite currencies, subject to
possible reduction as a result of the sale of other debt
securities or preferred stock of the Company. See "Description of
Medium-Term Notes" and "Plan of Distribution." Senior Notes will
rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company and Subordinated Notes will be
subordinated as described under "Description of
Notes-Subordination of Subordinated Notes" in the Prospectus to
which this Prospectus Supplement relates. Unless otherwise
indicated in the applicable Pricing Supplement to this Prospectus
Supplement (a "Pricing Supplement"), the Interest Payment Dates
for Fixed Rate Notes will be each April 1 and October 1. Interest
Payment Dates for Floating Rate Notes will be set forth in the
applicable Pricing Supplement. Each Note will mature on a day
from 9 months to 12 years from the Original Issuance Date (as
defined herein), as set forth on the face of such Note, and may
be subject to optional redemption by the Company, or obligate the
Company to redeem or purchase such Note pursuant to a sinking
fund or analogous provisions or at the option of the holder
thereof, in each case as indicated in the applicable Pricing
Supplement. The Notes will be issued only in denominations of
$1,000 and integral multiples of $1,000 in excess thereof.
Each Note will be issued only in fully registered form
and will be represented by either a Global Security (as defined
herein) registered in the name of The Depository Trust Company,
as Depositary (a "Book-Entry Note") or a nominee of the
Depositary, or a certificate issued in definitive form (a
"Certificated Note"), as set forth in the applicable Pricing
Supplement. Beneficial interests in Book-Entry Notes will be
shown on, and transfers thereof will be effected only through,
the records maintained by the Depositary's participants. Except
as described in "Description of Medium-Term Notes-Book-Entry
Notes," owners of beneficial interests in Book-Entry Notes will
not be entitled to receive Notes in definitive form and will not
be considered the holders thereof.
The specific designation, ranking as senior or
subordinated debt, aggregate principal amount, interest rate or
interest rate formula, if any, issue price, Earliest Redemption
Date, if any, Stated Maturity and any additional information for
each Note will be established by the Company at the Original
Issuance Date of such Note and will be indicated in an
accompanying Pricing Supplement. Unless otherwise indicated in
the applicable Pricing Supplement, the Notes, except Zero- Coupon
Notes, will bear interest at a fixed rate or at a rate or rates
determined by reference to LIBOR, the Treasury Rate, the
Commercial Paper Rate, the Prime Rate, the CD Rate, the CMT Rate,
the Federal Funds Effective Rate, or the Eleventh District Cost
of Funds Rate (each as defined herein), as adjusted by a Spread
and/or Spread Multiplier (each as defined herein), if any is
applicable to such Notes. Zero-Coupon Notes will be issued at a
discount from the principal amount payable at maturity thereof,
but holders of Zero-Coupon Notes will not receive periodic
payments of interest on such Notes. Payment of principal of the
Subordinated Notes may be accelerated only in the case of certain
events of bankruptcy, insolvency or reorganization of the Company
or Wells Fargo Bank, National Association (the "Bank"). There is
no right of acceleration in the case of a default in the
performance of any covenant with respect to the Subordinated
Notes, including a default in the
payment of interest or principal.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
TO WHICH IT RELATES. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE NOTES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT ARE UNSECURED
DEBT OBLIGATIONS OF WELLS FARGO & COMPANY AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
==============================================================================================================
PRICE AGENTS' PROCEEDS TO
TO PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
--------------------------------------------------------------------------------------------------------------
Per Note............ 100% .125%-.625% 99.875%-99.375%
--------------------------------------------------------------------------------------------------------------
Total(4)............. $2,335,000,000 $2,918,750-$14,593,750 $2,332,081,250-$2,320,406,250
==============================================================================================================
(1) Unless otherwise specified in a Pricing Supplement, Notes
will be issued at 100% of their principal amount.
(2) The Company will pay Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, CS First Boston Corporation,
Goldman, Sachs & Co., Lehman Brothers, Lehman Brothers Inc.
(including its affiliate Lehman Government Securities Inc.),
Morgan Stanley & Co. Incorporated or Salomon Brothers Inc (the
"Agents") a commission ranging from .125% to .625% of the
principal amount of any Note, depending on maturity, sold through
such Agent. The Company also may sell Notes to any Agent for
resale to investors or other purchasers at varying prices related
to prevailing market prices at the time of resale to be
determined by such Agent or, if so agreed, at a fixed public
offering price. Unless otherwise specified in the applicable
Pricing Supplement, any Note sold to an Agent as principal will
be purchased by such Agent at a price equal to 100% of the
principal amount thereof less a percentage equal to the
commission applicable to an agency sale of a Note of identical
maturity, and may be resold by such Agent. The Company has agreed
to indemnify the Agents against certain liabilities, including
certain liabilities under the Securities Act of 1933.
(3) Assuming that the Notes are issued at 100% of principal
amount and before deducting expenses payable by the Company
estimated at $1,802,000.
(4) Or the equivalent thereof in other currencies or composite
currencies.
---------------------------
The Notes may be offered by the Company through the Agents,
each of which has agreed to use best efforts to solicit offers to
purchase the Notes. The Company also may sell Notes to any Agent
acting as principal for resale to one or more purchasers. The
Notes may also be sold by the Company or an affiliate of the
Company directly to purchasers on behalf of the Company in those
jurisdictions where it is authorized to do so. The Notes will not
be listed on any securities exchange, and there can be no
assurance that the Notes offered by this Prospectus Supplement
will be sold or that there will be a secondary market for the
Notes. The Company reserves the right to withdraw, cancel or
modify the offer or solicitations of offers made hereby without
notice. The Company or any Agent, if it solicits such offer, may
reject any offer to purchase Notes, in whole or in part. See
"Plan of Distribution."
---------------------------
Merrill Lynch & Co.
CS First Boston
Goldman, Sachs & Co.
Lehman Brothers
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
---------------------------
The date of this Prospectus Supplement is August 24, 1995.
IN CONNECTION WITH THIS OFFERING, ANY AGENT MAY OVERALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE NOTES OR OTHER DEBT SECURITIES OF THE COMPANY AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF MEDIUM-TERM NOTES
GENERAL
The following description of the particular
terms of the Notes offered hereby supplements, and to the extent
inconsistent therewith replaces, the description of the general
terms and provisions of Notes set forth under the heading
"Description of Notes" in the accompanying Prospectus, to which
description reference is hereby made. Capitalized terms not
defined herein have the meanings assigned to such terms in the
Prospectus.
At the option of the Company, the Notes may be
issued as Medium-Term Notes which constitute senior debt
securities ("Senior Notes") and as Subordinated Medium-Term
Notes, Series B which constitute subordinated debt securities
("Subordinated Notes") (together the "Notes"). The Senior Notes,
an additional $1,279,325,000 of which have been previously issued
under separate Prospectuses and are outstanding as of the date of
this Prospectus Supplement, constitute a single series of debt
securities under the Senior Indenture (as defined below) and will
be issued under an Indenture, dated as of September 1, 1984, as
amended by the First Supplemental Indenture dated as of April 15,
1986, the Second Supplemental Indenture dated as of June 30,
1987, and the Third Supplemental Indenture dated as of January
23, 1991 (together, the "Senior Indenture"), between the Company
and Chemical Bank, as successor Trustee (the "Senior Trustee").
The Subordinated Notes, none of which has been previously issued,
will be issued under an Indenture dated as of December 10, 1992
(the "Subordinated Indenture"), between the Company and Marine
Midland Bank, as Trustee (the "Subordinated Trustee"). In this
Prospectus Supplement, the Senior Indenture and the Subordinated
Indenture are referred to as the "Indentures." The Senior Trustee
and the Subordinated Trustee are referred to as the "Trustees."
The Indentures do not limit the amount of debt securities which
can be issued thereunder and provide that debt securities of any
series may be issued thereunder up to the aggregate principal
amount which may be authorized from time to time by the Company.
The terms of Notes, including applicable interest rates, maturity
dates and repayment or redemption provisions, may vary as
provided in the applicable Pricing Supplement.
Senior Notes will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company and
Subordinated Notes will be subordinated as described under
"Description of Notes-Subordination of Subordinated Notes" in the
Prospectus. Payment of the principal of the Subordinated Notes
may be accelerated only in the case of certain events of
bankruptcy, insolvency or reorganization of the Company or the
Bank. There is no right of acceleration in the case of a default
in the performance of any covenant with respect to the
Subordinated Notes, including a default in the payment of
interest or principal. See "Description of Notes-Events of
Default" in the Prospectus.
Each Note will mature on a day from 9 months to
12 years from its date of issue (the "Original Issuance Date"),
as selected by the initial purchaser and agreed to by the Company
("Stated Maturity"). The Notes will be issuable only in fully
registered form in denominations of $1,000 and integral multiples
of $1,000 in excess thereof.
Each Note will be issued initially as either a
Book-Entry Note or a Certificated Note. See "Book-Entry Notes."
S-2
Payments of principal and premium, if any, and
interest payable at the Stated Maturity or at any earlier
Redemption Date or Repayment Date (as defined below) on Senior
and Subordinated Notes will be made in immediately available
funds at the principal corporate trust office of Chemical Bank,
as paying agent, in the Borough of Manhattan, The City of New
York, or Chemical Trust Company of California, as paying agent,
in the City and County of San Francisco, California (each, a
"Paying Agent"), provided that the Note is presented to a Paying
Agent in time for such Paying Agent to make such payments in such
funds in accordance with its normal procedures. For interest
payments on Notes of U.S. $5,000,000 or more in principal amount,
the holder of such Notes may elect at any time to have payment
made in immediately available funds. Interest payments on Notes
of less than U.S. $5,000,000 in principal amount will be made in
immediately available funds only if agreed to on a case-by-case
basis by the Company and otherwise will be made by check mailed
on the Interest Payment Date to the registered holder thereof
(which, in the case of Book-Entry Notes, will be a nominee of the
Depositary), except that interest payments made at any Redemption
Date, Repayment Date or at the Stated Maturity will be made as
described above. Interest payments on Notes will not be made in
immediately available funds unless written instructions have been
presented to a Paying Agent at least 15 days prior to the Regular
Record Date from and after which a holder has elected to receive
payments in immediately available funds. The Notes may be
presented for registration of transfer or exchange at the offices
or agencies to be maintained by the Company in the City and
County of San Francisco, California and in the Borough of
Manhattan, The City of New York, State of New York.
FOREIGN CURRENCIES
Unless otherwise indicated in the applicable
Pricing Supplement, the Notes will be denominated in U.S. dollars
and payments of principal of, premium, if any, and interest on
the Notes will be made in U.S. dollars. If any of the Notes are
to be denominated in a currency, including a composite currency,
other than U.S. dollars or if the principal of, premium, if any,
or interest on any of the Notes is to be payable at the option of
the holder or the Company in a currency, including a composite
currency, other than that in which such Note is denominated, the
applicable Pricing Supplement will provide additional disclosure
pertaining to the terms of such Notes and other matters of
interest to the holders thereof.
INTEREST
Each Note, except a Zero-Coupon Note (as
defined below), will bear interest from the Original Issuance
Date or, if later, from the most recent Interest Payment Date to
which interest on such Note (or one or more predecessor Notes, in
exchange for or upon transfer of which such Note was issued
between the Regular Record Date for payment of such interest and
such Interest Payment Date) has been paid or duly provided for at
the fixed interest rate per annum, or at the interest rate per
annum determined pursuant to the interest rate formula, set forth
therein and in the applicable Pricing Supplement, until the
principal thereof is paid or made available for payment. Unless
otherwise indicated in the applicable Pricing Supplement, the
Interest Payment Dates for the Fixed Rate Notes (as defined
below) will be April 1 and October 1 and the Interest Payment
Dates for the Floating Rate Notes (as defined below) are as set
forth below. Interest on a Note will also be paid on the Stated
Maturity or on any earlier Redemption Dates or Repayment Dates
(but only as to the principal due on such earlier dates).
Interest payable on any Note on an Interest Payment Date will be
payable to the person in whose name such Note (or one or more
predecessor Notes in exchange for or upon transfer of which such
Note was issued between the Regular Record Date for payment of
such interest and such Interest Payment Date), is registered at
the close of business on the Regular Record Date for payment of
such interest; provided, however, that interest payable on a Note
at Stated Maturity or, if applicable, upon earlier redemption or
repayment, will be payable to the person to whom principal is
paid. The first payment of interest on any Note originally issued
between a Regular Record Date and an Interest Payment Date will
be made on the Interest Payment Date following the next
succeeding Regular Record Date to the registered holder at the
close of business on such next succeeding Regular Record Date.
Unless otherwise indicated in the applicable Pricing Supplement,
the "Regular Record Date" with respect to Floating Rate Notes
shall be the date 15 calendar days
S-3
prior to each Interest Payment Date, whether or not such date
shall be a Business Day (as defined below). Unless otherwise
indicated in the applicable Pricing Supplement, the Regular
Record Dates with respect to the Fixed Rate Notes shall be March
15 and September 15 next preceding the April 1 and October 1
Interest Payment Date.
Interest rates, or interest rate formulas, are
subject to change by the Company from time to time, but no such
change will affect the interest rate or interest rate formula on
any Note already issued or as to which an offer to purchase has
been accepted by the Company.
Interest rates offered by the Company with
respect to the Notes may differ depending upon, among other
things, the aggregate principal amount of the Notes purchased in
any single transaction.
Each Note, except a Zero-Coupon Note, will bear
interest at either (a) a fixed rate or rates (a "Fixed Rate
Note") or (b) a variable rate or rates determined by reference to
an interest rate formula (a "Floating Rate Note"), which may be
adjusted by adding or subtracting the Spread and/or multiplying
by the Spread Multiplier (each term as defined below), if
specified in the applicable Pricing Supplement. A "Zero Coupon
Note" is a Note that provides for the periodic accretion of
principal instead of the payment of interest, and that is offered
at a discount from the principal amount thereof. A Floating Rate
Note may also have either or both of the following: (a) a maximum
numerical interest rate limitation, or ceiling, on the rate of
interest which may accrue during any interest period and (b) a
minimum numerical interest rate limitation, or floor, on the rate
of interest which may accrue during any interest period;
provided, however, that in no event shall the interest rate on
any Floating Rate Note be greater than the maximum interest rate
permitted by applicable law. The "Spread" is the number of basis
points specified in the applicable Pricing Supplement as being
applicable to the interest rate for such Floating Rate Note and
the "Spread Multiplier" is the percentage specified in the
applicable Pricing Supplement as being applicable to the interest
rate for such Floating Rate Note. "Business Day" means (a) with
respect to any Note, any day which is not a Saturday or Sunday
and which, in the City of San Francisco or The City of New York,
is neither a legal holiday nor a day on which banking
institutions are authorized by law or regulation to close, and
(b) with respect to LIBOR Notes only, any such day on which
dealings in deposits in U.S. dollars are transacted in the London
interbank market (a "London Business Day"). "Index Maturity"
means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest
rate formula is based, as specified in the applicable Pricing
Supplement.
The applicable Pricing Supplement relating to a
Fixed Rate Note will designate the rate of interest per annum
payable on such Fixed Rate Note. The applicable Pricing
Supplement relating to a Floating Rate Note will designate an
interest rate basis (the "Interest Rate Basis") for such Floating
Rate Note. The Interest Rate Basis may be: (a) the Commercial
Paper Rate, in which case such Note will be a Commercial Paper
Rate Note, (b) the Prime Rate, in which case such Note will be a
Prime Rate Note, (c) LIBOR, in which case such Note will be a
LIBOR Note, (d) the Treasury Rate, in which case such Note will
be a Treasury Rate Note, (e) the Certificate of Deposit Rate ("CD
Rate"), in which case such Note will be a CD Rate Note, (f) the
CMT Rate ("CMT Rate"), in which case such Note will be a CMT Rate
Note, (g) the Federal Funds Effective Rate, in which case such
Note will be a Federal Funds Rate Note, (h) the Eleventh District
Cost of Funds Rate, in which case such Note will be an Eleventh
District Cost of Funds Rate Note, or (i) such other interest rate
formula as is set forth in such Pricing Supplement. The
applicable Pricing Supplement for a Floating Rate Note will
specify, if applicable: the Spread and/or Spread Multiplier, the
Initial Interest Rate (as defined below), the Index Maturity, the
Interest Reset Frequency (as defined below), and the maximum or
minimum interest rate limitation applicable to such Floating Rate
Note. In addition, each Pricing Supplement will define or
particularize for each Note the following terms, if applicable:
Interest Payment Dates, Earliest Redemption Date, Repayment
Dates, the principal amount, the issue price, the Stated Maturity
and any redemption premium.
The rate of interest on each Floating Rate Note
will be reset daily, weekly, monthly, quarterly, semi-annually or
annually (each an "Interest Reset Date"), as specified in the
applicable Pricing Supplement (the
S-4
frequency with which the rate of interest on any Floating Rate
Note will be reset is hereinafter called the "Interest Reset
Frequency"). Unless otherwise specified in the applicable Pricing
Supplement, the Interest Reset Dates will be, in the case of
Floating Rate Notes which reset daily, each Business Day; in the
case of Floating Rate Notes (other than Treasury Rate Notes)
which reset weekly, the Wednesday of each week; in the case of
Treasury Rate Notes which reset weekly, the Tuesday of each week
(except as set forth in the penultimate sentence of the second
succeeding paragraph below); in the case of Floating Rate Notes
which reset monthly (other than Eleventh District Cost of Funds
Rate Notes), the third Wednesday of each month or, in the case of
Eleventh District Cost of Funds Rate Notes, all of which reset
monthly, the first calendar day of each month; in the case of
Floating Rate Notes which reset quarterly, the third Wednesday of
March, June, September and December; in the case of Floating Rate
Notes which reset semi-annually, the third Wednesday of two
months of each year that are six months apart, as specified in
the applicable Pricing Supplement; and in the case of Floating
Rate Notes which reset annually, the third Wednesday of one month
of each year, as specified in the applicable Pricing Supplement;
provided, however, that the interest rate in effect from the
Original Issuance Date to the first Interest Reset Date with
respect to a Floating Rate Note will be the Initial Interest
Rate. If any Interest Reset Date for any Floating Rate Note would
otherwise be a day that is not a Business Day for such Floating
Rate Note, the Interest Reset Date for such Floating Rate Note
shall be postponed to the next day that is a Business Day for
such Floating Rate Note, except that in the case of a LIBOR Note,
if such Business Day is in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding
Business Day.
"Initial Interest Rate" means the rate at which
a Floating Rate Note will bear interest from its Original
Issuance Date to the first Interest Reset Date, as indicated in
the applicable Pricing Supplement. Interest on Floating Rate
Notes will be calculated on the basis of actual days elapsed and
a year of 360 days, except that interest on Treasury Rate Notes
and CMT Rate Notes will be calculated on the basis of the actual
number of days in the year.
The Interest Determination Date pertaining to
an Interest Reset Date for (a) a Commercial Paper Rate Note (the
"Commercial Paper Interest Determination Date"), (b) a Prime Rate
Note (the "Prime Rate Interest Determination Date"), (c) a CD
Rate Note (the "CD Interest Determination Date"), (d) a CMT Rate
Note (the "CMT Rate Interest Determination Date") and (e) a
Federal Funds Rate Note (the "Federal Funds Interest
Determination Date") will be the second Business Day preceding
the Interest Reset Date with respect to such Note. The Interest
Determination Date pertaining to an Interest Reset Date for an
Eleventh District Cost of Funds Rate Note ("the Eleventh District
Cost of Funds Rate Interest Determination Date") will be the last
working day of the month immediately preceding such Interest
Reset Date on which the Federal Home Loan Bank of San Francisco
(the "FHLB of San Francisco") publishes the Index (as defined
below under "Eleventh District Cost of Funds Rate Note"). The
Interest Determination Date pertaining to an Interest Reset Date
for a LIBOR Note (the "LIBOR Interest Determination Date") will
be the second London Business Day preceding such Interest Reset
Date. The Interest Determination Date pertaining to an Interest
Reset Date for a Treasury Rate Note (the "Treasury Interest
Determination Date") will be the day of the week in which such
Interest Reset Date falls on which Treasury bills would normally
be auctioned. Treasury bills are usually sold at auction on
Monday of each week, unless that day is a legal holiday, in which
case the auction is usually held on the following Tuesday, except
that such auction may be held on the preceding Friday. If, as the
result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Treasury Interest Determination
Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date shall fall on any Interest
Reset Date for a Treasury Rate Note, then such Interest Reset
Date shall instead be the first Business Day immediately
following such auction date. Any of the terms set forth in this
paragraph may be varied in a Pricing Supplement.
Unless otherwise indicated in the applicable
Pricing Supplement and except as provided below, interest will be
payable, in the case of Floating Rate Notes which reset daily,
weekly or monthly (except for Eleventh District Cost of Funds
Rate Notes), on the third Wednesday of each month or on the third
Wednesday
S-5
of March, June, September and December of each year (as indicated
in the applicable Pricing Supplement); in the case of Eleventh
District Cost of Funds Rate Notes, which reset monthly, on the
first Business Day of each month or the first Business Day of
March, June, September and December as specified in the
applicable Pricing Supplement; in the case of Floating Rate Notes
which reset quarterly, on the third Wednesday of March, June,
September and December of each year; in the case of Floating Rate
Notes which reset semi-annually, on the third Wednesday of the
two months of each year specified in the applicable Pricing
Supplement; and in the case of Floating Rate Notes which reset
annually, on the third Wednesday of the month specified in the
applicable Pricing Supplement (each an "Interest Payment Date"),
and in each case, at any Redemption Date, Repayment Date or
Stated Maturity. If an Interest Payment Date with respect to any
Floating Rate Note (other than an Interest Payment Date that
falls on a Redemption Date or a Repayment Date with respect to
the principal amount due and payable on such date, and other than
an Interest Payment Date which falls on the Stated Maturity)
would otherwise fall on a day that is not a Business Day with
respect to such Note, the Interest Payment Date will be postponed
to the following day that is a Business Day with respect to such
Note, except that in the case of a LIBOR Note, if such Business
Day falls in the next calendar month, such Interest Payment Date
will be the preceding day that is a Business Day with respect to
such LIBOR Note.
Interest payments shall be for the amount of
interest accrued to, but excluding, the Interest Payment Date.
With respect to any Floating Rate Note, accrued interest from the
Original Issuance Date or from the last date to which interest
has been paid is calculated by multiplying the principal amount
of such Floating Rate Note by an accrued interest factor. Such
accrued interest factor is computed by adding the interest factor
calculated for each day from the Original Issuance Date, or from
the last date to which interest has been paid, to the date for
which accrued interest is being calculated. The interest factor
(expressed as a decimal and rounded upwards if five
one-millionths or more of a percentage point and rounded
downwards if less than five one-millionths of a percentage point,
if necessary, to the next higher or lower, as the case may be,
one hundred- thousandth of a percentage point (e.g., 9.876545% or
.09876545 being rounded to 9.87655% or .0987655, respectively))
for each such day is computed by dividing the interest rate
(expressed as a decimal rounded upwards if five one-millionths or
more of a percentage point and downwards if less than five
one-millionths of a percentage point, if necessary, to the next
higher or lower, as the case may be, one hundred-thousandth of a
percentage point) applicable to such date by 360, in the case of
Commercial Paper Rate Notes, Prime Rate Notes, LIBOR Notes, CD
Rate Notes, Federal Funds Rate Notes or Eleventh District Cost of
Funds Rate Notes, or by the actual number of days in the year, in
the case of CMT Rate Notes and Treasury Rate Notes. All dollar
amounts used in or resulting from such calculation on Floating
Rate Notes will be rounded to the nearest cent (with one-half
cent being rounded upwards). Any of the terms set forth in this
paragraph may be varied in a Pricing Supplement.
Unless otherwise provided in the applicable
Pricing Supplement, the Senior Trustee initially will be the
calculation agent (the "Calculation Agent") with respect to the
Floating Rate Notes issued under both the Senior Indenture and
the Subordinated Indenture. The Company, at a later date, may
choose to have the Bank or any other person serve as the
Calculation Agent. Upon the request of the registered holder of
any Floating Rate Note, the Calculation Agent will provide the
interest rate then in effect, and, if different, the interest
rate which will become effective as a result of a determination
made on the most recent Interest Determination Date with respect
to such Floating Rate Note.
Any payment of principal, premium, if any, or
interest required to be made on an Interest Payment Date, any
Redemption Date or Repayment Date or at the Stated Maturity of a
Fixed Rate Note which is not a Business Day need not be made on
such day, and any payment of principal, premium, if any, or
interest required to be made on any Redemption Date or Repayment
Date or at the Stated Maturity of a Floating Rate Note which is
not a Business Day need not be made on such day, but in each such
case such payment may be made on the next succeeding Business Day
with the same force and effect as if made on the Interest Payment
Date, Redemption Date or Repayment Date or the Stated Maturity,
as the case may be, and no interest shall
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accrue for the period from and after such Interest Payment Date,
Redemption Date or Repayment Date or the Stated Maturity.
Unless otherwise specified in an applicable
Pricing Supplement, the "Interest Calculation Date," where
applicable, pertaining to any Interest Determination Date will be
the earlier of (a) the tenth calendar day after such Interest
Determination Date, or, if any such day is not a Business Day,
the next succeeding Business Day, or (b) the Business Day
preceding the applicable Interest Payment Date, Redemption Date,
Repayment Date or Stated Maturity, as the case may be.
Fixed Rate Notes
Each Fixed Rate Note will bear interest from
the Original Issuance Date at the annual rate or rates stated on
the face thereof. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Payment Dates for a Fixed Rate
Note will be April 1 and October 1 of each year. Unless otherwise
specified in the applicable Pricing Supplement, the Regular
Record Dates for any regular payment of interest on any Interest
Payment Date will be the March 15 or September 15, as the case
may be (whether or not a Business Day), next preceding such
Interest Payment Date. Interest on Fixed Rate Notes will be
calculated on the basis of a 360-day year of twelve 30-day
months.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest
at the interest rates (calculated with reference to the
Commercial Paper Rate and the Spread and/or Spread Multiplier, if
any), and will be payable on the dates, specified on the face of
the Commercial Paper Rate Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable
Pricing Supplement, "Commercial Paper Rate" means, with respect
to each Commercial Paper Interest Determination Date, the Money
Market Yield (calculated as described below) of the rate on such
date for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement as published by the Board of
Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates" or any successor publication
of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper." In the event
that such rate is not published prior to 3:00 P.M. New York City
time, on the Interest Calculation Date pertaining to such
Commercial Paper Interest Determination Date, then the Commercial
Paper Rate shall be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper
having the Index Maturity specified in the applicable Pricing
Supplement as published by the Federal Reserve Bank of New York
in its daily statistical release, "Composite 3:30 P.M. Quotations
for U.S. Government Securities" ("Composite Quotations") under
the heading "Commercial Paper." If by 3:00 P.M., New York City
time, on such Interest Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, the rate
for that Commercial Paper Interest Determination Date shall be
calculated by the Calculation Agent and shall be the Money Market
Yield of the arithmetic mean (rounded to the nearest one
hundred-thousandth of a percentage point) of the offered rates,
as of 11:00 A.M., New York City time, on that Commercial Paper
Interest Determination Date, of three leading dealers of
commercial paper in The City of New York selected by the
Calculation Agent (which, if other than the Company or the Bank,
shall be selected by the Calculation Agent after consultation
with the Company) for commercial paper of the Index Maturity
specified in the applicable Pricing Supplement placed for an
industrial issuer whose bond rating is "AA," or the equivalent,
from a nationally recognized rating agency; provided, however,
that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate then in
effect on such Commercial Paper Interest Determination Date.
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"Money Market Yield" shall be a yield
(expressed as a percentage rounded to the next higher one
hundred-thousandth of a percentage point) calculated in
accordance with the following formula:
D x 360
Money Market Yield = _____________ x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal; and
"M" refers to the actual number of days in the interest period
for which interest is being calculated.
Prime Rate Notes
Prime Rate Notes will bear interest at the
interest rates (calculated with reference to the Prime Rate and
the Spread and/or Spread Multiplier, if any), and will be payable
on the dates, specified on the face of the Prime Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable
Pricing Supplement, "Prime Rate" means, with respect to any Prime
Rate Interest Determination Date, the rate set forth on such date
in H.15(519) under the heading "Bank Prime Loan." In the event
that such rate is not published prior to 9:00 A.M., New York City
time, on the Interest Calculation Date pertaining to such Prime
Rate Interest Determination Date, then the Prime Rate will be
determined by the Calculation Agent and will be the arithmetic
mean of the rates of interest publicly announced by each bank
that appear on the Reuters Screen NYMF Page (as defined below) as
such bank's prime rate or base lending rate as in effect for that
Prime Rate Interest Determination Date. If fewer than four such
rates but more than one such rate appear on the Reuters Screen
NYMF Page for the Prime Rate Interest Determination Date, the
Prime Rate will be determined by the Calculation Agent and will
be the arithmetic mean of the prime rates quoted on the basis of
the actual number of days in the year divided by a 360-day year
as of the close of business on such Prime Rate Interest
Determination Date by three, or two if only two such rates are
quoted, major money center banks in The City of New York selected
by the Calculation Agent (which, if other than the Company or the
Bank, shall be selected by the Calculation Agent after
consultation with the Company). If fewer than two such rates
appear on the Reuters Screen NYMF Page, the Prime Rate will be
determined by the Calculation Agent on the basis of the rates
furnished in The City of New York by three, or two if only two
such rates are quoted, substitute banks or trust companies
organized and doing business under the laws of the United States,
or any State thereof, having total equity capital of at least
U.S. $500,000,000 and being subject to supervision or examination
by federal or state authority, selected by the Calculation Agent
(which, if other than the Company or the Bank, shall be selected
by the Calculation Agent after consultant with the Company) to
provide such rate or rates; provided, however, that if fewer than
two such substitute banks or trust companies selected as
aforesaid are quoting as mentioned in this sentence, the Prime
Rate will remain the Prime Rate in effect on such Prime Rate
Interest Determination Date. "Reuters Screen NYMF Page" means the
display designated as page "NYMF" on the Reuters Monitor Money
Rates Service (or such other page as may replace the NYMF page on
that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
LIBOR Notes
"LIBOR" Notes will bear interest at the
interest rates (calculated with reference to LIBOR and the Spread
and/or Spread Multiplier, if any), and will be payable on the
dates, specified on the face of the LIBOR Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable
Pricing Supplement, LIBOR will be determined by the Calculation
Agent in accordance with the following provisions:
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(a) With respect to any LIBOR Interest
Determination Date, either, as specified in the
applicable Pricing Supplement: (i) the
arithmetic mean of the offered rates for
deposits in U.S. dollars for the period of the
Index Maturity specified in the applicable
Pricing Supplement, commencing on the second
London Business Day immediately following such
LIBOR Interest Determination Date, which appear
on the Reuters Screen LIBO Page as of 11:00
A.M., London time, on the LIBOR Interest
Determination Date, if at least two such
offered rates appear on the Reuters Screen LIBO
Page ("LIBOR Reuters"), or (ii) the rate for
deposits in U.S. dollars having the Index
Maturity designated in the applicable Pricing
Supplement, commencing on the second London
Business Day immediately following that LIBOR
Interest Determination Date, that appears on
the Telerate Page 3750 as of 11:00 A.M., London
time, on that LIBOR Interest Determination Date
("LIBOR Telerate"). Unless otherwise indicated
in the applicable Pricing Supplement, "Reuters
Screen LIBO Page" means the display designated
as Page "LIBO" on the Reuters Monitor Money
Rate Service (or such other page as may replace
the LIBO page on that service for the purpose
of displaying London interbank offered rates of
major banks). "Telerate Page 3750" means the
display designated as page "3750" on the
Telerate Service (or such other page as may
replace the 3750 page on that service or such
other service or services as may be nominated
by the British Bankers' Association for the
purpose of displaying London interbank offered
rates for U.S. dollar deposits). If neither
LIBOR Reuters nor LIBOR Telerate is specified
in the applicable Pricing Supplement, LIBOR
will be determined as if LIBOR Telerate had
been specified. If fewer than two offered rates
appear on the Reuters Screen LIBO Page, or if
no rate appears on the Telerate Page 3750, as
applicable, LIBOR in respect of that LIBOR
Interest Determination Date will be determined
as if the parties had specified the rate
described in (b) below.
(b) With respect to a LIBOR Interest
Determination Date on which fewer than two
offered rates appear on the Reuters Screen LIBO
Page, as described in (a)(i) above, or on which
no rate appears on the Telerate Page 3750, as
specified in (a)(ii) above, as applicable,
LIBOR will be determined on the basis of the
rates at which deposits in U.S. dollars having
the Index Maturity designated in the applicable
Pricing Supplement are offered at approximately
11:00 A.M., London time, on such LIBOR Interest
Determination Date by four major banks
("Reference Banks") in the London interbank
market selected by the Calculation Agent
(which, if other than the Company or the Bank,
shall be selected by the Calculation Agent
after consultation with the Company) to prime
banks in the London interbank market commencing
on the second London Business Day immediately
following such LIBOR Interest Determination
Date and in a principal amount of not less than
U.S. $1,000,000 that is representative for a
single transaction in such market at such time.
The Calculation Agent will request the
principal London office of each of the
Reference Banks to provide a quotation of its
rate. If at least two such quotations are
provided, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean
(rounded to the nearest one hundred-thousandth
of a percentage point) of such quotations. If
fewer than two quotations are provided, LIBOR
for such LIBOR Interest Determination Date will
be the arithmetic mean (rounded to the nearest
one hundred-thousandth of a percentage point)
of the rates quoted at approximately 11:00
A.M., New York City time, on such LIBOR
Interest Determination Date by three major
banks in The City of New York selected by the
Calculation Agent (which, if other than the
Company or the Bank, shall be selected by the
Calculation Agent after consultation with the
Company) for loans in U.S. dollars to leading
European banks having the specified Index
Maturity designated in the applicable Pricing
Supplement commencing on the second London
Business Day immediately following such LIBOR
Interest Determination Date and in a principal
amount equal to an amount of not less than U.S.
$1,000,000 that is representative for a single
transaction in such market at such time;
provided, however, that if the banks selected
as aforesaid by the
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Calculation Agent are not quoting as mentioned
in this sentence, LIBOR will be LIBOR then in
effect on such LIBOR Interest Determination
Date.
Treasury Rate Notes
Treasury Rate Notes will bear interest at the
interest rates (calculated with reference to the Treasury Rate
and the Spread and/or Spread Multiplier, if any) and will be
payable on the dates, specified on the face of the Treasury Rate
Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the Pricing
Supplement, "Treasury Rate" means, with respect to any Treasury
Interest Determination Date, the rate for the most recent auction
of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified in the applicable Pricing
Supplement as published in H.15(519) under the heading "U.S.
Government Securities-Treasury Bills/Auction Average
(Investment)" or, if not so published by 3:00 P.M., New York City
time, on the Interest Calculation Date pertaining to such
Treasury Interest Determination Date, the auction average rate
(expressed as a bond equivalent, rounded to the nearest one
hundred-thousandth of a percentage point, on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis)
for such auction as otherwise announced by the United States
Department of the Treasury. In the event that the results of the
auction of Treasury bills having the Index Maturity designated in
the applicable Pricing Supplement are not published or reported
as provided above by 3:00 P.M., New York City time, on such
Interest Calculation Date, or if no such auction is held in that
particular week, then the Treasury Rate shall be calculated by
the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent, rounded to the nearest one
hundred-thousandth of a percentage point, on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates as of
approximately 3:30 P.M., New York City time, on such Treasury
Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation
Agent (which, if other than the Company or the Bank, shall be
selected by the Calculation Agent after consultation with the
Company), for the issue of Treasury bills with a remaining
maturity closest to the specified Index Maturity; provided,
however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence,
the Treasury Rate will be the Treasury Rate in effect on such
Treasury Interest Determination Date.
CD Rate Notes
CD Rate Notes will bear interest at the
interest rate (calculated with reference to the CD Rate and the
Spread and/or Spread Multiplier, if any), and will be payable on
the dates, specified on the face of the CD Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable
Pricing Supplement, "CD Rate" means, with respect to any CD
Interest Determination Date, the rate on such date for negotiable
certificates of deposit having the Index Maturity specified in
the applicable Pricing Supplement as published in H.15(519) under
the heading "CDs (Secondary Market)." In the event that such rate
is not so published by 3:00 P.M., New York City time, on the
Interest Calculation Date pertaining to such CD Interest
Determination Date, the CD Rate will be the rate on such CD
Interest Determination Date for negotiable certificates of
deposit having the Index Maturity specified in the applicable
Pricing Supplement as published in Composite Quotations under the
heading "Certificates of Deposit." If such rate is neither
published in H.15(519) nor in Composite Quotations by 3:00 P.M.,
New York City time, on such Interest Calculation Date the CD Rate
for such CD Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean (rounded to the
nearest one hundred-thousandth of a percentage point) of the
secondary market offered rates as of 10:00 A.M., New York City
time, on such CD Interest Determination Date, of three leading
nonbank dealers of negotiable U.S. dollar certificates of deposit
in The City of New York selected by the Calculation Agent (which,
if other than the Company or the Bank, shall be selected by the
Calculation Agent after consultation with
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the Company) for negotiable certificates of deposit of major
United States money center banks (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the
Index Maturity indicated in the applicable Pricing Supplement in
a denomination of U.S. $5,000,000; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the CD Rate will be the CD
Rate in effect on such CD Interest Determination Date.
CMT Rate Notes
CMT Rate Notes will bear interest at the
interest rate (calculated with reference to the CMT Rate and the
Spread and/or Spread Multiplier, if any), and will be payable on
the dates, specified on the face of the CMT Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable
Pricing Supplement, "CMT Rate" means, with respect to any CMT
Rate Interest Determination Date, the rate displayed on the
Designated CMT Telerate Page under the caption " . . . Treasury
Constant Maturities . . . Federal Reserve Board Release H.15. . .
Mondays Approximately 3:45 P.M.," under the column for the
Designated CMT Maturity Index for (i) if the Designated CMT
Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page
is 7052, the rate for the week, or the month, as applicable,
ended immediately preceding the week in which the related CMT
Rate Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page, or if not displayed by
3:00 P.M., New York City time, on the related Interest
Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such Treasury Constant Maturity rate
for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published, or if
not published by 3:00 P.M., New York City time, on the related
Interest Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index (or other
United States Treasury rate for the Designated CMT Maturity
Index) for the CMT Rate Interest Determination Date with respect
to such Interest Reset Date as may then be published by either
the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed
on the Designated CMT Telerate Page and published in the relevant
H.15(519). If such information is not provided by 3:00 P.M., New
York City time, on the related Interest Calculation Date, then
the CMT Rate for the CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to
maturity, based on the arithmetic mean (rounded to the nearest
one hundred-thousandth of a percentage point) of the secondary
market closing offer side prices as of approximately 3:30 P.M.,
New York City time, on the CMT Rate Interest Determination Date
reported, according to their written records, by three leading
primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the
Calculation Agent (from five such Reference Dealers selected by
the Calculation Agent (which, if other than the Company or the
Bank, shall be selected by the Calculation Agent after
consultation with the Company) and eliminating the highest
quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed
rate obligations of the United States ("Treasury Notes") with an
original maturity of approximately the Designated CMT Maturity
Index and a remaining term to maturity of not less than such
Designated CMT Maturity Index minus one year. If the Calculation
Agent cannot obtain three such Treasury Note quotations, the CMT
Rate for such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to
maturity based on the arithmetic mean (rounded to the nearest one
hundred-thousandth of a percentage point) of the secondary market
offer side prices as of approximately 3:30 P.M., New York City
time, on the CMT Rate Interest Determination Date of three
Reference Dealers in The City of New York (from five such
Reference Dealers selected by the Calculation Agent (which, if
other than the Company or the Bank, shall be selected by the
Calculation Agent after consultation with the Company) and
eliminating the highest quotation (or, in the event of equality,
one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an
original maturity of the number of years that is the next highest
to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in
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an amount of at least $100 million. If three or four (and not
five) of such Reference Dealers are quoting as described above,
then the CMT Rate will be based on the arithmetic mean (rounded
to the nearest one hundred-thousandth of a percentage point) of
the offer prices obtained and neither the highest nor lowest of
such quotes will be eliminated; provided, however, that if fewer
than three Reference Dealers selected by the Calculation Agent
are quoting as described herein, the CMT Rate will be the CMT
Rate in effect on such CMT Rate Interest Determination Date. If
two Treasury Notes with an original maturity as described in the
third preceding sentence have remaining terms to maturity equally
close to the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity will be
used.
"Designated CMT Telerate Page" means the
display on the Dow Jones Telerate Service on the page designated
in the applicable Pricing Supplement (or any other page as may
replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in
H.15(519). If no such page is specified in the applicable Pricing
Supplement, the Designated CMT Telerate Page shall be 7052 for
the most recent week.
"Designated CMT Maturity Index" means the
original period to maturity of the U.S. Treasury securities
(either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified in the
applicable Pricing Supplement under "Index Maturity" with respect
to which the CMT Rate will be calculated. If no such Index
Maturity is specified in the applicable Pricing Supplement, the
Designated CMT Maturity Index shall be 2 years.
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at
the interest rate (calculated with reference to the Federal Funds
Effective Rate and the Spread and/or Spread Multiplier, if any),
and will be payable on the dates, specified on the face of the
Federal Funds Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable
Pricing Supplement, "Federal Funds Effective Rate" means, with
respect to any Federal Funds Interest Determination Date, the
rate on that date for Federal Funds as published in H.15(519)
under the heading "Federal Funds (Effective)." In the event that
such rate is not so published by 3:00 P.M., New York City time,
on the Interest Calculation Date pertaining to such Federal Funds
Interest Determination Date, the Federal Funds Effective Rate
will be the rate on such Federal Funds Interest Determination
Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is neither published
in H.15(519) nor in Composite Quotations by 3:00 P.M., New York
City time, on such Interest Calculation Date, the Federal Funds
Effective Rate for such Federal Funds Interest Determination Date
will be calculated by the Calculation Agent and will be the
arithmetic mean (rounded to the nearest one hundred-thousandth of
a percentage point) of the rates as of 9:00 A.M., New York City
time, on such Federal Funds Interest Determination Date for the
last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of New
York selected by the Calculation Agent (which, if other than the
Company or the Bank, shall be selected by the Calculation Agent
after consultation with the Company); provided, however, that if
the brokers selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the Federal Funds
Effective Rate will be the Federal Funds Effective Rate in effect
on such Federal Funds Interest Determination Date.
Eleventh District Cost of Funds Rate Notes
Eleventh District Cost of Funds Rate Notes will
bear interest at the interest rate (calculated with reference to
the Eleventh District Cost of Funds Rate and the Spread and/or
Spread Multiplier, if any), and will be payable on the dates,
specified on the face of the Eleventh District Cost of Funds Rate
Note and in the applicable Pricing Supplement.
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Unless otherwise indicated in the applicable
Pricing Supplement, "Eleventh District Cost of Funds Rate" means,
with respect to any Eleventh District Cost of Funds Rate Interest
Determination Date, the rate equal to the monthly weighted
average cost of funds for the calendar month immediately
preceding the month in which such Eleventh District Cost of Funds
Rate Interest Determination Date falls, as set forth under the
caption "11th District" on Telerate Page 7058 (as defined below)
as of 11:00 A.M., San Francisco time, on such Eleventh District
Cost of Funds Rate Interest Determination Date. If such rate does
not appear on Telerate Page 7058 on any related Eleventh District
Cost of Funds Rate Interest Determination Date, the Eleventh
District Cost of Funds Rate for such Eleventh District Cost of
Funds Rate Interest Determination Date shall be the monthly
weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently
announced (the "Index") by the FHLB of San Francisco as such cost
of funds for the calendar month immediately preceding the date of
such announcement. If the FHLB of San Francisco fails to announce
such rate for the calendar month immediately preceding such
Eleventh District Cost of Funds Rate Interest Determination Date,
then the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination
Date shall be the Eleventh District Cost of Funds Rate in effect
on such Eleventh District Cost of Funds Rate Interest
Determination Date.
"Telerate Page 7058" means the display
designated as page "7058" on the Dow Jones Telerate Service (or
such other page as may replace the 7058 page on that service for
the purpose of displaying the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home
Loan Bank District).
OTHER PROVISIONS; ADDENDA
Any provision with respect to the determination
or calculation of the interest rate or interest rate formula
applicable to any Floating Rate Note, the Interest Payment Dates
of any Note or any other variable term of a Note to be issued by
the Company may be modified by the terms as specified under
"Other Provisions" on the face thereof or in an Addendum relating
thereto, if so specified on the face thereof or in an Addendum
thereto and in the applicable Pricing Supplement.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes having the
same ranking (senior or subordinated), original issuance date,
Interest Payment Dates, redemption or repayment provisions, if
any, original issue discount provisions, if any, Stated Maturity
and in the case of Fixed Rate Notes, interest rate, or in the
case of Floating Rate Notes, Initial Interest Rate, interest rate
formula, Index Maturity, Spread and/or Spread Multiplier (if
any), minimum interest rate limitation (if any), maximum interest
rate limitation (if any) and Interest Reset Dates, will be
represented by a single global security ("Global Security"). Each
Global Security representing Book-Entry Notes will be deposited
with, or on behalf of, The Depository Trust Company, as
Depositary (the "Depositary"), and registered in the name of a
nominee of the Depositary. Book-Entry Notes will not be
exchangeable for Certificated Notes, provided that if the
Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue Certificated Notes
in exchange for the Global Security or Securities representing
Book-Entry Notes. In addition, the Company may at any time and in
its sole discretion determine not to have Book-Entry Notes
represented by Global Securities and, in such event, will issue
Certificated Notes in exchange for all Global Securities
representing such Book-Entry Notes.
A further description of the Depositary's
procedures with respect to Global Securities representing
Book-Entry Notes is set forth in the attached Prospectus under
"Description of Notes-Global Securities." The Depositary has
confirmed to the Company and the Trustees that it intends to
follow such procedures.
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REDEMPTION OR REPAYMENT
A Note is not subject to redemption prior to
the Earliest Redemption Date, if any, fixed at the time of sale
and set forth in the applicable Pricing Supplement. If no
Earliest Redemption Date is indicated with respect to a Note,
such Note is not redeemable at the option of the Company prior to
its Stated Maturity. On and after the Earliest Redemption Date,
if any, specified in the applicable Pricing Supplement, the Note
will be redeemable at the option of the Company, in whole or from
time to time in part in increments of $1,000 (provided that any
remaining principal amount of such Note shall be at least
$1,000), at the applicable Redemption Price. The "Redemption
Price" shall initially be the "Initial Redemption Price" set
forth in the applicable Pricing Supplement and shall decline, at
each anniversary of the Earliest Redemption Date, to an amount
equal to the prior Redemption Price less the "Annual Redemption
Price Reduction" indicated in the applicable Pricing Supplement,
or if no Initial Redemption Price is set forth in the applicable
Pricing Supplement, at 100% of the principal amount to be
redeemed (unless otherwise provided in the applicable Pricing
Supplement), together with accrued interest thereon to the
Redemption Date. The Company will redeem the specified portion of
the principal amount of a Note ("Sinking Fund Amount") on each of
the sinking fund redemption dates, if any, set forth in the
applicable Pricing Supplement ("Sinking Fund Redemption Dates")
together with accrued interest to the applicable Sinking Fund
Redemption Date. If no Sinking Fund Amount is set forth in the
applicable Pricing Supplement, the Company will not have any
obligation to redeem such Note before its Stated Maturity. The
Company may reduce the Sinking Fund Amount to be redeemed on any
Sinking Fund Redemption Date by subtracting 100% of the principal
amount (excluding premium) of any Note owned by the Company and
surrendered to the Trustee for cancellation or that the Company
has otherwise redeemed or repaid other than pursuant to the
second preceding sentence, in each case on or before the
applicable Sinking Fund Redemption Date. The Company may so
credit the same principal amount of such Note only once. Notice
of any redemption will be given not more than 60 nor less than 30
days prior to the Redemption Date. In the event of redemption of
any Note in part only, a new Note or Notes of the same series, of
like tenor and terms and in authorized denominations, for the
unredeemed portion of the Note will be issued in the name of the
registered holder of such Note upon the cancellation of such
Note. In case of redemption at the option of the Company of less
than all of the Senior Notes or Subordinated Notes, as the case
may be, at the time outstanding, the Company may, by written
notice to the Senior or Subordinated Trustee, as the case may be,
direct that Senior Notes or Subordinated Notes, as the case may
be, to be redeemed shall be selected from among groups of such
Notes having specified tenor or terms, and the Senior or
Subordinated Trustee, as the case may be, shall thereafter select
the particular Notes to be redeemed in such manner as the Senior
or Subordinated Trustee, as the case may be, deems fair, as
provided in the Indenture. As used herein, the term "Redemption
Date" means any Sinking Fund Redemption Date and any date fixed
for redemption of all or any of the Notes at the option of the
Company.
In addition, the applicable Pricing Supplement
will indicate either that the Company will be obligated to
purchase a Note at the option of the holder thereof or that the
Company will not be so obligated. If the Company will be so
obligated, the applicable Pricing Supplement will set forth the
date or dates (each a "Repayment Date") and the price or prices
at which the applicable Notes will be purchased, in whole or in
part, pursuant to such obligation.
FEDERAL TAX CONSIDERATIONS
The following summary of certain United States
federal income tax consequences of the purchase, ownership and
disposition of the Notes is based on laws, regulations, rulings
and decisions now in effect, all of which are subject to change
or possible differing interpretations. It deals only with Notes
held as capital assets and does not deal with persons in special
tax situations, such as financial institutions, insurance
companies, regulated investment companies, dealers in securities
or currencies, persons holding Notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or
persons whose functional currency is
S-14
not the United States dollar. This discussion does not generally
deal with tax consequences to holders other than original
purchasers. Persons considering the purchase of the Notes should
consult their own tax advisors concerning the application of
United States federal income tax laws to their particular
situations as well as any consequences of the purchase, ownership
and disposition of the Notes arising under the laws of any other
taxing jurisdiction.
As used herein, the term "U.S. Holder" means a
beneficial owner of a Note that is for United States federal
income tax purposes (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created
or organized in or under the laws of the United States or of any
political subdivision thereof, (iii) an estate or trust the
income of which is subject to United States federal income
taxation regardless of its source or (iv) any other person whose
income or gain in respect of a Note is effectively connected with
the conduct of a United States trade or business. As used herein,
the term "non-U.S. Holder" means a holder of a Note that is not a
U.S. Holder.
U.S. HOLDERS
Payments of Interest
Payments of interest on a Note, including
qualified stated interest payments (as defined below), generally
will be taxable to a U.S. Holder as ordinary interest income at
the time such payments are accrued or are received (in accordance
with the U.S. Holder's method of accounting for tax purposes).
Original Issue Discount
The following summary is a general discussion
of the United States federal income tax consequences to U.S.
Holders of the purchase, ownership and disposition of Notes
issued with original issue discount ("Discount Notes"). The
following summary is based, in part, upon final Treasury
regulations issued by the Internal Revenue Service ("IRS")
prescribing rules of accounting for original issue discount ("OID
Regulations").
For United States federal income tax purposes,
"original issue discount" is defined as the excess of the stated
redemption price at maturity of a Note over its issue price, if
such excess equals or exceeds a de minimis amount (generally 1/4
of 1% of the Note's stated redemption price at maturity
multiplied by the number of complete years to its maturity from
its issue date). The issue price of an issue of Notes will
generally equal the first price at which a substantial amount of
such Notes are sold. The stated redemption price at maturity of a
Note is the sum of all payments provided by the Note other than
"qualified stated interest" payments. The term "qualified stated
interest" generally means stated interest that is unconditionally
payable in cash or property (other than debt instruments of the
issuer) at least annually at a single fixed rate. Special rules
apply to determine qualified stated interest and original issue
discount with respect to debt instruments that provide for stated
interest at current values of (i) one or more qualified floating
rates, (ii) a single fixed rate and one or more qualified
floating rates, (iii) a single objective rate, or (iv) a single
fixed rate and a single objective rate that is a qualified
inverse floating rate. A "qualified floating rate" is generally
any floating rate where variations in such rate can reasonably be
expected to measure contemporaneous variations in the cost of
newly borrowed funds in the currency in which the Note is
denominated. An "objective rate" is a rate that is not itself a
qualified floating rate but which is determined using a single
fixed formula and which is based upon (i) one or more qualified
floating rates (e.g., a multiple of a qualified floating rate),
(ii) either the yield or changes in the price of one or more
items of actively traded personal property, (iii) one or more
rates where each rate would be a qualified floating rate for a
debt instrument denominated in a currency other than the currency
in which the Note is denominated, or (iv) a combination of the
rates described in items (i) through (iii). An objective rate is
a "qualified inverse floating rate" if the rate is equal to a
fixed rate minus a qualified floating rate and the variations in
the rate can reasonably be expected to reflect contemporaneous
variations in the cost of newly
S-15
borrowed funds. U.S. Holders should be aware that on December 15,
1994, the IRS released proposed amendments to the OID Regulations
which would broaden the definition of an objective rate and would
further clarify certain other provisions contained in the OID
Regulations. If ultimately adopted, these amendments to the OID
Regulations generally would be effective for debt instruments
issued 60 days or more after the date on which such proposed
amendments are finalized.
A U.S. Holder of a Discount Note must include
original issue discount in income for United States federal
income tax purposes as it accrues under a constant yield method
in advance of receipt of the cash payments attributable to such
income, regardless of such U.S. Holder's method of accounting for
tax purposes. In general, the amount of original issue discount
included in income by the initial holder of a Discount Note is
the sum of the "daily portions" of original issue discount with
respect to such Note for each day during the taxable year on
which such holder held such Note. The daily portion of original
issue discount on any Discount Note is determined by allocating
to each day in any "accrual period" a ratable portion of the
original issue discount allocable to that accrual period. An
accrual period may be of any length and the accrual periods may
vary in length over the term of the debt instrument, provided
that each accrual period is no longer than one year and each
scheduled payment of principal or interest occurs on the first
day or the final day of an accrual period. The amount of original
issue discount allocable to each accrual period is equal to the
difference between (i) the product of the Discount Note's
adjusted issue price at the beginning of such accrual period and
its yield to maturity (determined on the basis of compounding at
the close of each accrual period and appropriately adjusted to
take into account the length of the particular accrual period)
and (ii) the amount of any qualified stated interest payments
allocable to such accrual period. The "adjusted issue price" of a
Discount Note at the beginning of any accrual period is the sum
of the issue price of the Discount Note plus the amount of
original issue discount allocable to all prior accrual periods
minus the amount of any prior payments on the Discount Note that
were not qualified stated interest payments. Under these rules,
holders will generally have to include in income increasingly
greater amounts of original issue discount in successive accrual
periods.
A U.S. Holder who purchases a Discount Note for
an amount that is greater than its adjusted issue price as of the
purchase date and less than or equal to the sum of all amounts
payable on the Discount Note after the purchase date other than
payments of qualified stated interest, will be considered to have
purchased the Discount Note at an "acquisition premium." Under
the acquisition premium rules, the amount of original issue
discount which such U.S. Holder must include in its gross income
with respect to such Discount Note for any taxable year (or
portion thereof in which the holder holds the Discount Note) will
be reduced (but not below zero) by the portion of the acquisition
premium properly allocable to the period.
Certain of the Notes (i) may be redeemable at
the option of the Company prior to their stated maturity (a "call
option") and/or (ii) may be repayable at the option of the holder
prior to their stated maturity (a "put option"). Notes containing
such features may be subject to rules that differ from the
general rules discussed above. Investors intending to purchase
Notes with such features should consult their tax advisors, since
the original issue discount consequences will depend, in part, on
the particular terms and features of such Notes.
Notes that have a fixed maturity of one year or
less ("Short-Term Notes") will be deemed to have been issued with
original issue discount. In general, an individual or other cash
method U.S. Holder is not required to accrue original issue
discount on Short-Term Notes as income unless the holder elects
to do so. If such an election is not made, any gain recognized by
the U.S. Holder on the sale, exchange or maturity of the
Short-Term Note will be ordinary income to the extent of the
original issue discount accrued on a straight-line basis (or,
upon election, a constant yield method based on daily
compounding) through the date of sale or maturity, and a portion
of the deductions otherwise allowable to the holder for interest
on borrowings allocable to the Short-Term Note will be deferred
until a corresponding amount of income is realized. U.S. Holders
who report income for federal income tax purposes under the
accrual method and certain other holders, including banks and
dealers in securities, are required to accrue original issue
discount on a Short-Term Note on a
S-16
straight-line basis unless an election is made to accrue the
original issue discount under a constant yield method (based on
daily compounding).
U.S. Holders may generally, upon election,
include in income all interest (including stated interest,
original issue discount, de minimis original issue discount,
market discount, de minimis market discount, and unstated
interest, as adjusted by any amortizable bond premium or
acquisition premium) on a debt instrument by using the constant
yield method applicable to original issue discount, subject to
certain limitations and exceptions.
Any special United States Federal income tax
considerations applicable to a particular Floating Rate Note will
be described in the applicable Pricing Supplement.
Market Discount
If a U.S. Holder purchases a Note, other than a
Discount Note, for an amount that is less than its issue price
(or, in the case of a subsequent purchaser, its stated redemption
price at maturity) or purchases a Discount Note for an amount
that is less than its adjusted issue price as of the purchase
date, such U.S. Holder will be treated as having purchased such
Note at a "market discount," unless such market discount is less
than a specified de minimis amount.
Under the market discount rules, a U.S. Holder
will be required to treat any partial principal payment on a Note
(or, in the case of a Discount Note, any payment that does not
constitute qualified stated interest on the Discount Note) or any
gain realized on the sale, exchange, retirement or other
disposition of a Note as ordinary income to the extent of the
lesser of (i) the amount of such payment or realized gain or (ii)
the market discount which has not previously been included in
income and is treated as having accrued on such Note at the time
of such payment or disposition. Market discount will be
considered to accrue ratably during the period from the date of
acquisition to the maturity date of the Note, unless the U.S.
Holder elects to accrue market discount on the basis of
semiannual compounding.
A U.S. Holder may be required to defer the
deduction of all or a portion of the interest paid or accrued on
any indebtedness incurred or maintained to purchase or carry a
Note with market discount until the maturity of the Note or
certain earlier dispositions. A U.S. Holder may elect to include
market discount in income currently as it accrues (on either a
ratable or semiannual compounding basis), in which case the rules
described above regarding the treatment as ordinary income of
gain upon the disposition of the Note and upon the receipt of
certain cash payments and regarding the deferral of interest
deductions will not apply. Generally, such currently included
market discount is treated as interest for federal income tax
purposes.
Premium
If a U.S. Holder purchases a Note for an amount
that is greater than the sum of all amounts payable on the Note
after the purchase date other than payments of qualified stated
interest, such U.S. Holder will be considered to have purchased
the Note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium using a
constant yield method over the remaining term of the Note and may
offset interest otherwise required to be included in respect of
the Note during any taxable year by the amortized amount for the
taxable year. However, if the Note may be optionally redeemed
after the U.S. Holder acquires it at a price in excess of its
stated redemption price at maturity, special rules would apply
which could result in a deferral of the amortization of some bond
premium until later in the term of the Note.
S-17
Disposition of a Note
Upon the sale, exchange or retirement of a
Note, a U.S. Holder generally will recognize taxable gain or loss
equal to the difference between the amount realized on the sale,
exchange or retirement (other than amounts representing accrued
and unpaid interest) and such U.S. Holder's adjusted tax basis in
the Note. A U.S. Holder's adjusted tax basis in a Note generally
will equal such U.S. Holder's initial investment in the Note
increased by any original issue discount included in income (and
accrued market discount, if any, if the holder has included such
market discount in income) and decreased by the amount of any
payments, other than qualified stated interest payments, received
and premium amortization deductions taken with respect to such
Note. Except as discussed above under "Original Issue Discount"
and "Market Discount," such gain or loss generally will be
long-term capital gain or loss if the Note has been held for more
than one year.
NON-U.S. HOLDERS
Subject to the discussion of backup withholding
below, a non-U.S. Holder will generally not be subject to United
States federal income taxes or withholding on payments of
principal, premium (if any) or interest (including original issue
discount, if any) on a Note, unless such non-U.S. Holder is a
direct or indirect 10% or greater shareholder of the Company, a
controlled foreign corporation related to the Company or a bank
receiving interest described in section 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended ("Code"). To qualify
for the exemption from taxation, the last United States payor in
the chain of payment prior to payment to a non-U.S. Holder (the
"Withholding Agent") must have received in the year in which a
payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that (i) is signed by the
beneficial owner of the Note under penalties of perjury, (ii)
certifies that such owner is not a U.S. Holder and (iii) provides
the name and address of the beneficial owner. The statement may
be made on an IRS Form W-8 or a substantially similar form, and
the beneficial owner must inform the Withholding Agent of any
change in the information on the statement within 30 days of such
change. If a Note is held through a securities clearing
organization or certain other financial institutions, the
organization or institution may provide a signed statement to the
Withholding Agent. However, in such case, the signed statement
must be accompanied by a copy of the IRS Form W-8 or the
substitute form provided by the beneficial owner to the
organization or institution. The Treasury Department is
considering implementation of further certification requirements
aimed at determining whether the issuer of a debt obligation is
related to holders thereof.
Generally, a non-U.S. Holder will not be
subject to federal income taxes on any amount which constitutes
capital gain upon retirement or disposition of a Note. Certain
exceptions to this rule may be applicable, and a non-U.S. Holder
should consult its tax advisor in this regard.
The Notes will not be includible in the estate
of a non-U.S. Holder unless the individual is a direct or
indirect 10% or greater shareholder of the Company or, at the
time of such individual's death, payments in respect of the Notes
would have been effectively connected with the conduct by such
individual of a trade or business in the United States.
BACKUP WITHHOLDING
Backup withholding of federal income tax at a
rate of 31% may apply to payments made in respect of the Notes to
registered owners who are not "exempt recipients" and who fail to
provide certain identifying information (such as the registered
owner's taxpayer identification number) in the required manner.
Generally, individuals are not exempt recipients, whereas
corporations and certain other entities generally are exempt
recipients. Payments made in respect of the Notes to a U.S.
Holder must be reported to the IRS unless the U.S. Holder is an
exempt recipient or otherwise establishes an exemption.
Compliance with the certification procedures described under
"Non-U.S. Holders" above would establish an exemption from backup
withholding for those non-U.S. Holders who are not exempt
recipients.
S-18
In addition, upon the sale of a Note to (or
through) a broker, the broker must withhold 31% of the entire
purchase price, unless either (i) the broker determines that the
seller is a corporation or other exempt recipient or (ii) the
seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that
such seller is a non-U.S. Holder (and certain other conditions
are satisfied). Such a sale must also be reported by the broker
to the IRS unless either (i) the broker determines that the
seller is an exempt recipient or (ii) the seller certifies its
non-U.S. status (and certain other conditions are satisfied).
Certification of the registered owner's non-U.S. status would be
made normally on an IRS Form W-8 under penalties of perjury,
although in certain cases it may be possible to submit other
documentary evidence.
Any amounts withheld under the backup
withholding rules from a payment to a beneficial owner would be
allowed as a refund or a credit against such beneficial owner's
United States federal income tax, provided certain required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Notes may be offered by the Company through
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, CS First Boston Corporation, Goldman, Sachs & Co.,
Lehman Brothers, Lehman Brothers Inc., including its affiliate
Lehman Government Securities Inc., Morgan Stanley & Co.
Incorporated or Salomon Brothers Inc, as Agents, each of which
has agreed to use its best efforts to solicit offers to purchase
the Notes. The Company will pay each Agent a commission which,
depending on the maturity of the Note, will range from .125% to
.625% of the principal amount of any Note sold through such
Agent. The Company also may sell Notes to any Agent at a discount
for resale to purchasers at varying prices related to prevailing
market prices at the time of resale, to be determined by such
Agent, or, if so agreed, at fixed public offering prices. The
Company or an affiliate of the Company may sell Notes directly to
purchasers on behalf of the Company in those jurisdictions where
it is authorized to do so.
Unless otherwise indicated in the applicable
Pricing Supplement, payment of the purchase price of the Notes
will be required to be made in funds immediately available in The
City of New York. The Company reserves the right to withdraw,
cancel or modify the offer or solicitations of offers made hereby
without notice. The Company or any Agent, if it solicits such
offer, may reject any offer to purchase Notes, in whole or in
part.
In addition, the Agents may offer the Notes
they have purchased as principal to other dealers. The Agents may
sell Notes to any dealer at a discount and, unless otherwise
specified in the applicable Pricing Supplement, such discount
allowed to any dealer will not be in excess of the discount to be
received by such Agent from the Company. Unless otherwise
indicated in the applicable Pricing Supplement, any Note sold to
an Agent as principal will be purchased by such Agent at a price
equal to 100% of the principal amount thereof less a percentage
equal to the commission applicable to any agency sale of a Note
of identical maturity, and may be resold by the Agent to
investors and other purchasers from time to time in one or more
transactions, including negotiated transactions, at varying
prices determined at the time of sale or, if so agreed, at a
fixed public offering price. After the initial public offering of
Notes to be resold to investors and other purchasers, the public
offering price (if resold on a fixed public offering price
basis), concession and discount may be changed.
Each of the Agents may from time to time
purchase and sell Notes in the secondary market, but is not
obligated to do so, and there can be no assurance that there will
be a secondary market for the Notes or liquidity in the secondary
market if one develops. From time to time, each of the Agents may
make a market in the Notes. None of the Agents is obligated to do
so, however, and any Agent may discontinue making a
S-19
market at any time without notice. No assurance can be given as
to the liquidity of any trading market for the Notes.
Each Agent may be deemed to be an "Underwriter"
within the meaning of the Securities Act of 1933. The Company has
agreed to indemnify each Agent against certain liabilities,
including liabilities under such Act, or to contribute to
payments the Agent may be required to make in respect thereof.
The Company has also agreed to reimburse the Agents for certain
expenses.
Each Agent may engage in transactions with and
perform services for the Company in the ordinary course of its
business.
Warren E. Buffett, Chairman of the Executive
Committee of the Board of Directors of Salomon Inc, the parent of
Salomon Brothers Inc, one of the Agents, is the Chairman of the
Board and Chief Executive Officer of Berkshire Hathaway Inc.
("Berkshire"). Charles T. Munger, the Vice Chairman of Berkshire,
is a member of the Board of Directors of Salomon Inc. According
to the most recent information available to the Company at the
date of this Prospectus Supplement, Mr. Buffett, his wife, and a
trust of which Mr. Buffett is a trustee, but in which he has no
economic interest, own approximately 43.8% of the outstanding
shares of Berkshire. Berkshire and its subsidiaries own all of
the outstanding shares of Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock") of Salomon Inc. The
Preferred Stock is entitled to 18,421,053 votes, constituting
approximately 14.8% of the votes entitled to be cast by the
outstanding voting securities of Salomon Inc. The Preferred Stock
is convertible into 18,421,053, or approximately 14.8% of the
outstanding shares of common stock of Salomon Inc. According to
the most recent information available to the Company at the date
of this Prospectus Supplement, Berkshire and its subsidiaries
also own 6,633,600 shares of common stock of Salomon Inc,
representing approximately 5.3% of the votes entitled to be cast
by the outstanding voting securities of Salomon Inc, so that
Berkshire's total voting percentage including both preferred and
common is approximately 20.1%. According to the most recent
information available to the Company at the date of this
Prospectus Supplement, Berkshire and its subsidiaries own
6,819,218 shares, or approximately 14.1%, of the common stock
of the Company. Berkshire has received approval from the Federal
Reserve Board to purchase up to 22% of the Company's common
stock. Berkshire has made passivity commitments to the Federal
Reserve Board which are designed to assure that Berkshire will
not exercise or attempt to exercise a controlling influence over
the management or policies of the Company or any of its
subsidiaries. In addition, Berkshire has granted an irrevocable
proxy to the Secretary of the Company to vote Berkshire's shares
in accordance with the recommendations of the board of directors
of the Company. Salomon Brothers Inc may from time to time own
shares of common stock of the Company. Neither Mr. Buffett nor
any representative of Berkshire is a director of the Company or
any of its subsidiaries.
S-20
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR THE AGENTS. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL,
OR SOLICITATION OF AN OFFER TO BUY, THE NOTES IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT
BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT IN THE PROSPECTUS OR IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
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TABLE OF CONTENTS
PAGE
____
PROSPECTUS SUPPLEMENT
Description of Medium-Term Notes............................ S- 2
Federal Tax Considerations.................................. S-14
Plan of Distribution........................................ S-19
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by
Reference................................................ 2
Wells Fargo & Company....................................... 2
Use of Proceeds............................................. 3
Summary Financial Data...................................... 4
Description of Notes........................................ 6
Description of Preferred Stock.............................. 12
Description of Depositary Shares............................ 17
Description of Capital Stock................................ 20
Plan of Distribution........................................ 21
Legal Opinions.............................................. 21
Experts..................................................... 22
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$2,335,000,000
[WFC LOGO of stagecoach pulled by team of horses]
MEDIUM-TERM NOTES
AND
SUBORDINATED MEDIUM-TERM
NOTES, SERIES B
DUE FROM 9 MONTHS TO
12 YEARS FROM DATE OF ISSUE
-----------------------
PROSPECTUS SUPPLEMENT
-----------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
August 24, 1995
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