RULE NO.424(b)(2)
                                                      REGISTRATION NO. 33-65904
 
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 4, 1993)
 
                                $1,029,031,250
                           FIRST CHICAGO CORPORATION
                          MEDIUM-TERM NOTES, SERIES F
 
                                --------------
                 Due More Than Nine Months From Date of Issue
                                --------------
 
  First Chicago Corporation (the "Company") may offer from time to time its
Medium-Term Notes, Series F (the "Notes") which are issuable in one or more
series. The Notes offered by this Prospectus Supplement are offered in an
aggregate principal amount of up to $1,029,031,250, or the equivalent thereof
in other currencies, including composite currencies such as the European
Currency Unit (the "Specified Currency"). See "Important Currency Exchange
Information." Such aggregate principal amount is subject to reduction as a
result of the sale of other Debt Securities, as defined below. See
"Description of Notes--General" and "Plan of Distribution" herein. The
interest rate on each Note will be either a fixed rate established by the
Company at the date of issue of such Note, which may be zero in the case of
certain Original Issue Discount Securities, or a floating rate as set forth
therein and specified in the applicable Pricing Supplement. A Fixed Rate Note
may pay a level amount in respect of both interest and principal amortized
over the life of the Note (an "Amortizing Note").
 
  The Notes may be issued as Senior Securities or Subordinated Securities.
Subordinated Securities will be subordinated as described under "Subordinated
Securities" in the Prospectus.
 
  Unless otherwise indicated in the applicable Pricing Supplement, interest on
Fixed Rate Notes is payable semi-annually on each March 15 and September 15
and at maturity. Interest on Floating Rate Notes is payable on the dates
indicated herein and in the applicable Pricing Supplement. Amortizing Notes
will pay principal and interest as set forth in the applicable Pricing
Supplement. See "Description of Notes--Interest and Interest Rates." Each Note
will mature on any Business Day more than nine months from the date of issue,
as set forth in the applicable Pricing Supplement. See "Description of Notes."
Unless otherwise specified in the applicable Pricing Supplement, the Notes may
not be redeemed by the Company or repaid at the option of the holder prior to
maturity and will be issued in fully registered form in denominations of
$1,000 (or, in the case of Notes not denominated in U.S. dollars, the
equivalent thereof in the Specified Currency, rounded to the nearest 1,000
units of the Specified Currency) or any amount in excess thereof which is an
integral multiple of $1,000 (or, in the case of Notes not denominated in U.S.
dollars, 1,000 units of the Specified Currency). Any terms relating to Notes
being denominated in foreign currencies or composite currencies will be as set
forth in a foreign currency supplement hereto (the "Multi-Currency Prospectus
Supplement") and the applicable Pricing Supplement.
 
  Unless otherwise specified in the applicable Pricing Supplement, each Note
will be issued only in book-entry form, subject to certain limitations listed
herein, and will be represented by a global security registered in the name of
a nominee of The Depository Trust Company, as Depositary, or other depositary
(a "Book-Entry Note"). Beneficial interests in Book-Entry Notes will be shown
on, and transfers thereof will be effected only through, records maintained by
the Depositary's participants.
 
THE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
GOVERNMENTAL AGENCY.
                                --------------
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                                --------------
 


                                  PRICE TO                   AGENTS'                          PROCEEDS TO
                                 PUBLIC(1)              COMMISSIONS(2)(3)                    COMPANY(2)(4)
                                 ---------              -----------------                    -------------
                                                                           
Per Note................            100%                  .125% - .750%                    99.875% - 99.250%
Total(5)................       $1,029,031,250        $1,286,289 - $7,717,734        $1,027,744,961 - $1,021,313,516

- -------
(1) Unless otherwise indicated in the applicable Pricing Supplement, Notes
    will be sold at 100% of their principal amount. If the Company issues any
    Note at a discount from or at a premium over its principal amount, the
    Price to Public of any Note issued at a discount or premium will be as set
    forth in the applicable Pricing Supplement.
(2) The commission payable to an Agent for each Note sold through such Agent
    shall range from .125% to .750% of the principal amount of such Note,
    provided, however, that commissions with respect to Notes maturing in
    thirty years or greater will be negotiated. The Company may also sell
    Notes to an Agent, as principal at negotiated discounts, for resale to
    investors and other purchasers at varying prices related to the prevailing
    market prices at the time of resale as determined by such Agent or, if so
    agreed, at a fixed public offering price. See "Plan of Distribution."
(3) The Agents may be deemed to be "underwriters" within the meaning of the
    Securities Act of 1933. The Company has agreed to indemnify the Agents and
    Underwriters against and contribute toward certain liabilities, including
    liabilities under applicable securities law.
(4) Before deducting other expenses payable by the Company estimated at up to
    $600,000.
(5) Or the equivalent thereof in other currencies including composite
    currencies.
 
                                --------------
  Offers to purchase the Notes are being solicited from time to time by Morgan
Stanley & Co. Incorporated, First Chicago Capital Markets, Inc., CS First
Boston Corporation, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc (individually, an "Agent" and
collectively, the "Agents"), on behalf of the Company. The Agents have agreed
to use reasonable efforts to solicit purchases of such Notes. The Company also
may sell Notes to an Agent acting as principal for its own account or
otherwise, to be determined by such Agent. The Company may also sell Notes
directly to investors on its own behalf in jurisdictions where it is
authorized to do so. No termination date for the offering of the Notes has
been established. Unless otherwise specified in the applicable Pricing
Supplement, 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 made hereby without
notice. The Company or any Agent, if it receives the offer, may reject any
offer to purchase Notes, in whole or in part. See "Plan of Distribution." This
Prospectus Supplement and Prospectus may be used by First Chicago Capital
Markets, Inc. ("FCCM"), a wholly owned subsidiary of the Company, in
connection with offers and sales related to secondary market transactions in
the Notes. FCCM may act as principal or agent in such transactions. Such sales
will be made at prices related to prevailing market prices at the time of
sale.
 
                                --------------
MORGAN STANLEY & CO.                        FIRST CHICAGO CAPITAL MARKETS, INC.
   Incorporated
 
CS FIRST BOSTON        MERRILL LYNCH & CO.                 SALOMON BROTHERS INC
July 29, 1994

 
                    IMPORTANT CURRENCY EXCHANGE INFORMATION
 
  Purchasers are required to pay for the Notes in U.S. dollars, and payments of
principal, premium, if any, and interest on the Notes will also be made in U.S.
dollars, unless the applicable Pricing Supplement and Multi-Currency Prospectus
Supplement provide that purchasers are instead required to pay for the Notes in
a Specified Currency and/or that payments of principal, premium, if any, and
interest on such Notes will be made in a Specified Currency. Currently, there
are limited facilities in the United States for the conversion of U.S. dollars
into foreign currencies and vice versa. In addition, most banks do not
currently offer non-U.S. dollar denominated checking or savings account
facilities in the United States. Accordingly, unless otherwise specified in a
Pricing Supplement and Multi-Currency Prospectus Supplement or unless
alternative arrangements are made, payment of principal, premium, if any, and
interest on Notes in a Specified Currency other than U.S. dollars will be made
to an account at a bank outside the United States. See "Description of Notes"
and "Foreign Currency Risks."
 
  If the applicable Pricing Supplement and Multi-Currency Prospectus Supplement
provide for payments of principal of and interest on a non-U.S. dollar
denominated Note to be made in U.S. dollars or for payments of principal of and
interest on a U.S. dollar denominated Note to be made in a Specified Currency
other than U.S. dollars, the conversion of the Specified Currency into U.S.
dollars or U.S. dollars into the Specified Currency, as the case may be, will
be handled by the Exchange Rate Agent identified in the Pricing Supplement or
Multi-Currency Prospectus Supplement. Any Agent may act, from time to time, as
Exchange Rate Agent. The costs of such conversion will be borne by the holder
of a Note through deductions from such payments.
 
  Reference herein to "U.S. dollars" or "U.S. $" or "$" are to the currency of
the United States of America.
 
                              DESCRIPTION OF NOTES
 
  The following description of the particular terms of the Notes offered hereby
(referred to in the accompanying Prospectus as the "Debt Securities", the
"Senior Securities" or the "Subordinated Securities", as applicable)
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities, Senior Securities
and Subordinated Securities set forth in the Prospectus, to which description
reference is hereby made. Unless otherwise specified in the applicable Pricing
Supplement, the Notes will have the terms described below, except that
references to interest payments and interest-related information do not apply
to certain Original Issue Discount Securities.
 
  If any Note is not to be denominated in U.S. dollars, then certain provisions
with respect thereto will be as set forth in a foreign currency supplement
hereto ("Multi-Currency Prospectus Supplement") and the applicable pricing
supplement hereto ("Pricing Supplement"). The applicable Pricing Supplement and
Multi-Currency Prospectus Supplement will specify the currency or currencies,
including composite currencies such as the European Currency Unit ("ECU"), in
which the principal, premium, if any, and interest, if any, with respect to
such Note are to be paid, along with any other terms relating to the non-U.S.
dollar denomination, including exchange rates for the Specified Currency as
against the U.S. dollar at selected times during the last five years, and any
exchange controls affecting such Specified Currency. See "Foreign Currency
Risks."
 
GENERAL
 
  The Notes may be Senior Securities or Subordinated Securities. The Notes
constituting Senior Securities will be issued under the Indenture dated as of
August 1, 1987, as amended by a First Supplemental Indenture dated as of March
1, 1989, between the Company and Citibank, N.A., as Trustee (such Indenture as
amended, the "Senior Indenture"). The Notes constituting Subordinated
Securities will be issued under the Indenture dated as of August 1, 1987, as
amended by a First Supplemental Indenture dated as of March 1, 1989, and a
Second Supplemental Indenture dated as of January 1, 1993, between the Company
and Bank of America National Trust and Savings Association, as successor
Trustee to Security Pacific National Bank (such Indenture as amended, the
"Subordinated Indenture").
 
                                      S-2

 
  Notes issued under the Senior Indenture will rank pari passu with all
outstanding senior indebtedness of the Company. Notes issued under the
Subordinated Indenture will rank pari passu with all other subordinated debt of
the Company and will constitute New Subordinated Securities. As New
Subordinated Securities, such Notes will be subordinated in right of payment to
the prior payment in full of the Senior Indebtedness of the Company and will
also be effectively subordinated in right of payment to the prior payment in
full of all General Obligations. See "Subordinated Securities" in the
Prospectus for a description of the terms of the New Subordinated Securities
and the relationship between the New Subordinated Securities and other
subordinated debt previously issued by the Company. As of June 30, 1994, the
aggregate amount of Senior Indebtedness and General Obligations was
approximately $1.6 billion.
 
  The Notes may be Fixed Rate Notes or Floating Rate Notes. The following
summaries of certain provisions of the Indentures do not purport to be
complete, are subject to, and are qualified in their entirety by reference to,
all the provisions of the Indentures, including the definitions therein of
certain terms.
 
  The Notes may be issued from time to time in an aggregate principal amount of
up to $1,029,031,250 or the equivalent thereof in one or more foreign or
composite currencies, subject to reduction as a result of the sale by the
Company of other Debt Securities as referred to in the accompanying Prospectus.
For the purpose of this Prospectus Supplement, (i) the principal amount of any
Original Issue Discount Security (as defined herein) means the Issue Price (as
defined herein) of such Note and (ii) the principal amount of any Note issued
in a foreign currency or composite currency means the U.S. dollar equivalent on
the date of issue of the Issue Price of such Note.
 
  Each Note will mature on a Business Day (as defined below) more than nine
months from its date of issue, as selected by the initial purchaser and agreed
to by the Company, and may be subject to redemption or repayment prior to
maturity at the price or prices specified in the applicable Pricing Supplement.
The Notes will not be subject to any sinking fund.
 
  Except as may be specified for Notes denominated in foreign or composite
currencies or as otherwise provided in the applicable Pricing Supplement, the
Notes will be issued only in fully registered form in denominations of U.S.
$1,000 or any amount in excess thereof which is an integral multiple of U.S.
$1,000. Unless otherwise provided in the applicable Pricing Supplement and
Multi-Currency Prospectus Supplement, Notes denominated in a Specified Currency
other than U.S. dollars will be issued in denominations of the equivalent of
U.S. $1,000 (rounded to an integral multiple of 1,000 units of such Specified
Currency), or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency, as determined by reference to the noon
dollar buying rate in New York City for cable transfers of such Specified
Currency published by the Federal Reserve Bank of New York (the "Market
Exchange Rate") on the Business Day (as defined below) immediately preceding
the date of issuance; provided, however, that in the case of ECU's, the Market
Exchange Rate shall be the rate of exchange determined by the Commission of the
European Communities (or any successor thereto) as published in the Official
Journal of the European Communities, or any successor publication, on the
Business Day immediately preceding the date of issuance.
 
  The Notes will be offered on a continuing basis. Unless otherwise provided in
an applicable Pricing Supplement, each Note will be issued as a Book-Entry Note
registered in the name of the nominee of the Depositary. So long as the
Depositary or its nominee is the registered owner of such Book-Entry Notes, the
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Notes for all purposes under the applicable Indenture.
Except as set forth under "Description of Notes--Book-Entry System", Book-Entry
Notes will not be issuable in certificated form.
 
  Interest on the Notes will be payable at the office of The First National
Bank of Chicago, the Company's Paying Agent and Note Registrar, currently
located at One First National Plaza, Chicago, Illinois 60670, provided that
payment of interest, other than interest at maturity or upon earlier redemption
or repayment, may be made at the option of the Company by check mailed to the
address of the person entitled thereto as it appears on the Note Register at
the close of business on the Regular Record Date corresponding to the
 
                                      S-3

 
relevant Interest Payment Date. The principal, interest and premium, if any,
payable at maturity or upon earlier redemption or repayment in respect of each
Note will be paid in immediately available funds against presentation of the
Note at the office of The First National Bank of Chicago, One First National
Plaza, Chicago, Illinois 60670. In the case of Global Securities representing
Book-Entry Notes, such payments of principal, interest and premium, if any,
will be made to the Depositary or its nominee. Payments to beneficial owners of
Book-Entry Notes will be made through the Depositary and its participants. See
"Description of Debt Securities--General--Global Securities" in the Prospectus.
 
  Notes may be issued in the form of Original Issue Discount Securities which
will be offered at a discount from the principal amount thereof due at the
stated maturity of such Notes. There may not be any periodic payments of
interest on Original Issue Discount Securities. In the event of an acceleration
of the maturity of any Original Issue Discount Security, the amount payable to
the holder of such Original Issue Discount Security upon such acceleration will
be determined in accordance with the Pricing Supplement and the terms of such
security, but will be an amount less than the amount payable at the maturity of
the principal of such Original Issue Discount Security. For Federal income tax
considerations with respect to Original Issue Discount Securities, see "Certain
U.S. Federal Income Tax Considerations--U.S. Holders--Original Issue Discount"
in this Prospectus Supplement.
 
  The Pricing Supplement relating to each Note will describe the following
terms: (1) the specified currency with respect to such Note (and, if such
currency is other than U.S. dollars, certain other terms relating to such Note,
including the authorized denominations); (2) whether such Note is a Senior
Security or a Subordinated Security; (3) whether such Note is a Fixed Rate Note
or a Floating Rate Note; (4) the price (expressed as a percentage of the
aggregate principal amount thereof) at which such Note will be issued (the
"Issue Price"); (5) the date on which such Note will be issued; (6) the date on
which such Note will mature; (7) if such Note is a Fixed Rate Note, the rate
per annum at which such Note will bear interest, if any; (8) if such Note is a
Floating Rate Note, the interest rate basis, the Initial Interest Rate, the
Interest Reset Dates, the Interest Payment Dates, the Index Maturity, the
maximum interest rate and the minimum interest rate, if any, and the Spread
and/or Spread Multiplier, if any, (all as defined below) and any other terms
relating to the particular method of calculating the interest rate for such
Note; (9) whether such Note may be redeemed or repaid prior to the maturity
date, and, if so, the provisions relating to such redemption payment; and (10)
any other terms of such Notes not inconsistent with the provisions of the
related Indenture.
 
PAYMENT CURRENCY
 
  If the applicable Pricing Supplement and Multi-Currency Prospectus Supplement
provide for payments of interest and principal on a non-U.S. dollar denominated
Note to be made, at the option of the holder of such Note, in U.S. dollars,
conversion of the Specified Currency into U.S. dollars will be based on the
highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign
exchange dealers (one of which may be the Exchange Rate Agent) for the purchase
by the quoting dealer of the Specified Currency for U.S. dollars for settlement
on such payment date in the aggregate amount of the Specified Currency payable
to the holders of Notes and at which the applicable dealer commits to execute a
contract. If such bid quotations are not available, payments will be made in
the Specified Currency. All currency exchange costs will be borne by the
holders of Notes by deductions from such payments.
 
  Except as set forth below, if the principal of, premium, if any, or interest
on, any Note is payable in a Specified Currency other than U.S. dollars and
such Specified Currency is not available to the Company for making payments
thereof due to the imposition of exchange controls or other circumstances
beyond the control of the Company or is no longer used by the government of the
country issuing such currency or for the settlement of transactions by public
institutions within the international banking community, then the Company will
be entitled to satisfy its obligations to holders of the Notes by making such
payments in U.S. dollars on the basis of the Market Exchange Rate on the date
of such payment or, if the Market Exchange Rate is not available on such date,
as of the most recent practicable date. Any payment made under such
 
                                      S-4

 
circumstances in U.S. dollars where the required payment is in a Specified
Currency other than U.S. dollars will not constitute an Event of Default.
 
  If payment in respect of a Note is required to be made in ECUs and ECUs are
unavailable due to the imposition of exchange controls or other circumstances
beyond the Company's control or are no longer used in the European Monetary
System, then all payments in respect of such Note shall be made in U.S. dollars
until ECUs are again available or so used. The amount of each payment in U.S.
dollars shall be computed on the basis of the equivalent of the ECU in U.S.
dollars, determined as described below, as of the second Business Day prior to
the day on which such payment is due.
 
  The equivalent of the ECU in U.S. dollars as of any date shall be determined
by the Company or the Exchange Rate Agent on the following basis. The component
currencies of the ECU for this purpose (the "Components") shall be the currency
amounts that were components of the ECU as of the last date on which the ECU
was used in the European Monetary System. The equivalent of the ECU in U.S.
dollars shall be calculated by aggregating the U.S. dollar equivalents of the
Components. The U.S. dollar equivalent of each of the Components shall be
determined by the Company or the Exchange Rate Agent on the basis of the most
recently available Market Exchange Rates for such Components.
 
  If the official unit of any Component is altered by way of combination or
subdivision, the number of units of that currency as a Component shall be
divided or multiplied in the same proportion. If two or more Components are
consolidated into a single currency, the amounts of those currencies as
Components shall be replaced by an amount in such single currency equal to the
sum of the appropriate amounts of the consolidated component currencies
expressed in such single currency. If any Component is divided into two or more
currencies, the amount of the original component currency shall be replaced by
the appropriate amounts of such two or more currencies, the sum of which shall
be equal to the amount of the original component currency.
 
  All determinations referred to above made by the Company or its agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on holders of Notes.
 
INTEREST AND INTEREST RATES
 
  Each Note will bear interest at either (a) a fixed rate (the "Fixed Rate
Notes") or (b) a floating rate determined by reference to an interest rate
formula (the "Floating Rate Notes"), which may be adjusted by a Spread and/or
Spread Multiplier (each as defined below). Any Floating Rate Note may also have
either or both of the following: (i) a maximum interest rate limitation, or
ceiling, on the rate of interest which may accrue during any interest period;
and (ii) a minimum interest rate limitation, or floor, on the rate of interest
which may accrue during any interest period. The applicable Pricing Supplement
will designate one or more of the following interest rate bases as applicable
to each Note: (a) a fixed rate per annum, in which case such Note will be a
"Fixed Rate Note"; (b) the Commercial Paper Rate, in which case such Note will
be a "Commercial Paper Rate Note"; (c) the Federal Funds Rate, in which case
such Note will be a "Federal Funds Rate Note"; (d) LIBOR, in which case such
Note will be a "LIBOR Note"; (e) the Treasury Rate, in which case such Note
will be a "Treasury Rate Note"; (f) the Prime Rate, in which case such Note
will be a "Prime Rate Note"; or (g) such other interest rate basis or formula
as is set forth in such Pricing Supplement.
 
  The interest rate on each Note will be equal to (a) in the case of a Fixed
Rate Note, a fixed rate; or (b) in the case of a Floating Rate Note, either (i)
the interest rate, determined by reference to the specified interest rate
formula (as specified in the applicable Pricing Supplement)(the "Base Rate")
plus or minus the Spread, if any, and/or (ii) the Base Rate, multiplied by the
Spread Multiplier, if any. The "Spread" is the number of basis points specified
in the applicable Pricing Supplement as being applicable to such Floating Rate
Note, and the "Spread Multiplier" is the percentage specified in the applicable
Pricing Supplement as being applicable to such Floating Rate Note.
 
                                      S-5

 
  Each Note will bear interest from its date of issue or, except as otherwise
specified herein with respect to certain Floating Rate Notes, from the most
recent Interest Payment Date to which interest on such Note has been paid or
duly provided for until the principal thereof is paid or made available for
payment. Interest on each Note will accrue at the annual rate or at a rate
determined pursuant to an interest rate formula, stated therein and in the
applicable Pricing Supplement. Interest will be payable on each Interest
Payment Date and at maturity or upon earlier redemption or repayment (each such
date, a "Maturity"). Interest will be payable to the person in whose name a
Note (or any Predecessor Note) is registered at the close of business on the
Regular Record Date next preceding the Interest Payment Date (which in the case
of Global Securities representing Book-Entry Notes, will be the Depositary or
the nominee of the Depositary); provided, however, that interest payable at
Maturity will be payable to the person to whom principal shall be payable. 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 owner
on such next Regular Record Date. Interest rates and interest rate formulas are
subject to change by the Company from time to time but no such change will
affect any Note theretofore issued or which the Company has agreed to issue.
Unless otherwise indicated in the applicable Pricing Supplement, the Interest
Payment Dates and the Regular Record Dates for Fixed Rate Notes shall be as
described below under "Fixed Rate Notes". The Interest Payment Dates for
Floating Rate Notes shall be as indicated in the applicable Pricing Supplement
and in such Note, and unless otherwise specified in the applicable Pricing
Supplement, each Regular Record Date for a Floating Rate Note will be the
fifteenth day (whether or not a Business Day) next preceding each Interest
Payment Date.
 
  If any Interest Payment Date, other than at Maturity, for any Floating Rate
Note would otherwise be a day that is not a Business Day, such Interest Payment
Date shall be postponed to the next day that is a Business Day, except that in
the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Payment Date shall be the immediately preceding
Business Day. If the Maturity for any Fixed Rate Note or Floating Rate Note or
the Interest Payment Date for any Fixed Rate Note falls on a day which is not a
Business Day, payment of principal, premium, if any, and interest with respect
to such Note will be paid on the next succeeding Business Day with the same
force and effect as if made on such date and no interest on such payment will
accrue from and after such date.
 
  "Business Day" means any day (other than a Saturday or Sunday) on which
banking institutions in The City of New York and the City of Chicago, Illinois
are open for business (and, (i) with respect to LIBOR Notes, which is also a
London Banking Day, and (ii) with respect to Notes denominated in a Specified
Currency other than U.S. dollars, on which banking institutions in the
principal financial center of the country of the Specified Currency are open
for business).
 
  Unless otherwise specified in a Pricing Supplement, all percentages resulting
from any calculation on Floating Rate Notes will be rounded, if necessary, to
the nearest one hundred-thousandth of a percentage point, with five one-
millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545)
being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being
rounded to 9.87654% (or .0987654)), and 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 upward).
 
  The interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of
interest, subject to certain exceptions, for any loan in an amount less than
$250,000 is 16% per annum and for any loan in the amount of $250,000 or more
but less than $2,500,000 is 25% per annum on a simple interest basis. This
limit may not apply to loans of $2,500,000 or more.
 
FIXED RATE NOTES
 
  Each Fixed Rate Note will bear interest at the annual rate specified therein
and in the applicable Pricing Supplement. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Payment Dates for the Fixed Rate
Notes will be on March 15 and September 15 of each year and the Regular Record
Dates will be on March 1 and September 1 of each year. Unless otherwise
specified in the applicable Pricing Supplement, the first payment of interest
on any Fixed Rate Note originally issued between a Regular Record Date and
 
                                      S-6

 
an Interest Payment Date shall be made on the Interest Payment Date following
the succeeding Regular Record Date. Unless otherwise specified in the
applicable Pricing Supplement, interest on Fixed Rate Notes will be computed
and paid on the basis of a 360-day year of twelve 30-day months.
 
FLOATING RATE NOTES
 
  Except as provided below and unless otherwise specified in the applicable
Pricing Supplement, interest on Floating Rate Notes will be payable in the case
of Floating Rate Notes with a daily, weekly or monthly Interest Reset Date (as
defined below) on the third Wednesday of each month or on the third Wednesday
of March, June, September and December, as specified in the applicable Pricing
Supplement; in the case of Floating Rate Notes with a quarterly Interest Reset
Date, on the third Wednesday of March, June, September and December of each
year; in the case of Floating Rate Notes with a semi-annual Interest Reset
Date, on the third Wednesday of two months of each year, as specified in the
applicable Pricing Supplement; and in the case of Floating Rate Notes with an
annual Interest Reset Date, on the third Wednesday of one month of each year,
as specified in the applicable Pricing Supplement.
 
  The applicable Pricing Supplement will specify the Issue Price, the interest
rate basis, the interest payment period, the Spread and/or Spread Multiplier,
if any, and the maximum or minimum interest rate limitation, if any, applicable
to each Floating Rate Note. In addition, such Pricing Supplement will define or
particularize for each Note the following terms, if applicable: the period to
maturity of the instrument or obligation on which the interest rate formula is
based (the "Index Maturity"), Initial Interest Rate, Interest Payment Dates,
Regular Record Dates and Interest Reset Dates with respect to such Note.
 
  The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually, as specified in the applicable
Pricing Supplement. Unless otherwise specified in the applicable Pricing
Supplement, the date or dates on which interest will be reset (each an
"Interest Reset Date") will be, in the case of Floating Rate Notes that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case
of any Treasury Rate Notes that reset weekly, the Tuesday of each week (except
as provided below); in the case of Floating Rate Notes that reset monthly, the
third Wednesday of each month; in the case of Floating Rate Notes that reset
quarterly, the third Wednesday of March, June, September and December; in the
case of Floating Rate Notes that reset semi-annually, the third Wednesday of
two months of each year, as specified in the applicable Pricing Supplement; and
in the case of Floating Rate Notes that reset annually, the third Wednesday of
one month of each year, as specified in the applicable Pricing Supplement;
provided, however, that (i) the interest rate in effect from the date of issue
to the first Interest Reset Date with respect to a Floating Rate Note (the
"Initial Interest Rate") will be as set forth in the applicable Pricing
Supplement and (ii) unless otherwise specified in the applicable Pricing
Supplement, the interest rate in effect for the ten days immediately prior to
maturity will be that in effect on the tenth day preceding such maturity. If
the Interest Reset Date for any Floating Rate Note would otherwise be a day
that is not a Business Day, the Interest Reset Date for such Floating Rate Note
shall be postponed to the next day that is a Business Day, 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.
 
  The interest determination date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note, a Federal Funds Rate Note or a Prime Rate Note (the
"Commercial Paper Interest Determination Date", the "Federal Funds Interest
Determination Date" and the "Prime Interest Determination Date", respectively)
will be the second Business Day prior to the Interest Reset Date. 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")
 
                                      S-7

 
will be the day of the week on which Treasury bills would normally be auctioned
in the week in which such Interest Reset Date falls. 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.
 
  Unless otherwise specified in the applicable Pricing Supplement, interest
payments on an Interest Payment Date for a Floating Rate Note will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid (or from and including the date of
issue if no interest has been paid with respect to such Floating Rate Note) to,
but excluding, such Interest Payment Date or Maturity, as the case may be.
However, in the case of Floating Rate Notes that reset daily or weekly, unless
otherwise specified in the applicable Pricing Supplement, interest payable on
any Interest Payment Date, other than interest payable on any date on which
principal for such Note is payable, will include interest accrued only from,
but excluding, the last date in respect of which interest has been paid (or
from and including the date of issue if no interest has been paid with respect
to such Floating Rate Note) through and including the Regular Record Date
immediately preceding the applicable Interest Payment Date, except that the
interest payment at the maturity date will include interest accrued through,
but excluding, such maturity date. Accordingly, any Floating Rate Note that has
a rate of interest which is reset daily or weekly will bear interest from and
including its issue date or the day following the most recent Regular Record
Date to which interest on such Note has been paid or duly provided for. Accrued
interest from the date of issue or from the last date to which interest has
been paid will be calculated by multiplying the face amount of a Note by an
accrued interest factor. This accrued interest factor will be computed by
adding together the interest factors calculated for each day in the period for
which accrued interest is being calculated. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor for each such day will be
computed by dividing the interest rate applicable to such day by 360, in the
case of Commercial Paper Rate Notes, Federal Funds Rate Notes, Prime Rate
Notes, and LIBOR Notes, or by the actual number of days in the year, in the
case of Treasury Rate Notes. The interest rate in effect on each day for a
Floating Rate Note will be (a) if such day is an Interest Reset Date, the
interest rate (calculated with reference to the Spread and/or Spread
Multiplier, if any) with respect to the interest determination date pertaining
to such Interest Reset Date or, (b) if such day is not an Interest Reset Date,
the interest rate (calculated with reference to the Spread and/or Spread
Multiplier, if any) with respect to the interest determination date pertaining
to the next preceding Interest Reset Date. Notwithstanding the foregoing, the
interest rate in effect on any Floating Rate Note shall be subject to any
maximum or minimum interest rate limitation referred to above.
 
  The applicable Pricing Supplement shall specify a calculation agent (the
"Calculation Agent") with respect to any issue of Floating Rate Notes. The
Calculation Agent for each Interest Reset Date will determine the interest rate
as described below. The Company will notify the Paying Agent of each
determination of the interest rate applicable to any such Floating Rate Note
promptly after such determination is made. The Paying Agent will, upon the
request of the holder of any Floating Rate Note, provide the interest rate then
in effect and, if determined, 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 Note. Unless otherwise specified in the applicable Pricing
Supplement, the "Calculation Date", where applicable, pertaining to any
interest determination date will be the earlier of (i) 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 (ii) the Business Day preceding the
applicable Interest Payment Date or the Maturity, as the case may be.
 
  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) specified in the Commercial
Paper Rate Notes and in the applicable Pricing Supplement.
 
                                      S-8

 
  Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) of the rate on
that date for commercial paper having the Index Maturity designated in the
applicable Pricing Supplement as such rate is 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 by 9:00 a.m.,
New York City time, on the 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 that Commercial Paper Interest Determination Date
for commercial paper having the Index Maturity designated 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 Calculation Date such rate is not yet
published in Composite Quotations, the Commercial Paper 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 of
the offered rates of three leading dealers of commercial paper in The City of
New York selected by the Calculation Agent as of 11:00 a.m., New York City
time, on that Commercial Paper Interest Determination Date, for commercial
paper having the Index Maturity designated in the applicable Pricing Supplement
placed for an industrial issuer whose bond rating is "AA", or the equivalent,
from a nationally recognized securities 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 with respect to such
Commercial Paper Interest Determination Date will be the Commercial Paper Rate
in effect on such Commercial Paper Interest Determination Date.
 
  "Money Market Yield" shall be a yield calculated in accordance with the
following formula:
 
                                          DX360    X100
                      Money Market      ----------
                      Yield=             360-(D x
                                            M)
 
where "D" refers to the per annum rate for the 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.
 
  Federal Funds Rate Notes. Federal Funds Rate Notes will bear interest at the
interest rates (calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in the Federal Funds Rate
Notes and in the applicable Pricing Supplement.
 
  Unless otherwise specified in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on that day for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)" or, if not so published by 9:00 a.m.,
New York City time, on the Calculation Date pertaining to such Federal Funds
Interest Determination Date, the Federal Funds 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 not yet
published by 3:00 p.m., New York City time, on the Calculation Date pertaining
to such Federal Funds Interest Determination Date, the Federal Funds Rate for
such Federal Funds Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight Federal Funds arranged by three leading dealers of
Federal Funds transactions in The City of New York selected by the Calculation
Agent as of 9:00 a.m., New York City time, on such Federal Funds Interest
Determination Date; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate will be the Federal Funds Rate in effect on
such Federal Funds Interest Determination Date.
 
  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)
specified in the LIBOR Notes and in the applicable Pricing Supplement.
 
                                      S-9

 
  Unless otherwise specified in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions:
 
    (i) With respect to a LIBOR Interest Determination Date, LIBOR will be
  either: (a) if "LIBOR Reuters" is specified in the applicable Pricing
  Supplement, the arithmetic mean of the offered rates (unless the specified
  Designated LIBOR Page (as defined below) by its terms provides only for a
  single rate, in which case such single rate shall be used) for deposits in
  the Index Currency having the Index Maturity designated in the applicable
  Pricing Supplement, commencing on such LIBOR Interest Determination Date,
  that appear on the Designated LIBOR Page as of 11:00 a.m., London time, on
  that LIBOR Interest Determination Date, if at least two such offered rates
  appear (unless, as aforesaid, only a single rate is required) on such
  Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified in the
  applicable Pricing Supplement, the rate for deposits in the Index Currency
  having the Index Maturity designated in the applicable Pricing Supplement,
  commencing on such LIBOR Interest Determination Date, that appears on the
  Designated LIBOR Page as of 11:00 a.m., London time, on that LIBOR Interest
  Determination Date. If fewer than two offered rates appear (if "LIBOR
  Reuters" is specified in the applicable Pricing Supplement) or no rate
  appears (if "LIBOR Telerate" is specified in the applicable Pricing
  Supplement), LIBOR in respect of the related Interest Determination Date
  will be determined as if the parties had specified the rate described in
  clause (ii) below.
 
    (ii) With respect to a LIBOR Interest Determination Date on which fewer
  than two offered rates appear (if "LIBOR Reuters" is specified in the
  applicable Pricing Supplement) or no rate appears (if "LIBOR Telerate" is
  specified in the applicable Pricing Supplement), the Calculation Agent will
  request the principal London offices of each of four major reference banks
  in the London interbank market, as selected by the Calculation Agent, to
  provide the Calculation Agent with its offered quotation for deposits in
  the Index Currency for the period of the Index Maturity designated in the
  applicable Pricing Supplement, commencing on the second London Banking Day
  immediately following such LIBOR Interest Determination Date, to prime
  banks in the London interbank market at approximately 11:00 a.m., London
  time, on such LIBOR Interest Determination Date and in a principal amount
  of not less than $1,000,000 (or the equivalent in the Index Currency, if
  the Index Currency is not the U.S. dollar) that is representative for a
  single transaction in such Index Currency in such market at such time. If
  at least two such quotations are provided, LIBOR determined on such LIBOR
  Interest Determination Date will be the arithmetic mean of such quotations.
  If fewer than two quotations are provided, LIBOR determined on such LIBOR
  Interest Determination Date will be the arithmetic mean of the rates quoted
  at approximately 11:00 a.m. (or such other time specified in the applicable
  Pricing Supplement), in the applicable principal financial center for the
  country of the Index Currency on such LIBOR Interest Determination Date, by
  three major banks in such principal financial center selected by the
  Calculation Agent for loans in the Index Currency to leading European
  banks, having the Index Maturity designated in the applicable Pricing
  Supplement and in a principal amount of not less than $1,000,000 commencing
  on the second London Banking Day immediately following such LIBOR Interest
  Determination Date (or the equivalent in the Index Currency, if the Index
  Currency is not the U.S. dollar) that is representative for a single
  transaction in such Index Currency in such market at such time; provided,
  however, that if the banks so selected by the Calculation Agent are not
  quoting as mentioned in this sentence, LIBOR with respect to such LIBOR
  Interest Determination Date will be LIBOR in effect on such LIBOR Interest
  Determination Date.
 
  "Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. dollars.
 
  "Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated in
the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable Index Currency, or (b) if "LIBOR Telerate" is
designated in the applicable Pricing Supplement, the display on the Dow Jones
Telerate Service for the purpose of displaying the London interbank rates of
major banks for the applicable Index Currency. If neither
 
                                      S-10

 
LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing
Supplement, LIBOR for the applicable Index Currency will be determined as if
LIBOR Telerate (and, if the U.S. dollar is the Index Currency, Page 3750) had
been specified.
 
  "London Banking Day" means any day on which dealings in deposits in the Index
Currency are transacted in the London interbank market.
 
  Prime Rate Notes. Prime Rate Notes will bear interest at the interest rate
(calculated with reference to the Prime Rate and Spread and/or Spread
Multiplier, if any) specified in the Prime Rate Notes and in the applicable
Pricing Supplement.
 
  Unless otherwise specified in the applicable Pricing Supplement, "Prime Rate"
means, with respect to any Prime Interest Determination Date, the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan." If
such rate is not yet published by 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Prime Interest Determination Date, the
Prime Rate for such Prime Interest Determination Date will be the arithmetic
mean of the rates of interest publicly announced by each bank named on the
Reuters Screen NYMF Page (as defined below) as such bank's prime rate or base
lending rate as in effect for such Prime Interest Determination Date as quoted
on the Reuters Screen NYMF Page on such Prime Interest Determination Date, or,
if fewer than four such rates appear on the Reuters Screen NYMF Page for such
Prime Interest Determination Date, the rate shall be the arithmetic mean of the
prime rates quoted on the basis of the actual number of days in the year
divided by 360 as of the close of business on such Prime Interest Determination
Date by at least two of the three major money center banks in The City of New
York selected by the Calculation Agent from which quotations are requested. If
fewer than two quotations are provided, the Prime Rate shall be calculated by
the Calculation Agent and shall be determined as the arithmetic mean on the
basis of the prime rates in The City of New York by the appropriate number of
substitute banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, in each case having total equity
capital of at least U.S. $500 million and being subject to supervision or
examination by federal or state authority, selected by the Calculation Agent to
quote such rate or rates; provided, however, that if the banks or trust
companies selected as aforesaid by the Calculation Agent are not quoting as set
forth above, the Prime Rate will be the Prime Rate in effect on such Prime
Interest Determination Date. "Reuters Screen NYMF Page" means the display
designated as Page "NYMF" on the Reuters Monitor Money Rates Services (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).
 
  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) specified in the Treasury Rate Note and in the
applicable Pricing Supplement.
 
  Unless otherwise specified in the applicable 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 designated in the applicable
Pricing Supplement as published in H.15(519) under the heading "Treasury
bills--auction average (investment)" or, if not so published by 9:00 a.m., New
York City time, on the Calculation Date pertaining to such Treasury Interest
Determination Date, the auction average rate (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) 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 otherwise
reported as provided above by 3:00 p.m., New York City time, on such
Calculation Date or no such auction is held in a 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 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 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, for the issue
of Treasury bills with a remaining maturity closest to the Index
 
                                      S-11

 
Maturity designated in the applicable Pricing Supplement; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Treasury Rate with respect to such
Treasury Interest Determination Date will be the Treasury Rate in effect on
such Treasury Interest Determination Date.
 
RENEWABLE NOTES
 
  The Company may also issue from time to time variable rate renewable notes
(the "Renewable Notes") that will bear interest at the interest rate
(calculated with reference to a Base Rate and the Spread and/or Spread
Multiplier, if any) specified in the Renewable Notes and in the applicable
Pricing Supplement.
 
  The Renewable Notes will mature on an Interest Payment Date as specified in
the applicable Pricing Supplement (the "Initial Maturity Date"), unless the
maturity of all or any portion of the principal amount thereof is extended in
accordance with the procedures described below. On the Interest Payment Dates
in March and September in each year (unless different Interest Payment Dates
are specified in the applicable Pricing Supplement) (each such Interest Payment
Date, an "Election Date"), the maturity of the Renewable Notes will be extended
to the Interest Payment Date occurring twelve months after such Election Date,
unless the holder thereof elects to terminate the automatic extension of the
maturity of the Renewable Notes or of any portion thereof having a principal
amount of $1,000 or any multiple of $1,000 in excess thereof by delivering a
notice to such effect to the Paying Agent not less than nor more than a number
of days to be specified in the applicable Pricing Supplement prior to such
Election Date. Such option may be exercised with respect to less than the
entire principal amount of the Renewable Notes; provided that the principal
amount for which such option is not exercised is at least $1,000 or any larger
amount that is an integral multiple of $1,000. Notwithstanding the foregoing,
the maturity of the Renewable Notes may not be extended beyond the Final
Maturity Date, as specified in the applicable Pricing Supplement (the "Final
Maturity Date"). If the holder elects to terminate the automatic extension of
the maturity of any portion of the principal amount of the Renewable Notes and
such election is not revoked as described below, such portion will become due
and payable on the Interest Payment Date falling six months (unless another
period is specified in the applicable Pricing Supplement) after the Election
Date prior to which the holder made such election.
 
  An election to terminate the automatic extension of maturity may be revoked
as to any portion of the Renewable Notes having a principal amount of $1,000 or
any multiple of $1,000 in excess thereof by delivering a notice to such effect
to the Paying Agent on any day following the effective date of the election to
terminate the automatic extension of maturity and prior to the date 15 days
before the date on which such portion would otherwise mature. Such a revocation
may be made for less than the entire principal amount of the Renewable Notes
for which the automatic extension of maturity has been terminated; provided
that the principal amount of the Renewable Notes for which the automatic
extension of maturity has been terminated and for which such a revocation has
not been made is at least $1,000 or any larger amount that is an integral
multiple of $1,000. Notwithstanding the foregoing, a revocation may not be made
during the period from and including a Record Date to but excluding the
immediately succeeding Interest Payment Date.
 
  An election to terminate the automatic extension of the maturity of the
Renewable Notes, if not revoked as described above by the holder making the
election or any subsequent holder, will be binding upon such subsequent holder.
 
  The Renewable Notes may be redeemed in whole or in part at the option of the
Company on the Interest Payment Dates in each year specified in the applicable
Pricing Supplement, commencing with the Interest Payment Date specified in the
applicable Pricing Supplement, at a redemption price as stated in the
applicable Pricing Supplement, together with accrued and unpaid interest to the
date of redemption. Notwithstanding anything to the contrary in this Prospectus
Supplement, notice of redemption will be provided by mailing a notice of such
redemption to each holder by first class mail, postage prepaid, at least 180
days prior to the date fixed for redemption.
 
                                      S-12

 
INDEXED NOTES
 
  The Notes may be issued, from time to time, as Notes of which the principal
amount payable on a date more than nine months from the date of original issue
(the "Stated Maturity") and/or on which the amount of interest payable on an
Interest Payment Date will be determined by reference to currencies, currency
units, commodity prices, financial or non-financial indices or other factors
(the "Indexed Notes"), as indicated in the applicable Pricing Supplement.
Holders of Indexed Notes may receive a principal amount at maturity that is
greater than or less than the face amount of such Notes depending upon the
fluctuation of the relative value, rate or price of the specified index.
Specific information pertaining to the method for determining the principal
amount payable at maturity, a historical comparison of the relative value, rate
or price of the specified index and the face amount of the Indexed Note and
certain additional United States federal tax considerations will be described
in the applicable Pricing Supplement.
 
EXTENSION OF MATURITY
 
  The Pricing Supplement relating to certain Notes (other than an Amortizing
Note) may provide that the Company has the option to extend the maturity of
such Notes for one or more periods of one or more whole years (each an
"Extension Period") up to but not beyond the date (the "Final Maturity Date")
set forth in such Pricing Supplement. If the Company has such option with
respect to any such Note (an "Extendible Note"), the following procedures will
apply, unless modified as set forth in the applicable Pricing Supplement.
 
  The Company may exercise such option with respect to an Extendible Note by
notifying the Paying Agent of such exercise at least 45 but not more than 60
days prior to the maturity date originally in effect with respect to such Note
(the "Original Maturity Date") or, if the maturity date of such Note has
already been extended, prior to the maturity date then in effect (an "Extended
Maturity Date"). No later than 38 days prior to the Original Maturity Date or
an Extended Maturity Date, as the case may be (each, a "Maturity Date"), the
Paying Agent will mail to the holder of such Note a notice (the "Extension
Notice") relating to such Extension Period, by first class mail, postage
prepaid, setting forth (a) the election of the Company to extend the maturity
of such Note; (b) the new Extended Maturity Date; (c) the interest rate
applicable to the Extension Period (which, in the case of a Floating Rate Note,
will be calculated with reference to a Base Rate and the Spread and/or Spread
Multiplier, if any); and (d) the provisions, if any, for redemption during the
Extension Period, including the date or dates on which, the period or periods
during which and the price or prices at which such redemption may occur during
the Extension Period. Upon the mailing by the Paying Agent of an Extension
Notice to the holder of an Extendible Note, the maturity of such Note shall be
extended automatically, and, except as modified by the Extension Notice and as
described in the next paragraph, such Note will have the same terms it had
prior to the mailing of such Extension Notice.
 
  Notwithstanding the foregoing, not later than 10:00 a.m., New York City time,
on the twentieth calendar day prior to the Maturity Date then in effect for an
Extendible Note (or, if such day is not a Business Day, not later than 10:00
a.m., New York City time, on the immediately succeeding Business Day), the
Company may, at its option, revoke the interest rate provided for in the
Extension Notice and establish a higher interest rate (or, in the case of a
Floating Rate Note, a higher Spread and/or Spread Multiplier, if any) for the
Extension Period by causing the Paying Agent to send notice of such higher
interest rate (or, in the case of a Floating Rate Note, a higher Spread and/or
Spread Multiplier, if any) to the holder of such Note by first class mail,
postage prepaid, or by such other means as shall be agreed between the Company
and the Paying Agent. Such notice shall be irrevocable. All Extendible Notes
with respect to which the Maturity Date is extended in accordance with an
Extension Notice will bear such higher interest rate (or, in the case of a
Floating Rate Note, a higher Spread and/or Spread Multiplier, if any) for the
Extension Period, whether or not tendered for repayment.
 
  If the Company elects to extend the maturity of an Extendible Note, the
holder of such Note will have the option to require the Company to repay such
Note on the Maturity Date then in effect at a price equal to
 
                                      S-13

 
the principal amount thereof plus any accrued and unpaid interest to such date.
In order for an Extendible Note to be repaid on such Maturity Date, the holder
thereof must follow the procedures set forth below under "Repayment and
Repurchase" for optional repayment, except that the period for delivery of such
Note or notification to the Paying Agent shall be at least 25 but not more than
35 days prior to the Maturity Date then in effect and except that a holder who
has tendered an Extendible Note for repayment pursuant to an Extension Notice
may, by written notice to the Paying Agent, revoke any such tender for
repayment until 3:00 p.m., New York City time, on the twentieth calendar day
prior to the Maturity Date then in effect (or if such day is not a Business
Day, until 3:00 p.m., New York City time, on the immediately succeeding
Business Day).
 
REDEMPTION
 
  Although Notes will not generally be redeemable prior to maturity, the
Company in the Pricing Supplement relating to a Note may specify that such Note
will be redeemable at the option of the Company on a date or dates specified
prior to maturity at a price or prices, set forth in the applicable Pricing
Supplement, together with accrued interest to the date of redemption. The Notes
will not be subject to any sinking fund. Unless otherwise specified in the
applicable Pricing Supplement, the Company may redeem any of the Notes which
are redeemable and remain outstanding either in whole or from time to time in
part, upon not less than 30, nor more than 60, days' notice. If less than all
of the Notes with like tenor and terms are to be redeemed, the Notes to be
redeemed shall be selected by the applicable Note Registrar by such method as
such Note Registrar shall deem fair and appropriate.
 
REPAYMENT AND REPURCHASE
 
  Although Notes will not generally be repayable at the option of the holder
prior to maturity, the Company in the Pricing Supplement relating to a Note may
specify that such Note will be repayable at the option of the holder on a date
or dates specified prior to maturity at a price or prices set forth in the
applicable Pricing Supplement, together with accrued interest to the date of
repayment.
 
  Unless otherwise specified in the applicable Pricing Supplement, in order for
a Note to be repaid, the Paying Agent must receive at least 30, but not more
than 45, days, prior to the repayment date (i) the Note with the form entitled
"Option to Elect Repayment" on the reverse of the Note duly completed or (ii) a
telegram, telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or trust company in the United States of America setting
forth the name of the holder of the Note, the principal amount of the Note, the
principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of the Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that the Note to be
repaid with the form entitled "Option to Elect Repayment" on the reverse of the
Note duly completed will be received by the Paying Agent not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter and such Note and form duly completed are received by the Paying Agent
by such fifth Business Day. Except in the case of Renewable Notes or Extendible
Notes, and unless otherwise specified in the applicable Pricing Supplement,
exercise of the repayment option by the holder of a Note shall be irrevocable.
The repayment option may be exercised by the holder of a Note for less than the
entire principal amount of the Note provided that the principal amount of the
Note remaining outstanding after repayment is an authorized denomination.
 
  If a Note is represented by a Global Security, the Depositary's nominee will
be the holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the Depositary's nominee
will timely exercise a right to repayment with respect to a particular Note,
the beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers
and, accordingly, each beneficial
 
                                      S-14

 
owner should consult the broker or other direct or indirect participant through
which it holds an interest in a Note in order to ascertain the cut-off time by
which such an instruction must be given in order for timely notice to be
delivered to the Depositary.
 
  The Company may at any time purchase Notes at any price in the open market or
otherwise. Notes so purchased by the Company may be held or resold or, at the
discretion of the Company, may be surrendered to the applicable Trustee for
cancellation.
 
BOOK-ENTRY SYSTEM
 
  Upon issuance, all Book-Entry Notes denominated in the same currency and
having the same issue date, rank (senior or subordinated), maturity date,
redemption provisions, repayment provisions, Interest Payment Dates and, in the
case of Fixed Rate Notes, interest rate or, in the case of Floating Rate Notes,
interest rate basis, Initial Interest Rate, Index Maturity, Interest Reset
Dates, Spread or Spread Multiplier, if any, minimum interest rate, if any, and
maximum interest rate, if any, will be represented by a single Global Security.
Each Global Security representing Book-Entry Notes will be deposited with, or
on behalf of, The Depository Trust Company, New York, New York (the
"Depositary") or such other depositary as is specified in the Pricing
Supplement, and registered in the name of a nominee of the Depositary. Book-
Entry Notes will not be exchangeable for certificated Notes and, except under
the circumstances described below, will not otherwise be issuable in definitive
form.
 
  The Depositary has advised the Company and the Agents as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary was created to hold securities of its participants
and to facilitate the clearance and settlement of securities transactions among
its participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. The Depositary's participants include
securities brokers and dealers (including the Agents), banks, trust companies,
clearing corporations, and certain other organizations, some of whom (and/or
their representatives) own the Depositary. Access to the Depositary's book-
entry system is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
 
  If the Depositary is at any time unwilling, unable or ineligible to continue
as depositary and a successor depositary is not appointed by the Company within
90 days, the Company will issue individual Notes in definitive form in exchange
for Book-Entry Notes. In addition, the Company may at any time determine not to
have Notes represented by one or more Book-Entry Notes, and, in such event,
will issue individual Notes in definitive form in exchange for each Book-Entry
Note representing all such Notes. In either instance, an owner of a beneficial
interest in a Book-Entry Note will be entitled to physical delivery of Notes in
definitive form equal in principal amount to such beneficial interest and to
have such Notes registered in its name. Individual Notes so issued in
definitive form will be issued in denominations of $1,000 and integral
multiples of $1,000 in excess thereof and will be issued in registered form
only, without coupons.
 
  A further description of the Depositary's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the Prospectus under
"Description of Debt Securities--General--Global Securities". The Depositary
has confirmed to the Company, the Agents and the Trustees that it intends to
follow such procedures.
 
                                      S-15

 
                             FOREIGN CURRENCY RISKS
 
EXCHANGE RATES AND EXCHANGE CONTROLS
 
  Any investment in Notes that are denominated in, or the payment of which is
related to the value of, a Specified Currency other than U.S. dollars entails
significant risks that are not associated with a similar investment in a
security denominated in U.S. dollars. Such risks include, without limitation,
the possibility of significant changes in rates of exchange between the U.S.
dollar and the various foreign currencies (or composite currencies) and the
possibility of the imposition or modification of exchange controls by either
the U.S. or a foreign government. Such risks generally depend on economic and
political events over which the Company has no control. In recent years, rates
of exchange between U.S. dollars and certain foreign currencies have been
highly volatile and such volatility may be expected to continue in the future.
Fluctuations in any particular exchange rate that have occurred in the past are
not necessarily indicative, however, of fluctuations in such rate that may
occur during the term of any Note. Depreciation against the U.S. dollar of the
currency in which a Note is payable would result in a decrease in the effective
yield of such Note below its coupon rate and, in certain circumstances, could
result in a loss to the investor on a U.S. dollar basis. In addition, depending
on the specific terms of a currency-linked Note, changes in exchange rates
relating to any of the currencies involved may result in a decrease in its
effective yield and, in certain circumstances, could result in a loss of all or
a substantial portion of the principal of a Note to the investor.
 
  THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING
SUPPLEMENT OR MULTI-CURRENCY PROSPECTUS SUPPLEMENT DO NOT DESCRIBE ALL THE
RISKS OF AN INVESTMENT IN NOTES DENOMINATED IN, OR THE PAYMENT OF WHICH IS
RELATED TO THE VALUE OF, A FOREIGN CURRENCY OR A COMPOSITE CURRENCY AND THE
COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF SUCH
RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS
MAY CHANGE FROM TIME TO TIME. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN NOTES
DENOMINATED IN, OR THE PAYMENT OF WHICH IS RELATED TO THE VALUE OF, SPECIFIED
CURRENCIES OTHER THAN U.S. DOLLARS. SUCH NOTES ARE NOT AN APPROPRIATE
INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN
CURRENCY TRANSACTIONS.
 
  Except as set forth below in "Certain U.S. Federal Income Tax Considerations-
Non-U.S. Holders," the information set forth in this Prospectus Supplement is
directed to prospective purchasers who are United States residents, and the
Company disclaims any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any matters
that may affect the purchase, holding or receipt of payments of principal of,
premium, if any, and interest on the Notes. Such persons should consult their
own counsel with regard to such matters.
 
  Governments have imposed from time to time, and may in the future impose,
exchange controls which could affect exchange rates as well as the availability
of a specified foreign currency at the time of payment of principal of,
premium, if any, or interest on a Note. Even if there are no actual exchange
controls, it is possible that the Specified Currency for any particular Note
not denominated in U.S. dollars would not be available when payments on such
Note are due. In that event, the Company would make required payments in U.S.
dollars on the basis of the Market Exchange Rate on the date of such payment,
or if such rate of exchange is not then available, on the basis of the Market
Exchange Rate as of the most recent practicable date. See "Description of
Notes--Payment Currency."
 
  With respect to any Note denominated in, or the payment of which is related
to the value of, a foreign currency or currency unit, the applicable Pricing
Supplement or Multi-Currency Prospectus Supplement will include information
with respect to applicable current exchange controls, if any, and historic
exchange rate
 
                                      S-16

 
information on such currency or currency unit. The information contained
therein shall constitute a part of this Prospectus Supplement and is furnished
as a matter of information only and should not be regarded as indicative of the
range of or trends in fluctuations in currency exchange rates that may occur in
the future.
 
GOVERNING LAW AND JUDGMENTS
 
  The Notes will be governed by and construed in accordance with the laws of
the State of New York. In the event an action based on Notes denominated in a
Specified Currency other than U.S. dollars were commenced in a court in the
United States, it is likely that such court would grant judgment relating to
the Notes only in U.S. dollars. If an action based on Notes denominated in a
Specified Currency other than U.S. dollars were commenced in a New York court,
however, such court should render or enter a judgment or decree in the
Specified Currency. Such judgment should then be converted into U.S. dollars at
the rate of exchange prevailing on the date of entry of the judgment or decree.
 
                 CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
 
  The following is a summary of the principal U.S. Federal tax consequences
resulting from the beneficial ownership of Notes by certain persons. This
summary does not purport to consider all the possible U.S. Federal tax
consequences of the purchase, ownership or disposition of the Notes and is not
intended to reflect the individual tax position of any beneficial owner. It
deals only with Notes and currencies or composite currencies other than U.S.
dollars ("Foreign Currency") held as capital assets. Moreover, except as
expressly indicated, it addresses initial purchasers and does not address
beneficial owners with a special tax status or special tax situations, such as
dealers in securities or currencies, Notes (or Foreign Currency) held as a
hedge against currency risks or as part of a straddle with other investments or
as part of a "synthetic security" or other integrated investment (including a
"conversion transaction") comprised of a Note and one or more other
investments, or situations in which the functional currency of the beneficial
owner is not the U.S. dollar. Except to the extent discussed below under "Non-
U.S. Holders", this summary is not applicable to non-United States persons not
subject to U.S. Federal income tax on their worldwide income. This summary is
based upon the U.S. Federal tax laws and regulations as now in effect and as
currently interpreted and does not take into account possible changes in such
tax laws or such interpretations, any of which may be applied retroactively. It
does not include any description of the tax laws of any state, local or foreign
governments that may be applicable to the Notes or holders thereof. Persons
considering the purchase of Notes should consult their own tax advisors
concerning the application of the U.S. Federal tax laws to their particular
situations as well as any consequences to them under the laws of any other
taxing jurisdictions.
 
U.S. HOLDERS
 
 Payments of Interest
 
  In general, interest on a Note, whether payable in U.S. dollars or a Foreign
Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a
beneficial owner who or which is (i) a citizen or resident of the United
States, (ii) a corporation created or organized under the laws of the United
States or any State thereof (including the District of Columbia) or (iii) a
person otherwise subject to United States Federal income taxation on its
worldwide income (a "U.S. Holder") as ordinary income at the time it is
received or accrued, depending on the holder's method of accounting for tax
purposes. If an interest payment is denominated in or determined by reference
to a Foreign Currency, then special rules, described below under "Foreign
Currency Notes", apply.
 
 Original Issue Discount
 
  The following discussion summarizes the United States Federal income tax
consequences to holders of Notes issued with original issue discount ("OID").
The basic rules for reporting OID are contained in the Internal Revenue Code of
1986, as amended (the "Code"). On February 2, 1994, the Treasury Department
issued final regulations (the "OID Regulations"), which expand and illustrate
the rules provided by the Code.
 
                                      S-17

 
  Special rules apply to OID on a Discount Note that is denominated in Foreign
Currency. See "Foreign Currency Notes--Foreign Currency Discount Notes".
 
  General. A Note will be treated as issued with OID (a "Discount Note") if the
excess of the Note's "stated redemption price at maturity" over its issue price
is greater than a de minimis amount (set forth in the Code and the OID
Regulations). Generally, the issue price of a Note (or any Note that is part of
an issue of Notes) will be the first price at which a substantial amount of
Notes that are part of such issue of Notes are sold. Under the OID Regulations,
the "stated redemption price at maturity" of a Note is the sum of all payments
provided by the Note that are not payments of "qualified stated interest". A
"qualified stated interest" payment includes any stated interest payment on a
Note that is unconditionally payable at least annually at a single fixed rate
(or at certain floating rates) that appropriately takes into account the length
of the interval between stated interest payments. The Pricing Supplement will
state whether a particular issue of Notes will constitute an issue of Discount
Notes.
 
  In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes "de minimis
OID". Under the OID Regulations, unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, such a
Note will not be treated as issued with OID (in which case the following
paragraphs under "Original Issue Discount" will not apply) and a U.S. Holder of
such a Note will recognize capital gain with respect to such de minimis OID as
stated principal payments on the Note are made. The amount of such gain with
respect to each such payment will equal the product of the total amount of the
Note's de minimis OID and a fraction, the numerator of which is the amount of
the principal payment made and the denominator of which is the stated principal
amount of the Note.
 
  In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, a Note may be a
Discount Note where, among other things, (i) a Note bearing interest at a
floating rate (a "Floating Rate Note") provides for a maximum interest rate or
a minimum interest rate that is reasonably expected as of the issue date to
cause the yield on the debt instrument to be significantly less, in the case of
a maximum rate, or more, in the case of a minimum rate, than the expected yield
determined without the maximum or minimum rate, as the case may be; (ii) a
Floating Rate Note provides for significant front-loading or back-loading of
interest; or (iii) a Note bears interest at a floating rate in combination with
one or more floating or fixed rates. Notice will be given in the applicable
Pricing Supplement when the Company determines that a particular Note will be a
Discount Note. Unless specified in the applicable Pricing Supplement, Floating
Rate Notes will not be Discount Notes.
 
  The Code and the OID Regulations provide rules that require a U.S. Holder of
a Discount Note having a maturity of more than one year from its date of issue
to include OID in gross income before the receipt of cash attributable to such
income, without regard to the holder's method of accounting for tax purposes.
The amount of OID includible in gross income by a U.S. Holder of a Discount
Note is the sum of the "daily portions" of OID with respect to the Discount
Note for each day during the taxable year or portion of the taxable year in
which the U.S. Holder holds such Discount Note ("accrued OID"). The daily
portion is determined by allocating to each day in any "accrual period" a pro
rata portion of the OID allocable to that accrual period. Under the OID
Regulations, accrual periods with respect to a Note may be any set of periods
(which may be of varying lengths) selected by the U.S. Holder as long as (i) no
accrual period is longer than one year and (ii) each scheduled payment of
interest or principal on the Note occurs on the first day or final day of an
accrual period.
 
  The amount of OID allocable to an accrual period equals the excess of (a) the
product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount
 
                                      S-18

 
Note allocable to the accrual period. The "adjusted issue price" of a Discount
Note at the beginning of the first accrual period is the issue price and at the
beginning of any accrual period thereafter is (x) the sum of the issue price of
such Discount Note, the accrued OID for each prior accrual period (determined
without regard to the amortization of any acquisition premium or bond premium,
which are discussed below), and the amount of any qualified stated interest on
the Note that has accrued prior to the beginning of the accrual period but is
not payable until a later date, less (y) any prior payments on the Discount
Note that were not qualified stated interest payments. If a payment (other than
a payment of qualified stated interest) is made on the first day of an accrual
period, then the adjusted issue price at the beginning of such accrual period
is reduced by the amount of the payment. If a portion of the initial purchase
price of a Note is attributable to interest that accrued prior to the Note's
issue date, the first stated interest payment on the Note is to be made within
one year of the Note's issue date and such payment will equal or exceed the
amount of pre-issuance accrued interest, then the U.S. Holder may elect to
decrease the issue price of the Note by the amount of pre-issuance accrued
interest, in which case a portion of the first stated interest payment will be
treated as a return of the excluded pre-issuance accrued interest and not as an
amount payable on the Note.
 
  The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length)
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Note (other than any
payment of qualified stated interest) over the Note's adjusted issue price as
of the beginning of such final accrual period. In addition, if an interval
between payments of qualified stated interest on a Note contains more than one
accrual period, then the amount of qualified stated interest payable at the end
of such interval is allocated pro rata (on the basis of their relative lengths)
between the accrual periods contained in the interval.
 
  U.S. Holders of Discount Notes generally will have to include in income
increasingly greater amounts of OID over the life of the Note.
 
  Acquisition Premium. A U.S. Holder that purchases a Note at its original
issuance for an amount in excess of its issue price but less than its stated
redemption price at maturity (any such excess being "acquisition premium"), and
that does not make the election described below under "Original Issue
Discount--Election To Treat All Interest as Original Interest Discount", is
permitted to reduce the daily portions of OID by a fraction, the numerator of
which is the excess of the U.S. Holder's purchase price for the Note over the
issue price, and the denominator of which is the excess of the sum of all
amounts payable on the Note after the purchase date, other than payments of
qualified stated interest, over the Note's issue price. Alternatively, a U.S.
Holder may elect to compute OID accruals as described under "Original Issue
Discount--General" above, treating the U.S. Holder's purchase price as the
issue price.
 
  Optional Redemption. If the Company has an option to redeem a Note, or the
Holder has an option to cause a Note to be repurchased, prior to the Note's
stated maturity, such option will be presumed to be exercised if, by utilizing
any date on which such Note may be redeemed or repurchased as the maturity date
and the amount payable on such date in accordance with the terms of such Note
(the "redemption price") as the stated redemption price at maturity, the yield
on the Note would be (i) in the case of an option of the Company, lower than
its yield to stated maturity, or (ii) in the case of an option of the Holder,
higher than its yield to stated maturity. If such option is not in fact
exercised when presumed to be exercised, the Note would be treated solely for
OID purposes as if it were redeemed or repurchased, and a new Note were issued,
on the presumed exercise date for an amount equal to the Note's adjusted issue
price on that date.
 
  Short-Term Notes. Under the Code, special rules apply with respect to OID on
Notes that mature one year or less from the date of its issuance ("Short-Term
Notes"). In general, a cash basis U.S. Holder of a Short-Term Note is not
required to include OID in income as it accrues for United States Federal
income tax purposes unless it elects to do so. Accrual basis U.S. Holders and
certain other U.S. Holders, including banks, regulated investment companies,
dealers in securities and cash basis U.S. Holders who so elect, are required to
include OID in income as it accrues on Short-Term Notes on either a straight-
line basis or under the constant yield method (based on daily compounding), at
the election of the U.S. Holder. In the case of a
 
                                      S-19

 
U.S. Holders not required and not electing to include OID in income currently,
any gain realized on the sale or retirement of Short-Term Notes will be
ordinary income to the extent of the OID accrued on a straight-line basis
(unless an election is made to accrue the original issue discount under the
constant yield method) through the date of sale or retirement. U.S. Holders who
are not required and do not elect to include OID on Short-Term Notes in income
as it accrues will be required to defer deductions for interest on borrowings
allocable to Short-Term Notes in an amount not exceeding the deferred income
until the deferred income is realized.
 
  Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount",
if any, with respect to the Note (rather than the OID with respect to such
Note). Acquisition discount is the excess of the stated redemption price at
maturity of the Short-Term Note over the U.S. Holder's purchase price.
Acquisition discount will be treated as accruing on a ratable basis or, at the
election of the U.S. Holder, on a constant-yield basis.
 
  For purposes of determining the amount of OID subject to these rules, the OID
Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
 
 Notes Purchased at a Premium
 
  Under the Code, a U.S. Holder that purchases a Note for an amount in excess
of its principal amount will not be subject to the OID rules and may elect to
treat such excess as "amortizable bond premium", in which case the amount of
qualified stated interest required to be included in the U.S. Holder's income
each year with respect to interest on the Note will be reduced by the amount of
amortizable bond premium allocable (based on the Note's yield to maturity) to
such year. Any election to amortize bond premium shall apply to all bonds
(other than bonds the interest on which is excludible from gross income) held
by the U.S. Holder at the beginning of the first taxable year to which the
election applies or thereafter acquired by the U.S. Holder, and may not be
revoked without the consent of the Internal Revenue Service ("IRS"). See also
"Original Issue Discount--Election to Treat All Interest as Original Issue
Discount".
 
 Notes Purchased at a Market Discount
 
  A Note, other than a Short-Term Note, will be treated as issued at a market
discount (a "Market Discount Note") if the amount for which a U.S. Holder
purchased the Note is less than the Note's issue price, subject to a de minimis
rule similar to the rule relating to de minimis OID described under "Original
Issue Discount--General".
 
  In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note. Alternatively, a U.S.
Holder of a Market Discount Note may elect to include market discount in income
currently over the life of the Market Discount Note. Such an election applies
to all debt instruments with market discount acquired by the electing U.S.
Holder on or after the first day of the first taxable year to which the
election applies and may not be revoked without the consent of the IRS.
 
  Market discount accrues on a straight-line basis unless the U.S. Holder
elects to accrue such market discount on a constant yield to maturity basis.
Such an election shall apply only to the Note with respect to which it is made
and is irrevocable. A U.S. Holder of a Market Discount Note who does not elect
to include market discount in income currently generally will be required to
defer deductions for interest on borrowings allocable to such Note in an amount
not exceeding the accrued market discount on such Note until the maturity or
disposition of such Note.
 
  The market discount rules do not apply to a Short-Term Note.
 
 Election to Treat All Interest as Original Issue Discount
 
  Any U.S. Holder may elect to include in gross income all interest that
accrues on a Note using the constant yield method described above under the
heading "Original Issue Discount--General," with the modifications described
below. For purposes of this election, interest includes stated interest, OID,
de minimis
 
                                      S-20

 
OID, market discount (described above under "Notes Purchased at a Market
Discount"), acquisition discount, de minimis market discount and unstated
interest, as adjusted by any amortizable bond premium (described above under
"Notes Purchased at a Premium") or acquisition premium.
 
  In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
U.S. Holder's adjusted basis in the Note immediately after its acquisition, the
issue date of the Note will be the date of its acquisition by the electing U.S.
Holder, and no payments on the Note will be treated as payments of qualified
stated interest. This election will generally apply only to the Note with
respect to which it is made and may not be revoked without the consent of the
IRS. If this election is made with respect to a Note with amortizable bond
premium, then the electing U.S. Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on
which is excludible from gross income) held by such electing U.S. Holder as of
the beginning of the taxable year in which the Note with respect to which the
election is made is acquired or thereafter acquired. The deemed election with
respect to amortizable bond premium may not be revoked without the consent of
the IRS.
 
  If the election described above to apply the constant yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing U.S. Holder will be treated as having made the
election discussed above under "Notes Purchased at a Market Discount" to
include market discount in income currently over the life of all debt
instruments held or thereafter acquired by such U.S. Holder.
 
 Purchase, Sale and Retirement of the Notes
 
  General. A U.S. Holder's tax basis in a Note will generally be its U.S.
dollar cost (which, in the case of a Note purchased with a foreign currency,
will be the U.S. dollar value of the purchase price on the date of purchase),
increased by the amount of any OID or market discount (or acquisition discount,
in the case of a Short-Term Note) included in the U.S. Holder's income with
respect to the Note and the amount, if any, of income attributable to de
minimis OID included in the U.S. Holder's income with respect to the Note, and
reduced by the sum of (i) the amount of any payments that are not qualified
stated interest payments, and (ii) the amount of any amortizable bond premium
applied to reduce interest on the Note. A U.S. Holder generally will recognize
gain or loss on the sale or retirement of a Note equal to the difference
between the amount realized on the sale or retirement and the tax basis of the
Note. The amount realized on a sale or retirement for an amount in foreign
currency will be the U.S. dollar value of such amount on the date of sale or
retirement. Except to the extent described above under "Original Issue
Discount--Short Term Notes" or "Market Discount" or below under "Foreign
Currency Notes--Exchange Gain or Loss", and except to the extent attributable
to accrued but unpaid interest, gain or loss recognized on the sale or
retirement of a Note will be capital gain or loss and will be long-term capital
gain or loss if the Note was held for more than one year.
 
 Foreign Currency Notes
 
  Interest Payments. If an interest payment is denominated in or determined by
reference to a Foreign Currency, the amount of income recognized by a cash
basis U.S. Holder will be the U.S. dollar value of the interest payment, based
on the exchange rate in effect on the date of receipt, regardless of whether
the payment is in fact converted into U.S. dollars. Accrual basis U.S. Holders
may determine the amount of income recognized with respect to such interest
payment in accordance with either of two methods. Under the first method, the
amount of income recognized will be based on the average exchange rate in
effect during the interest accrual period (or, with respect to an accrual
period that spans two taxable years, the partial period within the taxable
year). Upon receipt of an interest payment (including a payment attributable to
accrued but unpaid interest upon the sale or retirement of a Note) determined
by reference to a Foreign Currency, an accrual basis U.S. Holder will recognize
ordinary income or loss measured by the difference between such average
exchange rate and the exchange rate in effect on the date of receipt,
regardless of whether the payment is in fact converted into U.S. dollars. Under
the second method, an accrual basis U.S. Holder may elect to translate interest
income into U.S. dollars at the exchange rate in effect on the last day of the
accrual period or, in the case of an accrual period that spans two taxable
years, at the exchange rate in
 
                                      S-21

 
effect on the last day of the partial period within the taxable year.
Additionally, if a payment of interest is actually received within 5 business
days of the last day of the accrual period or taxable year, an accrual basis
U.S. Holder applying the second method may instead translate such accrued
interest into U.S. dollars at the spot exchange rate in effect on the day of
actual receipt (in which case no exchange gain or loss will result). Any
election to apply the second method will apply to all debt instruments held by
the U.S. Holder at the beginning of the first taxable year to which the
election applies or thereafter acquired by the U.S. Holder and may not be
revoked without the consent of the IRS.
 
  Exchange of Amounts in Other than U.S. Dollars. Foreign Currency received as
interest on a Note or on the sale or retirement of a Note will have a tax basis
equal to its U.S. dollar value at the time such interest is received or at the
time of such sale or retirement, as the case may be. Foreign Currency that is
purchased will generally have a tax basis equal to the U.S. dollar value of the
Foreign Currency on the date of purchase. Any gain or loss recognized on a sale
or other disposition of a Foreign Currency (including its use to purchase Notes
or upon exchange for U.S. dollars) will be ordinary income or loss.
 
  Foreign Currency Discount Notes. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the
Foreign Currency and then translated into U.S. dollars in the same manner as
stated interest accrued by an accrual basis U.S. Holder. Upon receipt of an
amount attributable to original issue discount (whether in connection with a
payment of interest or the sale or retirement of a Note), a U.S. Holder may
recognize ordinary income or loss.
 
  Amortizable Bond Premium. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency,
and amortizable bond premium will reduce interest income in units of the
Foreign Currency. At the time amortized bond premium offsets interest income, a
U.S. Holder may realize ordinary income or loss, measured by the difference
between exchange rates at that time and at the time of the acquisition of the
Notes.
 
  Exchange Gain or Loss. Gain or loss recognized by a U.S. Holder on the sale
or retirement of a Note that is attributable to changes in exchange rates will
be treated as ordinary income or loss. However, exchange gain or loss is taken
into account only to the extent of total gain or loss realized on the
transaction.
 
INDEXED NOTES
 
  The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to currency indexed notes
or other indexed Notes.
 
NON-U.S. HOLDERS
 
  Subject to the discussion of backup withholding below, payments of principal
(and premium, if any) and interest (including OID) by the Company or any agent
of the Company (acting in its capacity as such) to any holder of a Note that is
not a U.S. Holder (a "Non-U.S. Holder") will not be subject to U.S. Federal
withholding tax, provided, in the case of interest (including OID), that (i)
the Non-U.S. Holder does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled to
vote, (ii) the Non-U.S. Holder is not a controlled foreign corporation for U.S.
tax purposes that is related to the Company (directly or indirectly) through
stock ownership and (iii) either (A) the Non-U.S. Holder certifies to the
Company or its agent under penalties of perjury that it is not a United States
person and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") and holds the Note certifies to the Company or its agent under
penalties of perjury that such statement has been received from the Non-U.S.
Holder by it or by another financial institution and furnishes the payor with a
copy thereof.
 
  If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest (including OID) on the Note is effectively connected with the
conduct of such trade or business, the Non-U.S. Holder,
 
                                      S-22

 
although exempt from the withholding tax discussed in the preceding paragraph,
may be subject to U.S. Federal income tax on such interest (or OID) in the same
manner as if it were a U.S. Holder. In addition, if the Non-U.S. Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30% of
its effectively connected earnings and profits for the taxable year, subject to
certain adjustments. For purposes of the branch profits tax, interest
(including OID) on a Note will be included in the earnings and profits of such
holder if such interest (or OID) is effectively connected with the conduct by
such holder of a trade or business in the United States. In lieu of the
certificate described in the preceding paragraph, such a holder must provide
the payor with a properly executed IRS Form 4224 to claim an exemption from
U.S. Federal withholding tax.
 
  Any capital gain, market discount or exchange gain realized on the sale,
exchange, retirement or other disposition of a Note by a Non-U.S. Holder will
not be subject to U.S. Federal income or withholding taxes if (i) such gain is
not effectively connected with a U.S. trade or business of the Non-U.S. Holder
and (ii) in the case of an individual, such Non-U.S. Holder (A) is not present
in the United States for 183 days or more in the taxable year of the sale,
exchange, retirement or other disposition or (B) does not have a tax home (as
defined in Section 911(d)(3) of the Code) in the United States in the taxable
year of the sale, exchange, retirement or other disposition and the gain is not
attributable to an office or other fixed place of business maintained by such
individual in the United States.
 
  Notes held by an individual who is neither a citizen nor a resident of the
United States for U.S. Federal tax purposes at the time of such individual's
death will not be subject to U.S. Federal estate tax, provided that the income
from such Notes was not or would not have been effectively connected with a
U.S. trade or business of such individual and that such individual qualified
for the exemption from U.S. Federal withholding tax (without regard to the
certification requirements) described above.
 
  PURCHASERS OF NOTES WHO ARE NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE POSSIBLE APPLICABILITY OF UNITED STATES
WITHHOLDING AND OTHER TAXES UPON INCOME REALIZED IN RESPECT OF THE NOTES.
 
INFORMATION REPORTING AND BACKUP WITHHOLDING
 
  For each calendar year in which the Notes are outstanding, the Company is
required to provide the IRS with certain information, including the holder's
name, address and taxpayer identification number (either the holder's Social
Security number or its employer identification number, as the case may be), the
aggregate amount of principal and interest paid (including OID, if any) to that
holder during the calendar year and the amount of tax withheld, if any. This
obligation, however, does not apply with respect to certain U.S. Holders,
including corporations, tax-exempt organizations, qualified pension and profit
sharing trusts and individual retirement accounts.
 
  In the event that a U.S. Holder subject to the reporting requirements
described above fails to supply its correct taxpayer identification number in
the manner required by applicable law or underreports its tax liability, the
Company, its agents or paying agents or a broker may be required to "backup"
withhold a tax equal to 31% of each payment of interest (including OID) and
principal (and premium, if any) on the Notes. This backup withholding is not an
additional tax and may be credited against the U.S. Holder's U.S. Federal
income tax liability, provided that the required information is furnished to
the IRS.
 
  Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by the Company or any agent thereof
(in its capacity as such) to a Non-U.S. Holder of a Note if such holder has
provided the required certification that it is not a United States person as
set forth in clause (iii) in the first paragraph under "Non-U.S. Holders"
above, or has otherwise established an exemption (provided that neither the
Company nor its agent has actual knowledge that the holder is a United States
person or that the conditions of any exemption are not in fact satisfied).
 
                                      S-23

 
  Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50
percent or more of whose gross income from all sources for the three-year
period ending with the close of its taxable year preceding the payment was
effectively connected with a U.S. trade or business, information reporting may
apply to such payments. Payment of the proceeds from a sale of a Note to or
through the U.S. office of a broker is subject to information reporting and
backup withholding unless the holder or beneficial owner certifies as to its
taxpayer identification number or otherwise establishes an exemption from
information reporting and backup withholding.
 
                              PLAN OF DISTRIBUTION
 
  The Notes are being offered on a continuing basis by the Company through the
Agents, who have agreed to use reasonable efforts to solicit offers to purchase
Notes. The Company will have the sole right to accept offers to purchase Notes
and may reject any offer to purchase Notes in whole or in part. An Agent will
have the right to reject any offer to purchase Notes solicited by it in whole
or in part. Payment of the purchase price of the Notes will be required to be
made in immediately available funds. The Company will pay an Agent, in
connection with sales of Notes, resulting from a solicitation made or an offer
to purchase received by such Agent, a commission ranging from .125% to .750% of
the principal amount of Notes to be sold, provided, however, that commissions
with respect to Notes maturing in thirty years or greater will be negotiated at
the time of issuance.
 
  The Company may also sell Notes to an Agent as principal for its own account
at discounts to be agreed upon at the time of sale. Such Notes may be resold to
investors and other purchasers at prevailing market prices, or prices related
thereto at the time of such resale, as determined by the Agent or, if so
agreed, at a fixed public offering price. 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. After
the initial public offering of Notes to be resold to investors and other
purchasers, the public offering price (in the case of Notes to be resold at a
fixed public offering price) concession and discount may be changed.
 
  The Company has reserved the right to sell, and may solicit and accept offers
to purchase, Notes directly to investors from time to time on its own behalf in
those jurisdictions in which it is permitted to do so. The Company may accept
(but not solicit) offers to purchase Notes through additional agents and may
appoint additional agents for the purpose of soliciting offers to purchase
Notes, in either case on terms substantially identical to the terms contained
in the Distribution Agreement. Such other agents, if any, will be named in the
applicable Pricing Supplement.
 
  The Company reserves the right to withdraw, cancel or modify the offer
without notice.
 
  An Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The Company and the
Agents have agreed to indemnify each other against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments
made in respect thereof. The Company has also agreed to reimburse the Agents
for certain expenses.
 
  The Company does not intend to apply for the listing of the Notes on a
national securities exchange. The Company has been advised by the Agents that
the Agents intend to make a market in the Notes, as permitted by applicable
laws and regulations. The Agents are not obligated to do so, however, and the
Agents may discontinue making a market at any time without notice. No assurance
can be given as to the liquidity of any trading market for the Notes.
 
  Concurrently with the offering of Notes through the Agents as described
herein, the Company may issue other Debt Securities pursuant to the Indentures
referred to herein.
 
                                      S-24

 
  The Agents and/or certain of their affiliates may engage in transactions with
and perform services for the Company and certain of its affiliates in the
ordinary course of business. One of the Agents, First Chicago Capital Markets,
Inc. ("FCCM"), is an affiliate of the Company. The participation of FCCM in the
offer and sale of the Notes as described herein complies and will comply with
Schedule E of the By-laws of the National Association of Securities Dealers,
Inc. regarding the offer and sale of securities of an affiliate. Any
obligations of FCCM are the sole obligations of FCCM and do not create any
obligations on the part of the Company or any other affiliate of FCCM.
 
  This Prospectus Supplement and Prospectus may be used by FCCM in connection
with offers and sales related to secondary market transactions in the Notes.
FCCM may act as principal or agent in such transactions. Such sales will be
made at prices related to prevailing market prices at the time of sale.
 
  In addition to offering Notes through the Agents as described herein, Debt
Securities which are medium-term notes and which may have terms substantially
similar to the terms of the Notes offered hereby may be offered concurrently
with the offering of the Notes, on a continuing basis outside the United States
by the Company or its agents. Any such Debt Securities sold by the Company or
its agents outside the United States will reduce the principal amount of Notes
which may be offered by this Prospectus Supplement and the Prospectus.
 
                                 LEGAL OPINIONS
 
  The validity of the Notes will be passed upon for the Company by Sherman I.
Goldberg, Esq., Executive Vice President, General Counsel and Secretary of the
Company and for the Agents by Cravath, Swaine & Moore, Worldwide Plaza, 825
Eighth Avenue, New York, New York 10019. Cravath, Swaine & Moore has
represented and continues to represent the Company from time to time in other
matters.
 
  As of April 30, 1994, Sherman I. Goldberg was the record and beneficial owner
of 64,757 shares of common stock of the Company and held options to purchase
120,410 shares of common stock of the Company.
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
  The following documents heretofore filed by First Chicago Corporation (the
"Company") with the Securities and Exchange Commission (the "Commission")
pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated herein by reference:
 
  (i) The Company's Annual Report on Form 10-K for the year ended December
      31, 1993;
 
  (ii) The Company's Quarterly Report on Form 10-Q for the quarter ended
       March 31, 1994; and
 
  (iii) The Company's Current Reports on Form 8-K dated January 17, 1994,
        February 9, 1994, February 11, 1994, April 8, 1994, April 13, 1994,
        May 16, 1994, July 8, 1994 and July 13, 1994.
 
  All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus Supplement
and prior to the termination of the offering of the Notes shall be deemed to be
incorporated by reference into this Prospectus Supplement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus Supplement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus Supplement.
 
  ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS SUPPLEMENT MAY OBTAIN WITHOUT
CHARGE, UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN, EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS.
REQUESTS SHOULD BE ADDRESSED TO FIRST CHICAGO CORPORATION, ONE FIRST NATIONAL
PLAZA, CHICAGO, ILLINOIS 60670, ATTENTION: INVESTOR RELATIONS, (312) 732-8013.
 
                                      S-25

 
PROSPECTUS
                           FIRST CHICAGO CORPORATION
           DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
      FOREIGN CURRENCY WARRANTS, STOCK-INDEX WARRANTS AND OTHER WARRANTS
        PREFERRED STOCK, DEPOSITARY SHARES AND PREFERRED STOCK WARRANTS
                             COMMON STOCK WARRANTS
  First Chicago Corporation (the "Company") may issue from time to time,
together or separately, (i) in one or more series, its unsecured debt
securities ("Debt Securities"), which may be either senior (the "Senior
Securities") or subordinated (the "Subordinated Securities") in priority of
payment, both of which may be convertible or exchangeable into common stock,
par value $5 per share, of the Company ("Common Stock"), preferred stock of
the Company ("Preferred Stock"), other Debt Securities, Debt Warrants, Common
Stock Warrants, Preferred Stock Warrants or Depositary Shares (each as defined
herein); (ii) warrants ("Debt Warrants") to purchase Debt Securities; (iii)
options, warrants or other rights relating to the exchange of certain
currencies ("Currency Warrants"); (iv) options, warrants or other rights
entitling the holder to receive an amount in cash determined by reference to
increases ("Stock-Index Call Warrants") and decreases ("Stock-Index Put
Warrants" and, collectively with Stock-Index Call Warrants, being referred to
herein as the "Stock-Index Warrants") in the level of a specified stock-index
which may be based on one or more U.S. or foreign stocks or a combination
thereof; (v) options, warrants or other rights relating to other items or
indices ("Other Warrants"); (vi) shares of Preferred Stock which may be
convertible into shares of Common Stock or exchangeable for Debt Securities;
(vii) shares of Preferred Stock represented by depositary shares ("Depositary
Shares"); (viii) warrants to purchase shares of Preferred Stock ("Preferred
Stock Warrants"); and (ix) warrants to purchase shares of Common Stock
("Common Stock Warrants"), in amounts, at prices and on terms to be determined
at the time of the offering. The Debt Warrants, Currency Warrants, Stock-Index
Warrants, Other Warrants, Preferred Stock Warrants and Common Stock Warrants
are collectively referred to herein as the "Warrants"; and the Debt
Securities, Warrants, shares of Preferred Stock and Depositary Shares are
collectively referred to herein as the "Securities".
  The Company may issue Securities for proceeds up to an aggregate of
$1,500,000,000, or the equivalent thereof if any of the Securities are
denominated in a foreign currency or a foreign currency unit, including the
European Currency Unit ("ECU"). The Securities of each series will be offered
on terms determined at the time of sale. The Securities may be sold for U.S.
dollars, foreign currencies or foreign currency units, and the principal of,
and any interest on, the Debt Securities may be payable in U.S. dollars,
foreign currencies or foreign currency units.
  The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Subordinated Securities will be
unsecured and subordinated as described under "Subordinated Securities".
  Unless otherwise specified in the Prospectus Supplement relating to
Subordinated Securities, payment of the principal of Subordinated Securities
may be accelerated only in the case of certain events involving the bankruptcy
or insolvency of the Company, and no right of acceleration will exist in the
case of default in the payment of principal or interest or in the performance
of any covenant.
  When a particular series of Securities, in respect of which this Prospectus
is being delivered, is offered, a supplement to this Prospectus (the
"Prospectus Supplement") setting forth certain terms of the offered Securities
will be delivered together with this Prospectus. The applicable Prospectus
Supplement, among other things and where applicable, will include: (i) with
regard to Debt Securities, the specific designation, priority, aggregate
principal amount, currency or currency unit, rate (or method of calculation)
and time of payment of any interest, authorized denominations, maturity,
offering price, place or places of payment, redemption terms, terms of any
repayment at the option of the holder, special provisions relating to Debt
Securities in bearer form, terms for sinking fund payments, terms for
conversion or exchange into other securities, provisions regarding original
issue discount securities and other terms of such Debt Securities; (ii) with
regard to Warrants, where applicable, the duration, aggregate amount, offering
price, exercise price, and detachability; (iii) with regard to Debt Warrants,
Preferred Stock Warrants and Common Stock Warrants, the applicable type and
amount of Securities covered thereby; (iv) with regard to Stock-Index Warrants
or Other Warrants, the applicable securities index or other items or indices
with respect to which such warrants shall apply and the method of determining
the cash value payable in connection with the exercise of such warrants; (v)
with regard to Currency Warrants, the currency to which U.S. Dollars will be
compared, the method of determining the cash value payable in connection with
the exercise of such Currency Warrants, the manner in which such Currency
Warrants may be exercised and any restrictions on exercise of such Currency
Warrants; (vi) with regard to Preferred Stock, the specific number of shares,
title, stated value and liquidation preference of each share, issuance price,
dividend rate or method of calculation, dividend periods, dividend payment
dates, any redemption or sinking fund provisions, any conversion or exchange
provisions, whether fractional interests in shares of Preferred Stock will be
offered through depositary arrangements and other specific terms of each
series of Preferred Stock; and (vii) in the case of Depositary Shares, the
fraction of a share of Preferred Stock which each such Depositary Share will
represent.
  The Prospectus Supplement will also contain information, where applicable,
about certain U.S. federal income tax considerations relating to, and any
listing on a securities exchange of, the Securities covered by the Prospectus
Supplement.
  The Securities may be sold by the Company directly, through agents
designated from time to time, through underwriting syndicates led by one or
more managing underwriters or through one or more underwriters acting alone.
If any agent of the Company, or any underwriter, is involved in the sale of
the Securities, the name of such agent or underwriter, the principal or stated
amount to be purchased by it, any applicable commissions or discounts and the
net proceeds to the Company from such sale will be set forth in, or may be
calculated from, the Prospectus Supplement. The Company may also issue
contracts under which the counterparty may be required to purchase Debt
Securities, Preferred Stock, Depositary Shares or Common Stock. Such contracts
would be issued with the Debt Securities, Preferred Stock, Depositary Shares
and/or Warrants in amounts, at prices and on terms to be set forth in the
applicable Prospectus Supplement. The aggregate net proceeds to the Company
from the sale of all the Securities will be the public offering or purchase
price of the Securities sold less the aggregate of such commissions and
discounts and other expenses of issuance and distribution. See "Plan of
Distribution".

THESE SECURITIES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS OF A
BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.
                                ---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
                                ---------------
               The date of this Prospectus is November 4, 1993.

 
  NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING MADE
HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANOTHER PERSON. THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
 
                             AVAILABLE INFORMATION
 
  The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Information, as of particular dates, concerning
directors and executive officers, their compensation, options granted to them,
the principal holders of securities of the Company and any material interest of
such persons in transactions with the Company is disclosed in proxy statements
distributed to stockholders of the Company and filed with the Commission. Such
reports, proxy statements and other information can be inspected and copied at
the Public Reference Room of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and the Commission's Regional Offices at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade
Center (13th Floor), New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, such
reports, proxy statements and other material concerning the Company can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York; the Chicago Stock Exchange, 440 South LaSalle Street, Chicago,
Illinois; and the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California.
 
  The Company has filed with the Commission a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities being offered by this Prospectus. This Prospectus does not contain
all the information set forth in the Registration Statement, certain portions
of which have been omitted as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the
Securities, reference is made to the Registration Statement, including the
exhibits thereto. The Registration Statement may be inspected by anyone without
charge at the principal office of the Commission in Washington, D.C. and copies
of all or any part of it may be obtained from the Commission upon payment of
the prescribed fees.
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
  The following documents heretofore filed by the Company with the Commission
pursuant to Section 13 of the Exchange Act are incorporated herein by
reference:
 
    (i) The Company's Annual Report on Form 10-K for the year ended December
  31, 1992, as amended by the Company's Form 8 dated March 12, 1993;
 
    (ii) The Company's Quarterly Reports on Form 10-Q for the quarters ended
  March 31, 1993 and June 30, 1993;
 
    (iii) The Company's Current Reports on Form 8-K dated January 14, 1993,
  January 20, 1993, February 26, 1993, March 3, 1993, March 5, 1993, April
  16, 1993, July 14, 1993, July 30, 1993 and October 13, 1993;
 
    (iv) Item 14 on pages 26 and 27 of the Company's Registration Statement
  on Form 10 (File No. 1-6052) describing the Company's Common Stock; and
 
    (v) The Company's Registration Statement on Form 8-A dated November 25,
  1988, describing the Preferred Share Purchase Rights declared by the
  Company on November 18, 1988, as amended by Amendment No. 1 on Form 8 dated
  July 16, 1990.
 
  All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities shall be deemed to be
 
                                       2

 
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
 
  ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN, EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS).
REQUESTS SHOULD BE ADDRESSED TO FIRST CHICAGO CORPORATION, ONE FIRST NATIONAL
PLAZA, CHICAGO, ILLINOIS 60670, ATTENTION: INVESTOR RELATIONS (312) 732-4812.
 
                           FIRST CHICAGO CORPORATION
 
GENERAL
 
  The Company is a multi-bank holding company incorporated in Delaware. At June
30, 1993, the Company had consolidated assets of $49.9 billion and total equity
capital of $3.9 billion. The principal asset of the Company is the capital
stock of The First National Bank of Chicago ("FNBC"), which provides a broad
range of banking, fiduciary, financial and other services domestically and
overseas. At June 30, 1993, FNBC had deposits of $22.8 billion and assets of
approximately $34.1 billion.
 
  The Company also owns all the outstanding capital stock of American National
Corporation ("ANC") and FCC National Bank ("FCCNB"). ANC is the holding company
for American National Bank and Trust Company of Chicago ("ANB"), several
suburban Chicago banks and American National Bank and Trust Company of
Wisconsin. FCCNB is a Delaware-based bank primarily engaged in the issuance of
VISA and MasterCard credit cards. Together with these banking organizations,
the Company, directly or indirectly, owns the stock of various nonbank
companies engaged in businesses related to banking and finance, including
venture capital and leasing subsidiaries.
 
  In addition to its equity investment in subsidiaries, the Company, directly
or indirectly, raises funds principally to finance the operations of its
nonbank subsidiaries. A substantial portion of the Company's annual income
typically has been derived from dividends from its subsidiaries, and from
interest on loans, some of which are subordinated, to its subsidiaries.
 
  Because the Company is a holding company, its rights and the rights of its
creditors, including the holders of the Debt Securities, to participate in the
assets of any subsidiary upon the subsidiary's liquidation or recapitalization
would be subject to the prior claims of such subsidiary's creditors except to
the extent that the Company may itself be a creditor with recognized claims
against the subsidiary.
 
  The Company's executive offices are located at One First National Plaza,
Chicago, Illinois 60670, and the telephone number is (312) 732-4000.
 
SUPERVISION AND REGULATION
 
  The Company is a legal entity separate and distinct from the Company's
banking subsidiaries (the "Banks") and the Company's other affiliates.
Investors should be aware of the various legal limitations on the extent to
which the Banks can finance or otherwise supply funds to the Company or various
of its affiliates. In particular, the Banks are subject to certain restrictions
imposed by the laws of the United States on any extensions of credit to the
Company or, with certain exceptions, other affiliates, on investments in stock
or other securities thereof, on the taking of such securities as collateral for
loans, and on the terms of transactions between the Banks and other
subsidiaries. FNBC, FCCNB, ANB and the other Banks are subject to regulation by
the Office of the Comptroller of the Currency (the "Comptroller"), the Board of
Governors of
 
                                       3

 
the Federal Reserve System (the "Federal Reserve Board") and the Federal
Deposit Insurance Corporation ("FDIC"). These national banks are examined by
the Comptroller, and FNBC's and ANB's operations in other countries are subject
to various restrictions imposed by the laws of such countries.
 
  Federal law prohibits the Company and certain of its affiliates from
borrowing from the Banks without the prior approval of the respective Bank's
Board of Directors and unless such loans are secured by U.S. Treasury or other
specified obligations. Further, such secured loans and investments by any of
the Banks are limited in amount as to the Company or any other such affiliate
to 10% of the respective Bank's capital and surplus and as to the Company and
all such affiliates to an aggregate 20% of the respective Bank's capital and
surplus. Under Federal Reserve Board policy, the Company is expected to act as
a source of financial strength to each Bank and to commit resources to support
such Bank in circumstances where it might not do so absent such policy. In
addition, any capital loans by the Company to any of the Banks would be
subordinate in right of payment to deposits and to certain other indebtedness
of such Bank.
 
  Additionally, there are certain regulatory limitations on the payment of
dividends to the Company by the Banks. Dividend payments by national banks are
limited to the lesser of (i) the level of "undivided profits then on hand" less
the amount of bad debts, as defined, in excess of the allowance for credit
losses and (ii) absent regulatory approval, an amount not in excess of "net
profits" for the current year combined with "retained net profits" for the
preceding two years. As of December 31, 1992, the Banks could have declared
additional dividends of approximately $172 million without approval of the
Comptroller. The payment of dividends by any Bank may also be affected by other
factors, such as the maintenance of adequate capital for such Bank. The
Comptroller also has authority under the Financial Institutions Supervisory Act
to prohibit a national bank from paying dividends if, in the Comptroller's
opinion, the payment of dividends would, in light of the financial condition of
such bank, constitute an unsafe or unsound practice.
 
CAPITAL ADEQUACY
 
  The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies which require bank holding companies to maintain a minimum
ratio of total capital to risk-weighted assets (including certain off-balance-
sheet items, such as standby letters of credit) of 8%. At least half of total
capital has to be composed of common stock, retained earnings, minority
interests in the equity accounts of consolidated subsidiaries, noncumulative
perpetual preferred stock and a limited amount of perpetual preferred stock,
less goodwill ("Tier I capital"). The remainder ("Tier II capital") may consist
of subordinated debt, other preferred stock, certain other instruments and a
limited amount of loan loss reserves. At June 30, 1993, the Company's
consolidated Tier I capital and total capital ratios were 8.0% and 13.0%,
respectively.
 
  In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier I capital to total assets, less goodwill (the "leverage ratio")
of 3% for bank holding companies that meet certain specified criteria,
including those having the highest regulatory rating. All other bank holding
companies generally are required to maintain a leverage ratio of at least 3%
plus an additional cushion of 100 to 200 basis points. The Company's leverage
ratio at June 30, 1993 was 7.4%. The guidelines also provide that the bank
holding companies experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets.
Furthermore, the Federal Reserve Board has indicated that it will consider a
"tangible Tier I capital leverage ratio" (deducting all intangibles) and other
indicia of capital strength in evaluating proposals for expansion or new
activities.
 
  Each of the Banks is subject to similar risk-based and leverage capital
requirements adopted by the Federal Reserve Board, the FDIC or the Comptroller,
as the case may be. Each of the Company's Banks was in compliance with the
applicable minimum capital requirements as of June 30, 1993. Neither the
Company nor any of the Banks has been advised by any federal banking agency of
any specific minimum leverage ratio requirement applicable to it.
 
                                       4

 
  Failure to meet capital requirements could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business, which are described below
under "Recent Legislation".
 
  Bank regulators continue to indicate their desire to raise capital
requirements applicable to banking organizations beyond their current levels.
However, the management of the Company is unable to predict whether higher
capital requirements would be imposed and, if so, at what levels and on what
schedule.
 
RECENT LEGISLATION
 
  The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"),
enacted in December 1991, significantly expanded the regulatory and enforcement
powers of federal banking regulators, in particular the FDIC. While the full
impact of FDICIA cannot yet be determined, it has important consequences for
the Company, the Banks and other depository institutions located in the United
States.
 
  FDICIA establishes five tiers of capital measurement for regulatory purposes
ranging from "well capitalized" to "critically undercapitalized." Under
regulations adopted by the federal banking agencies, a depository institution
is well capitalized if it significantly exceeds the minimum level required by
regulation for each relevant capital measure, adequately capitalized if it
meets such measure, undercapitalized if it fails to meet any such measure,
significantly undercapitalized if it is significantly below such measure and
critically undercapitalized if its tangible equity is not greater than 2% of
total tangible assets. A depository institution may be deemed to be in a
capitalization category that is lower than is indicated by its actual capital
position if it receives an unsatisfactory examination rating. FDICIA directs
banking regulators to take increasingly strong corrective steps, based on the
capital tier of any subject bank, to cause such bank to achieve and maintain
capital adequacy. Even if a bank is adequately capitalized, however, the
banking regulators are authorized to apply corrective measures if the bank is
determined to be in an unsafe or unsound condition or engaging in an unsafe or
unsound activity.
 
  "Undercapitalized" banks are subject to growth limitations and are required
to submit a capital restoration plan. Such banks will be subject to
restrictions on borrowings from the Federal Reserve System, effective December
19, 1993. If an "undercapitalized" bank fails to submit an acceptable plan, it
is treated as if it is significantly undercapitalized. "Significantly
undercapitalized" banks may be subject to a number of requirements and
restrictions, including orders to sell sufficient voting stock to become
adequately capitalized, requirements to reduce total assets, and orders to
cease receiving deposits from correspondent banks. "Critically
undercapitalized" institutions are subject to appointment of a receiver or
conservator.
 
  In addition to the foregoing, depending on the level of capital of an insured
depository institution, the banking regulatory agencies' corrective powers can
include: requiring a capital restoration plan; placing limits on asset growth
and restrictions on activities; requiring the institution to issue additional
stock (including voting stock) or to be acquired; placing restrictions on
transactions with affiliates; restricting the interest rate the institution may
pay on deposits; ordering a new election for the institution's board of
directors; requiring that certain senior executive officers or directors be
dismissed; prohibiting the institution from accepting deposits from
correspondent banks; requiring the institution to divest certain subsidiaries;
prohibiting the payment of principal or interest on subordinated debt;
prohibiting the institution's parent bank holding company from making capital
distributions without prior regulatory approval; and, ultimately, appointing a
receiver for the institution.
 
  If the insured depository institution is undercapitalized, the parent bank
holding company is required to guarantee that the institution will comply with
any capital restoration plan submitted to, and approved by, the appropriate
federal banking agency in an amount equal to the lesser of (i) 5% of the
institution's total assets at the time the institution became undercapitalized
or (ii) the amount which is necessary (or would have been necessary) to bring
the institution into compliance with all applicable capital standards as of the
time the institution fails to comply with the capital restoration plan. If such
parent bank holding company guarantee is not obtained, the capital restoration
plan may not be accepted by the banking regulators. As a
 
                                       5

 
result, such institution would be subject to the more severe restrictions
imposed on significantly undercapitalized institutions. Further, the failure
of such a depository institution to submit an acceptable capital plan is
grounds for the appointment of a conservator or receiver.
 
  FDICIA also contains a number of other provisions affecting depository
institutions, including the creation of additional reporting and independent
auditing requirements, the changing of FDIC insurance premiums from flat
amounts to a new system of risk-based assessments as described below under
"FDIC Insurance," a review of accounting standards, and supplemental
disclosures and limits on the ability of all but well capitalized depository
institutions to acquire brokered deposits.
 
  It is anticipated that FDICIA will result in increased costs for the banking
industry due to higher FDIC assessments and more limitations on the activities
of all but the most well-capitalized banks.
 
  In addition to FDICIA, there have been proposed a number of legislative and
regulatory proposals designed to strengthen the federal deposit insurance
system and to improve the overall financial stability of the U.S. banking
system. These include proposals to increase capital requirements above
presently published guidelines, to place special assessments on banks to
increase funds available to the FDIC, and to allow national banks to branch on
an interstate basis. It is impossible to predict whether or in what form these
proposals may be adopted in the future and, if adopted, what their effect
would be on the Banks and the Company.
 
  The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), among other things, provides generally that, upon the default of
any bank of a multi-unit holding company, the FDIC may assess an affiliated
insured depository institution for the estimated losses incurred by the FDIC.
Specifically, FIRREA provides that a depository institution insured by the
FDIC can be held liable for any loss incurred by, or reasonably expected to be
incurred ~by, the FDIC, in connection with (i) the default of a commonly
controlled FDIC-insured depository institution or (ii) any assistance provided
by the FDIC to a commonly controlled FDIC-insured depository institution in
danger of a default. "Default" is defined generally as the appointment of a~
conservator or receiver. "In danger of a default" is defined generally as the
existence of certain conditions indicating that a default is likely to occur
in the absence of regulatory assistance. All of the Banks are FDIC-insured
depository institutions.
 
FDIC INSURANCE
 
  The Banks are subject to FDIC deposit insurance assessments. Under FDICIA,
authority has been granted to the FDIC to impose special assessments on
insured depository institutions to repay FDIC borrowings from the United
States Treasury or other sources and to establish semiannual assessment rates
for the Bank Insurance Fund (the "BIF"). FDICIA provides that FDIC deposit
insurance assessments are to move from flat rate premiums to a new system of
risk-based premium assessments. On October 1, 1992, the FDIC amended its
regulations to adopt a transitional risk-based assessment system, under which
the assessment rate for an insured depository institution varies according to
the level of risk incurred in its activities. Such system has been adopted in
connection with the FDIC's establishment of a schedule to recapitalize the BIF
within 15 years.
 
  Under the FDIC's transitional risk-based assessment system, the prior flat
assessment rate of 0.23% per annum was changed, effective January 1, 1993, to
a rate based upon classification of a depository institution in one of nine
assessment risk categories. Such classification is based upon whether the
institution is well capitalized, adequately capitalized or undercapitalized,
and upon certain supervisory evaluations of the institution as "healthy",
causing "supervisory concern" or causing "substantial supervisory concern"
(designated as supervisory subgroups "A", "B" and "C", respectively, for
reference purposes). For purposes of this regulation, a depository institution
is defined to be well capitalized if it maintains a risk-based total capital
ratio of at least 10%, a risk-based Tier I capital ratio of at least 6.0% and
a Tier I leverage ratio of at least 5.0%, adequately capitalized if the
foregoing ratios are maintained at 8.0%, 4.0% and 4.0%, respectively, and
undercapitalized if it is neither well capitalized nor adequately capitalized.
With respect to
 
                                       6

 
the supervisory evaluations, healthy institutions are financially sound
institutions with few minor weaknesses; supervisory concern refers to
institutions that demonstrate weaknesses which, if not corrected, could result
in significant deterioration, and substantial supervisory concern refers to
institutions for which there is a substantial probability that the FDIC will
suffer a loss in connection with the institution unless effective action is
taken to correct the areas of weakness.
 
  The transitional assessment rate schedule adopted creates a 0.08% spread in
assessment rates between banks classified as strongest and weakest by the FDIC.
Under the transitional assessment rate schedule, a well capitalized bank in
subgroup A will continue to be assessed at the current rate of 0.23% per annum,
in subgroup B at 0.26% per annum and in subgroup C at 0.29% per annum. An
adequately capitalized bank in subgroup A will be assessed at 0.26% per annum,
in subgroup B at 0.29% per annum and in subgroup C at 0.30% per annum. An
undercapitalized bank in subgroup A will be assessed at 0.29% per annum, in
subgroup B at 0.30% per annum and in subgroup C at 0.31% per annum.
 
  In June 1993, the FDIC adopted final rules for the risk-based assessment
system to be implemented as of January 1, 1994. The permanent risk-based
assessment system retains unchanged the transitional assessment rate schedule
and risk classification categories. The FDIC has indicated, however, the
possibility that it may revisit both issues at a later date if future
conditions so warrant.
 
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
 
  The ratios of earnings to fixed charges for the Company, which are computed
on the basis of the total enterprise (as defined by the Commission) by dividing
earnings before fixed charges and income taxes by fixed charges, are set forth
below for the periods indicated. Also set forth below are the ratios of
earnings to combined fixed charges and preferred stock dividends, which are
computed on the basis of the total enterprise by dividing earnings before fixed
charges and income taxes by fixed charges and preferred stock dividend
requirements for the periods indicated. Fixed charges consist principally of
interest expense on all long- and short-term borrowings, excluding or including
interest on deposits as indicated.
 


                                                                    SIX MONTHS
                                                                      ENDED
                                        YEAR ENDED DECEMBER 31,      JUNE 30,
                                        --------------------------- ----------
                                        1992    1991 1990 1989 1988    1993
                                        ----    ---- ---- ---- ---- ----------
                                                  
Earnings to Fixed Charges:
  Excluding interest expense on depos-
   its................................. 0.7x(1) 1.2x 1.3x 1.5x 2.0x    2.5x
  Including interest expense on depos-
   its................................. 0.9x(1) 1.1x 1.1x 1.1x 1.2x    1.8x
Earnings to Combined Fixed Charges and
 Preferred Dividends:
  Excluding interest expense on depos-
   its................................. 0.8x(2) 1.1x 1.3x 1.5x 1.9x    2.2x
  Including interest expense on depos-
   its................................. 0.7x(2) 1.0x 1.1x 1.1x 1.2x    1.7x

- --------
(1) For 1992, earnings (as defined) were insufficient to cover fixed charges.
    The coverage deficiency was approximately $201 million.
(2) For 1992, earnings (as defined) were insufficient to cover combined fixed
    charges and preferred stock dividends. The coverage deficiency was
    approximately $279 million.
 
                                USE OF PROCEEDS
 
  Unless otherwise provided in the Prospectus Supplement, the Company will use
the net proceeds from the sale of the Securities for general corporate
purposes, including the funding of investments in, or extensions of credit to,
the Company's subsidiaries. Pending the uses described above, the Company may
temporarily invest the net proceeds from the sale of the Securities in various
short-term securities or apply the net proceeds to reduce short-term
indebtedness. Based upon the historic and anticipated future growth of the
Company and the financial needs of its subsidiaries, the Company anticipates
that it will, on a recurrent basis, engage in additional financings in
character and amount to be determined.
 
                                       7

 
                         DESCRIPTION OF DEBT SECURITIES
 
                                    GENERAL
 
  The Debt Securities will constitute either Senior Securities or Subordinated
Securities. The Senior Securities will be issued under either an Indenture
dated as of August 1, 1987, as amended by the First Supplemental Indenture,
dated as of March 1, 1989, between the Company and Citibank, N.A., as Trustee
("Citibank"), or an Indenture dated as of May 1, 1990 between the Company and
Norwest Bank Minnesota, National Association, as Trustee ("Norwest"). The
Indenture under which particular Senior Securities are issued and the Trustee
thereunder will be identified in the Prospectus Supplement. Collectively, the
two senior Indentures described above are referred to herein as the "Senior
Indenture". The Subordinated Securities will be issued under an Indenture dated
as of August 1, 1987, as amended by the First Supplemental Indenture, dated as
of March 1, 1989 and the Second Supplemental Indenture, dated as of January 1,
1993 (the "Second Supplemental Indenture") (as so supplemented, the
"Subordinated Indenture"), between the Company and Bank of America National
Trust and Savings Association ("Bank of America"), as successor Trustee to
Security Pacific National Bank. The Senior Indenture and the Subordinated
Indenture are collectively referred to herein as the "Indentures". References
to the "Trustee" shall mean Citibank, Norwest or Bank of America, as
applicable. The statements under this caption are brief summaries of certain
provisions contained in the Indentures, do not purport to be complete and are
qualified in their entirety by reference to the applicable Indenture, copies of
which are exhibits to the Registration Statement. Whenever defined terms are
used but not defined herein, such terms shall have the meanings ascribed to
them in the applicable Indenture, it being intended that such defined terms
shall be incorporated herein by reference.
 
  The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of any Debt Securities
and the extent, if any, to which such general provisions may apply to such Debt
Securities will be described in the Prospectus Supplement relating to such Debt
Securities.
 
  None of the Indentures limits the amount of Debt Securities which may be
issued thereunder, and each Indenture provides 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 and may be denominated in any
currency or currency unit designated by the Company. Neither the Indentures nor
the Debt Securities will limit or otherwise restrict the amount of other
indebtedness which may be incurred or the other securities which may be issued
by the Company or any of its subsidiaries.
 
  Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form of one or more global securities
in registered or bearer form (each a "Global Security"). Bearer Securities, if
any, will be offered only to non-United States persons and to offices located
outside the United States of certain United States financial institutions.
 
  Reference is made to the Prospectus Supplement for a description of the
following terms, where applicable, of each series of Debt Securities in respect
of which this Prospectus is being delivered: (1) the title of such Debt
Securities; (2) the limit, if any, on the aggregate principal amount or
aggregate initial public offering price of such Debt Securities; (3) the
priority of payment of such Debt Securities; (4) the price or prices (which may
be expressed as a percentage of the aggregate principal amount thereof) at
which the Debt Securities will be issued; (5) the date or dates on which the
principal of the Debt Securities will be payable; (6) the rate or rates (which
may be fixed or variable) per annum at which such Debt Securities will bear
interest, if any, or the method of determining the same; (7) the date or dates
from which such interest, if any, on the Debt Securities will accrue, the date
or dates on which such interest, if any, will be payable, the date or dates on
which payment of such interest, if any, will commence and the Regular Record
Dates for such Interest Payment Dates; (8) the extent to which any of the Debt
Securities will be issuable in temporary or permanent global form, or the
manner in which any interest payable on a temporary or permanent global Debt
Security will be paid; (9) each office or agency where, subject to the terms of
the applicable Indenture, the Debt Securities may be presented for registration
of transfer or exchange; (10) the place or places where
 
                                       8

 
the principal of (and premium, if any) and interest, if any, on the Debt
Securities will be payable; (11) the date or dates, if any, after which such
Debt Securities may be redeemed or purchased in whole or in part, at the option
of the Company or mandatorily pursuant to any sinking, purchase or analogous
fund or may be required to be purchased or redeemed at the option of the
holder, and the redemption or repayment price or prices thereof; (12) the
denomination or denominations in which such Debt Securities are authorized to
be issued; (13) the currency, currencies or units (including ECU) based on or
related to currencies for which the Debt Securities may be purchased and the
currency, currencies or currency units (including ECU) in which the principal
of, premium, if any, and any interest on such Debt Securities may be payable;
(14) any index used to determine the amount of payments of principal of,
premium, if any, and interest on the Debt Securities; (15) whether any of the
Debt Securities are to be issuable as Bearer Securities and/or Registered
Securities, and if issuable as Bearer Securities, any limitations on issuance
of such Bearer Securities and any provisions regarding the transfer or exchange
of such Bearer Securities (including exchange for registered Debt Securities of
the same series); (16) the payment of any additional amounts with respect to
the Debt Securities; (17) whether any of the Debt Securities will be issued as
Original Issue Discount Securities (as defined below); (18) information with
respect to book-entry procedures, if any; (19) the terms, if any, upon which
the Debt Securities may be convertible into or exchanged for Common Stock,
Preferred Stock (which may be represented by Depositary Shares), other Debt
Securities, Debt Warrants, Common Stock Warrants or Preferred Stock Warrants of
the Company and the terms and conditions upon which such conversion or exchange
will be effected, including the initial conversion or exchange price or rate,
the conversion or exchange period and any other provision in addition to or in
lieu of those described herein; (20) any additional covenants or Events of
Default not currently set forth in the applicable Indenture; and (21) any other
terms of such Debt Securities not inconsistent with the provisions of the
applicable Indenture.
 
  If any of the Debt Securities are sold for one or more foreign currencies or
foreign currency units or if the principal of, premium, if any, or interest on
any series of Debt Securities is payable in one or more foreign currencies or
foreign currency units, the restrictions, elections, tax consequences, specific
terms and other information with respect to such issue of Debt Securities and
such currencies or currency units will be set forth in the Prospectus
Supplement relating thereto.
 
  Debt Securities may be issued as original issue discount Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) ("Original Issue Discount Securities"), to be sold at a
substantial discount below the stated principal amount thereof due at the
stated maturity of such Debt Securities. There may not be any periodic payments
of interest on Original Issue Discount Securities as defined herein. In the
event of an acceleration of the maturity of any Original Issue Discount
Security, the amount payable to the holder of such Original Issue Discount
Security upon such acceleration will be determined in accordance with the
Prospectus Supplement, the terms of such security and the Indenture, but will
be an amount less than the amount payable at the maturity of the principal of
such Original Issue Discount Security. Federal income tax considerations with
respect to Original Issue Discount Securities will be set forth in the
Prospectus Supplement relating thereto.
 
REGISTRATION AND TRANSFER
 
  Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities will be issued only as Registered Securities. If Bearer Securities
are issued, the United States Federal income tax consequences and other special
considerations, procedures and limitations applicable to such Bearer Securities
will be described in the Prospectus Supplement relating thereto.
 
  Debt Securities issued as Registered Securities will be without coupons. Debt
Securities issued as Bearer Securities shall have interest coupons attached,
unless issued as zero coupon securities.
 
  Registered Securities (other than a Global Security) may be presented for
transfer (with the form of transfer endorsed thereon duly executed) or
exchanged for other Debt Securities of the same series at the office of the
Note Registrar specified according to the terms of the applicable Indenture.
The Company has agreed in each of the Indentures that, with respect to
Registered Securities having The City of New York as a place of payment, the
Company will appoint a Note Registrar or Co-Note Registrar located in The City
of
 
                                       9

 
New York for such transfer or exchange. Such transfer or exchange shall be made
without service charge, but the Company may require payment of any taxes or
other governmental charges as described in the applicable Indenture. Provisions
relating to the exchange of Bearer Securities for other Debt Securities of the
same series (including, if applicable, Registered Securities) will be described
in the applicable Prospectus Supplement. In no event, however, will Registered
Securities be exchangeable for Bearer Securities.
 
GLOBAL SECURITIES
 
  The Debt Securities of a series may be issued in whole or in part in the form
of one or more Global Securities that will be deposited with, or on behalf of,
a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued in either registered
or bearer form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee to a successor Depositary or any
nominee of such successor.
 
  The specific terms of the depositary arrangement with respect to a series of
Debt Securities and certain limitations and restrictions relating to a series
of Bearer Securities in the form of one or more Global Securities, will be
described in the Prospectus Supplement relating to such series. The Company
anticipates that the following provisions will generally apply to depositary
arrangements.
 
  Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depositary. Such accounts shall be designated by the
underwriters or agents with respect to such Debt Securities. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants).
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global
Security.
 
  So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of any such Debt Securities of such series in definitive form
and will not be considered the owners or holders thereof under the Indenture
governing such Debt Securities.
 
  Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. Neither the Company, the Trustee for such
Debt Securities, any Paying Agent, nor the Note Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
 
  Subject to certain restrictions relating to Bearer Securities, the Company
expects that the Depositary for a series of Debt Securities or its nominee,
upon receipt of any payment of principal, premium or interest in
 
                                       10

 
respect of a permanent Global Security representing any of such Debt Securities
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of
such Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name". Such payments will
be the responsibility of such participants. With respect to owners of
beneficial interests in a temporary Global Security representing Bearer
Securities, receipt by such beneficial owners of payments of principal, premium
or interest in respect thereof will be subject to additional restrictions.
 
  If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, the Company will issue individual
Debt Securities of such series in definitive form in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities,
determine not to have any Debt Securities of a series represented by one or
more Global Securities and, in such event, will issue individual Debt
Securities of such series in definitive form in exchange for the Global
Security or Securities representing such series of Debt Securities. Further, if
the Company so specifies with respect to the Debt Securities of a series, an
owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company, Trustee and
the Depositary for such Global Security, receive Debt Securities of such series
in definitive form in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery in definitive form of Debt
Securities of the series represented by such Global Security equal in principal
amount to such beneficial interest and to have such Debt Securities registered
in its name (if the Debt Securities of such series are issuable as Registered
Securities). Debt Securities of such series so issued in definitive form will
be issued (a) as Registered Securities in denominations, unless otherwise
specified by the Company, of $1,000 and integral multiples thereof if the Debt
Securities of such series are issuable as Registered Securities, (b) as Bearer
Securities in the denomination, unless otherwise specified by the Company, of
$5,000 if the Debt Securities of such series are issuable as Bearer Securities
or (c) as either Registered or Bearer Securities, if the Debt Securities of
such series are issuable in either form. Certain restrictions may apply,
however, on the issuance of a Bearer Security in definitive form in exchange
for an interest in a Global Security.
 
PAYMENT AND PAYING AGENTS
 
  Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of, premium, if any, and any interest on Registered Securities will
be made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that, at the option of the Company, payment
of any interest may be made (i) by check mailed to the address of the person
entitled thereto as such address shall appear in the applicable Note Register
or (ii) by wire transfer to an account maintained by the person entitled
thereto as specified in the applicable Note Register. Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any installment of
interest on Registered Securities will be made to the person in whose name such
Debt Security is registered at the close of business on the Regular Record Date
for such payment.
 
  Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of, premium, if any, and any interest on Bearer Securities will be
payable, subject to any applicable laws and regulations, at the offices of such
Paying Agents outside the United States as the Company may designate from time
to time, at the option of the Holder, by check or by transfer to an account
maintained by the payee with a bank located outside the United States. Unless
otherwise indicated in an applicable Prospectus Supplement,
 
                                       11

 
payment of interest on Bearer Securities will be made only against surrender of
the coupon relating to such Interest Payment Date. No payment with respect to
any Bearer Security will be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.
 
CONSOLIDATION, MERGER OR SALE OF ASSETS
 
  Each Indenture provides that the Company may, without the consent of the
holders of any of the Debt Securities outstanding under the applicable
Indenture, consolidate with, merge into or transfer its assets substantially as
an entirety to any person, provided that (i) any such successor assumes the
Company's obligations on the applicable Debt Securities and under the
applicable Indenture, (ii) after giving effect thereto, no Event of Default (as
defined in the Senior Indenture) in the case of the Senior Securities, or
Default (as defined in the Subordinated Indenture) in the case of the
Subordinated Securities, shall have happened and be continuing and (iii)
certain other conditions under the applicable Indenture are met. Accordingly,
any such consolidation, merger or transfer of assets substantially as an
entirety, which meets the conditions described above, would not create any
Event of Default or Default which would entitle holders of the Debt Securities,
or the Trustee on their behalf, to take any of the actions described below
under "Senior Securities--Events of Default, Waivers, etc." or "Subordinated
Securities--Events of Default, Waivers, etc."
 
LEVERAGED AND OTHER TRANSACTIONS
 
  Each Indenture and the Debt Securities do not contain, among other things,
provisions which would afford holders of the Debt Securities protection in the
event of a highly leveraged or other transaction involving the Company which
could adversely affect the holders of Debt Securities.
 
MODIFICATION OF THE INDENTURE; WAIVER OF COVENANTS
 
  Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt
Securities of each affected series, modifications and alterations of such
Indenture may be made which affect the rights of the holders of such Debt
Securities; provided, however, that no such modification or alteration may be
made without the consent of the holder of each Debt Security so affected which
would, among other things, (i) change the maturity of the principal of, or of
any installment of interest (or premium, if any) on, any Debt Security issued
pursuant to such Indenture, or reduce the principal amount thereof or any
premium thereon, or change the method of calculation of interest or the
currency of payment of principal or interest (or premium, if any) on, or reduce
the minimum rate of interest thereon, or impair the right to institute suit for
the enforcement of any such payment on or with respect to any such Debt
Security, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof; or (ii) reduce the above-stated percentage in principal amount of
outstanding Debt Securities required to modify or alter such Indenture.
 
CONVERTIBLE DEBT SECURITIES
 
  Certain Debt Securities (the "Convertible Debt Securities") may be
convertible into other Securities of the Company. The holders of such
Convertible Debt Securities of a specified series may be entitled or, if so
provided in the applicable Prospectus Supplement, may be required at such time
or times specified in the applicable Prospectus Supplement, subject to prior
redemption, repayment or repurchase, to convert any Convertible Debt Securities
of such series (in denominations set forth in the applicable Prospectus
Supplement) into Common Stock, Preferred Stock, Common Stock Warrants,
Preferred Stock Warrants, another series of Debt Securities, Debt Warrants or
Depositary Shares, as the case may be, (collectively, the foregoing securities
into which the Convertible Debt Securities may convert are referred to herein
as "Conversion Securities") at the conversion price set forth in the applicable
Prospectus Supplement, subject to adjustment as described below, and in the
applicable Prospectus Supplement. The relevant provisions for each series of
Convertible Debt Securities will be set forth in the applicable Prospectus
Supplement. Except
 
                                       12

 
as described below or in the applicable Prospectus Supplement, no adjustment
will be made upon conversion of any Convertible Debt Securities for interest
accrued thereon or for dividends on any Conversion Securities issued. If any
Convertible Debt Securities not called for redemption are converted between a
Regular Record Date for the payment of interest and the next succeeding
Interest Payment Date, such Convertible Debt Securities must be accompanied by
funds equal to the interest payable on such succeeding Interest Payment Date on
the principal amount so converted. The Company is not required to issue
fractional shares of Common Stock or Preferred Stock upon conversion of
Convertible Debt Securities that are convertible into Common Stock or Preferred
Stock, respectively, and, in lieu thereof, will pay a cash adjustment, in the
case of Convertible Debt Securities convertible into Common Stock, based upon
the market value of the Common Stock, and in the case of Convertible Debt
Securities convertible into Preferred Stock, based upon the liquidation
preference of such series of Preferred Stock, unless otherwise specified in the
Prospectus Supplement. In the case of Convertible Debt Securities convertible
into securities other than Common Stock or Preferred Stock, such adjustment
will be based on such method as is set forth in the Prospectus Supplement.
 
  The conversion price for a series of Convertible Debt Securities that are
convertible into Common Stock is subject to adjustment upon the occurrence of
certain events under formulas that will be set forth in the applicable
Prospectus Supplement.
 
  In the event of a taxable distribution to holders of Common Stock or
Preferred Stock (or other transaction) which results in any adjustment of the
conversion price of Convertible Debt Securities that are convertible into
Common Stock or Preferred Stock, the holders of such Convertible Debt
Securities may, in certain circumstances, be deemed to have received a
distribution subject to United States Federal income tax as a dividend; in
certain other circumstances, the absence of such an adjustment may result in a
taxable dividend to the holders of Common Stock or Preferred Stock acquired
upon conversion of such Convertible Debt Securities.
 
                               SENIOR SECURITIES
 
  The Senior Securities will be direct, unsecured obligations of the Company
and will rank pari passu with all outstanding unsecured senior indebtedness of
the Company.
 
EVENTS OF DEFAULT, WAIVERS, ETC.
 
  An Event of Default with respect to Senior Securities of any series is
defined in the Senior Indenture as (i) default in the payment of principal of
or premium, if any, on any of the Senior Securities of that series outstanding
under the Senior Indenture when due; (ii) default in the payment of interest on
any of the Senior Securities of that series outstanding under the Senior
Indenture when due and continuance of such default for 30 days; (iii) default
in the performance of any other covenant of the Company in the Senior Indenture
with respect to Senior Securities of such series and continuance of such
default for 60 days after written notice; (iv) due acceleration of any
indebtedness for borrowed money in principal amount in excess of $1,000,000 of
the Company under the terms of the instrument under which such indebtedness is
issued or secured, if such acceleration is not rescinded or annulled or such
indebtedness is not discharged within 30 days after written notice; (v) certain
events of bankruptcy, insolvency or reorganization of the Company or FNBC; and
(vi) any other event that may be specified in a Prospectus Supplement with
respect to any series of Senior Securities. If an Event of Default with respect
to any series of Senior Securities for which there are Senior Securities
outstanding under the Senior Indenture occurs and is continuing, either the
applicable Trustee or the holders of not less than 25% in aggregate principal
amount of the Senior Securities of such series outstanding may declare the
principal amount (or if such Senior Securities are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all Senior Securities of that series to be immediately
due and payable. The holders of a majority in aggregate principal amount of the
Senior Securities of any series outstanding under the Senior Indenture may
waive an Event of Default resulting in acceleration of such Senior Securities,
but only if all Events of Default with respect to Senior Securities of
 
                                       13

 
such series have been remedied and all payments due (other than those due as a
result of acceleration) have been made. If an Event of Default occurs and is
continuing, the applicable Trustee may, in its discretion, and at the written
request of holders of not less than a majority in aggregate principal amount
of the Senior Securities of any series outstanding under the Senior Indenture
and upon reasonable indemnity against the costs, expenses and liabilities to
be incurred in compliance with such request and subject to certain other
conditions set forth in the Senior Indenture shall, proceed to protect the
rights of the holders of all the Senior Securities of such series. Prior to
acceleration of maturity of the Senior Securities of any series outstanding
under the Senior Indenture, the holders of a majority in aggregate principal
amount of such Senior Securities may waive any past default under the Senior
Indenture except a default in the payment of principal of, premium, if any, or
interest on the Senior Securities of such series.
 
  The Senior Indenture provides that upon the occurrence of an Event of
Default specified in clauses (i) or (ii) of the immediately preceding
paragraph, the Company will, upon demand of the applicable Trustee, pay to it,
for the benefit of the holder of any such Senior Security, the whole amount
then due and payable on such Senior Securities for principal, premium, if any,
and interest. The Senior Indenture further provides that if the Company fails
to pay such amount forthwith upon such demand, such Trustee may, among other
things, institute a judicial proceeding for the collection thereof.
 
  A judgment for money damages by courts in the United States, including a
money judgment based on an obligation expressed in a foreign currency, will
ordinarily be rendered only in U.S. dollars. New York statutory law provides
that a court shall render a judgment or decree in the foreign currency of the
underlying obligation and that the judgment or decree shall be converted into
U.S. dollars at the exchange rate prevailing on the date of entry of the
judgment or decree.
 
  The Senior Indenture also provides that notwithstanding any other provision
of the Senior Indenture, the holder of any Senior Security of any series shall
have the right to institute suit for the enforcement of any payment of
principal of, premium, if any, and interest on such Senior Securities when due
and that such right shall not be impaired without the consent of such holder.
 
  The Company is required to file annually with the Trustees a written
statement of officers as to the existence or non-existence of defaults under
the Senior Indenture or the Senior Securities.
 
REGARDING CITIBANK
 
  Citibank, a Trustee under one of the Senior Indentures, has its principal
corporate trust office at 120 Wall Street, New York, New York 10043. With
respect to payment or registration of transfer or exchange by Citibank under
the Senior Indenture, Citibank's offices for such functions are located at 111
Wall Street, New York, New York 10043. The Company has normal banking
relationships with Citibank.
 
REGARDING NORWEST
 
  Norwest, a Trustee under one of the Senior Indentures, has its principal
corporate trust office at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479. The Company has normal banking relationships with Norwest.
 
                            SUBORDINATED SECURITIES
 
  The Subordinated Securities will be direct, unsecured obligations of the
Company and will be subject to the subordination provisions described below.
 
SECOND SUPPLEMENTAL INDENTURE
 
  The Second Supplemental Indenture has been entered into to allow
Subordinated Securities issued by the Company to be treated as capital for
calculation of regulatory capital ratios. The Federal Reserve Board ~ has
issued interpretations of its capital regulations indicating, among other
things, that subordinated debt of
 
                                      14

 
bank holding companies issued on or after September 4, 1992 is includable in
capital for calculation of regulatory capital ratios only if the subordination
of the debt meets certain criteria and if the debt may be accelerated only for
bankruptcy, insolvency and similar matters. Accordingly, the Second
Supplemental Indenture contains subordination and acceleration provisions for
the Subordinated Securities issued on and after January 1, 1993 (the "New
Subordinated Securities") which are intended to be consistent with the
interpretations of the Federal Reserve Board. Unless otherwise specified in the
Prospectus Supplement relating to a particular series of Subordinated
Securities offered thereby, Subordinated Securities offered pursuant to this
Prospectus will constitute New Subordinated Securities for purposes of the
Subordinated Indenture. See "Subordination" and "Events of Default, Defaults,
Waivers, etc." below.
 
  The Second Supplemental Indenture has been filed with the Commission and is
available for inspection at the corporate trust office of Bank of America at
333 South Beaudry Avenue, 25th Floor, Los Angeles, California 90017.
 
SUBORDINATION
 
  Upon any distribution of assets of the Company upon any dissolution, winding
up, liquidation or reorganization, the payment of the principal of, premium, if
any, and interest on the Subordinated Securities is to be subordinated in right
of payment, to the extent provided in the Subordinated Indenture, to the prior
payment in full of all Senior Indebtedness. In certain events of bankruptcy or
insolvency, the payment of the principal of and interest on the New
Subordinated Securities will, to the extent provided in the Subordinated
Indenture, also be effectively subordinated in right of payment to the prior
payment in full of all General Obligations.
 
  Upon any distribution of assets of the Company upon any dissolution, winding
up, liquidation or reorganization, the holders of Senior Indebtedness will
first be entitled to receive payment in full of all amounts due or to become
due before the holders of the Subordinated Securities will be entitled to
receive any payment in respect of the principal of, premium, if any, or
interest on the Subordinated Securities. If upon any such payment or
distribution of assets there remain, after giving effect to such subordination
provisions in favor of the holders of Senior Indebtedness, any amounts of cash,
property or securities available for payment or distribution in respect of the
New Subordinated Securities ("Excess Proceeds") and if, at such time, any
creditors in respect of General Obligations have not received payment in full
of all amounts due or to become due on or in respect of such General
Obligations, then such Excess Proceeds shall first be applied to pay or provide
for the payment in full of such General Obligations before any payment or
distribution may be made in respect of the New Subordinated Securities.
 
  In addition, no payment may be made of the principal of, premium, if any, or
interest on the Subordinated Securities, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Subordinated
Securities, at any time when (i) there is a default in the payment of the
principal of, premium, if any, interest on or otherwise in respect of any
Senior Indebtedness or (ii) any event of default with respect to any Senior
Indebtedness has occurred and is continuing, or would occur as a result of such
payment on the Subordinated Securities or any redemption, retirement, purchase
or other acquisition of any of the Subordinated Securities, permitting the
holders of such Senior Indebtedness to accelerate the maturity thereof. Except
as described above, the obligation of the Company to make payment of the
principal of, premium, if any, or interest on the Subordinated Securities will
not be affected.
 
  By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of a distribution of assets upon any dissolution,
winding up, liquidation or reorganization, certain creditors of the Company who
are not holders of Senior Indebtedness or of the Subordinated Securities may
recover less, ratably, than holders of Senior Indebtedness and may recover
more, ratably, than holders of the Subordinated Securities. By reason of the
obligation of the holders of New Subordinated Securities to pay over any Excess
Proceeds to creditors in respect of General Obligations, in the event of a
distribution of assets upon any dissolution, winding up, liquidation or
reorganization, holders of Existing Subordinated Indebtedness may recover less,
ratably, than creditors in respect of General Obligations and may recover more,
ratably, than the holders of New Subordinated Securities.
 
                                       15

 
  Subject to payment in full of all Senior Indebtedness, the rights of the
holders of Subordinated Securities will be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to Senior Indebtedness.
Subject to payment in full of all General Obligations, the rights of the
holders of the New Subordinated Securities will be subrogated to the rights of
the creditors in respect of General Obligations to receive payments or
distributions of cash, property or securities of the Company applicable to such
creditors in respect of General Obligations.
 
  Senior Indebtedness is defined in the Subordinated Indenture as the principal
of, premium, if any, and interest on (i) all of the Company's indebtedness for
money borrowed, other than the subordinated securities issued under the
Subordinated Indenture, the Company's Floating Rate Subordinated Capital Notes
Due December 1996 (the "1996 Subordinated Capital Notes"), and the Company's 9
7/8% Subordinated Notes Due July 1999 (the "1999 Subordinated Notes"), whether
outstanding on the date of execution of the Subordinated Indenture or
thereafter created, assumed or incurred, except such indebtedness as is by its
terms expressly stated to be not superior in right of payment to the
subordinated securities issued under the Subordinated Indenture, the 1996
Subordinated Capital Notes or the 1999 Subordinated Notes or to rank pari passu
with the subordinated securities issued under the Subordinated Indenture, the
1996 Subordinated Capital Notes or the 1999 Subordinated Notes and; (ii) any
deferrals, renewals or extensions of any such Senior Indebtedness. The term
"indebtedness for money borrowed" as used in the prior sentence includes,
without limitation, any obligation of, or any obligation guaranteed by, the
Company for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation for
the payment of the purchase price of property or assets. There is no limitation
on the issuance of additional Senior Indebtedness of the Company.
 
  Since the original execution of the Subordinated Indenture, the Company has
issued $200 million in aggregate principal amount 9% Subordinated Notes Due
June 15, 1999, $100 million in aggregate principal amount 9 7/8% Subordinated
Notes Due August 15, 2000, $100 million in aggregate principal amount of 11
1/4% Subordinated Notes Due February 20, 2001, $100 million in aggregate
principal amount of 10 1/4% Subordinated Notes Due May 1, 2001, $100 million in
aggregate principal amount of 9 1/4% Subordinated Notes Due November 15, 2001,
$100 million in aggregate principal amount of 8 7/8% Subordinated Notes Due
March 15, 2002, $100 million in aggregate principal amount of 8 1/4%
Subordinated Notes Due June 15, 2002 and $5 million in aggregate principal
amount of 9 1/5% Subordinated Notes Due December 17, 2001 (collectively, the
"Additional Subordinated Indebtedness"). The Company has also issued $200
million in aggregate principal amount of 7 5/8% Subordinated Notes due January
15, 2003 (the "January 2003 Subordinated Notes"), $200 million in aggregate
principal amount 6 7/8% Subordinated Notes Due June 15, 2003 (the "June 2003
Subordinated Notes") and $150 million in aggregate principal amount Floating
Rate Subordinated Notes Due July 28, 2003 (the "July 2003 Subordinated Notes")
since the original execution of the Subordinated Indenture. The January 2003
Subordinated Notes, the June 2003 Subordinated Notes and the July 2003
Subordinated Notes constitute New Subordinated Securities.
 
  Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Subordinated Securities offered thereby, Existing
Subordinated Indebtedness means the 1996 Subordinated Capital Notes, the 1999
Subordinated Notes and the Additional Subordinated Indebtedness. The New
Subordinated Securities rank and will rank pari passu with the Existing
Subordinated Indebtedness, subject to the obligations of the holders of New
Subordinated Securities to pay over any Excess Proceeds to creditors in respect
of General Obligations. Thus, in the event of a distribution of assets of the
Company upon any dissolution, winding up, liquidation or reorganization, the
holders of the New Subordinated Securities may receive less, ratably, than
holders of Existing Subordinated Indebtedness.
 
  Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Subordinated Securities offered thereby, General
Obligations means all obligations of the Company to make payment on account of
claims in respect of derivative products such as interest and foreign exchange
rate contracts,
 
                                       16

 
commodity contracts and similar arrangements, other than (i) obligations on
account of Senior Indebtedness, (ii) obligations on account of indebtedness for
money borrowed ranking pari passu with or subordinate to the Subordinated
Securities and (iii) obligations which by their terms are expressly stated not
to be superior in right of payment to the Subordinated Securities or to rank on
parity with the Subordinated Securities; provided, however, that
notwithstanding the foregoing, in the event that any rule, guideline or
interpretation promulgated or issued by the Federal Reserve Board (or other
competent regulatory agency or authority), as from time to time in effect,
establishes or specifies criteria for the inclusion in regulatory capital of
subordinated debt of a bank holding company requiring that such subordinated
debt be subordinated to obligations to creditors in addition to those set forth
above, then the term "General Obligations" shall also include such additional
obligations to creditors, as from time to time in effect pursuant to such
rules, guidelines or interpretations. For purposes of this definition, "claim"
shall have the meaning assigned thereto in Section 101(4) of the Bankruptcy
Code 1978, as amended to the date of the Second Supplemental Indenture.
 
  As of June 30, 1993, the aggregate amount of Senior Indebtedness and General
Obligations of the Company was approximately $1.7 billion.
 
LIMITED RIGHTS OF ACCELERATION
 
  Unless otherwise specified in the Prospectus Supplement relating to any
series of Subordinated Securities, payment of principal of the New Subordinated
Securities may be accelerated only in case of the bankruptcy or reorganization
of the Company. There is no right of acceleration in the case of a default in
the payment of principal of, premium, if any, or interest on the New
Subordinated Securities or the performance of any other covenant of the Company
in the Subordinated Indenture. Payment of principal of the Existing
Subordinated Indebtedness may be accelerated in the case of the bankruptcy,
insolvency or reorganization of the Company. Such payment may also be
accelerated in the case of certain events of insolvency or receivership of
FNBC.
 
EVENTS OF DEFAULT, DEFAULTS, WAIVERS, ETC.
 
  An Event of Default with respect to New Subordinated Securities of any series
is defined in the Subordinated Indenture as certain events involving the
bankruptcy or reorganization of the Company and any other Event of Default
provided with respect to Subordinated Securities of that series. An Event of
Default with respect to the Additional Subordinated Indebtedness of any series
is defined in the Subordinated Indenture as certain events involving the
bankruptcy, insolvency, receivership or reorganization of the Company or FNBC
and any other Event of Default with respect to Additional Subordinated
Securities of that series. A Default with respect to Subordinated Securities of
any series is defined in the Subordinated Indenture as (i) an Event of Default
with respect to such series, (ii) default in the payment of the principal of or
premium, if any, on any Subordinated Security of such series when due, (iii)
default in the payment of interest upon any Subordinated Security of such
series when due and the continuance of such default for a period of 30 days,
(iv) default in the performance of any other covenant or agreement of the
Company in the Subordinated Indenture with respect to Subordinated Securities
of such series and continuance of such default for 60 days after written
notice, or (v) any other Default provided with respect to Subordinated
Securities of any series. If an Event of Default with respect to any series of
Subordinated Securities for which there are Subordinated Securities outstanding
under the Subordinated Indenture occurs and is continuing, either Bank of
America, as Trustee, or the holders of not less than 25% in aggregate principal
amount of the Subordinated Securities of such series may declare the principal
amount (or if such Subordinated Securities are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all Subordinated Securities of that series to be
immediately due and payable. The holders of a majority in aggregate principal
amount of the Subordinated Securities of any series outstanding under the
Subordinated Indenture may waive an Event of Default resulting in acceleration
of such Subordinated Securities, but only if all Defaults have been remedied
and all payments due (other than those due as a result of acceleration) have
been made. If a Default occurs and is continuing, Bank of America may in its
discretion, and at the written request of holders of not less than a majority
in aggregate principal amount of the Subordinated Securities of any series
outstanding under the Subordinated Indenture and upon reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request and subject to certain other conditions set forth in the
Subordinated Indenture shall, proceed to protect the rights of the holders of
all the
 
                                       17

 
Subordinated Securities of such series. Prior to acceleration of maturity of
the Subordinated Securities of any series outstanding under the Subordinated
Indenture, the holders of a majority in aggregate principal amount of such
Subordinated Securities may waive any past default under the Subordinated
Indenture except a default in the payment of principal of, premium, if any, or
interest on the Subordinated Securities of such series.
 
  The Subordinated Indenture provides that in the event of a Default specified
in clauses (ii) or (iii) of the immediately preceding paragraph in payment of
principal of, premium, if any, or interest on any Subordinated Security of any
series, the Company will, upon demand of Bank of America, pay to it, for the
benefit of the holder of any such Subordinated Security, the whole amount then
due and payable on such Subordinated Security for principal, premium, if any,
and interest. The Subordinated Indenture further provides that if the Company
fails to pay such amount forthwith upon such demand, Bank of America may, among
other things, institute a judicial proceeding for the collection thereof.
 
  The Subordinated Indenture also provides that notwithstanding any other
provision of the Subordinated Indenture, the holder of any Subordinated
Security of any series shall have the right to institute suit for the
enforcement of any payment of principal of, premium, if any, and interest on
such Subordinated Security on the respective Stated Maturities (as defined in
the Subordinated Indenture) expressed in such Subordinated Security and that
such right shall not be impaired without the consent of such holder.
 
  The Company is required to file annually with Bank of America a written
statement of officers as to the existence or non-existence of defaults under
the Subordinated Indenture or the Subordinated Securities.
 
REGARDING BANK OF AMERICA
 
  Bank of America, the successor Trustee to Security Pacific National Bank
under the Subordinated Indenture, has a principal corporate trust office at 333
South Beaudry Avenue, 25th Floor, Los Angeles, California 90017. The Company
has normal banking relationships with Bank of America.
 
                          DESCRIPTION OF DEBT WARRANTS
 
  The Company may issue Debt Warrants for the purchase of Debt Securities. Debt
Warrants may be issued independently or together with any Debt Securities
offered by any Prospectus Supplement and may be attached to or separate from
such Debt Securities. The Debt Warrants are to be issued under warrant
agreements (each a "Debt Warrant Agreement") to be entered into between the
Company and a warrant agent which will be designated in the applicable
Prospectus Supplement (the "Debt Warrant Agent"), all as set forth in the
Prospectus Supplement relating to the particular issue of Debt Warrants (the
"Offered Debt Warrants"). The Debt Warrant Agent will act solely as an agent of
the Company in connection with the Debt Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Debt Warrants. The following summaries of certain
provisions of the form of Debt Warrant Agreement and the warrant certificates
representing the Debt Warrants (the "Debt Warrant Certificates"), if any, do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Debt Warrant Agreement and
the Debt Warrant Certificates, respectively, including the definitions therein
of certain terms, which Agreement and Certificates will be filed as exhibits to
or incorporated by reference in the Registration Statement of which this
Prospectus forms a part.
 
  If Debt Warrants are offered, the Prospectus Supplement will describe the
terms of the Offered Debt Warrants, the Debt Warrant Agreement relating to the
Offered Debt Warrants and the Debt Warrant Certificates representing the
Offered Debt Warrants, if any, including the following: (1) the offering price;
(2) the currency or currency unit in which the price for the Offered Debt
Warrants may be payable; (3) the designation, aggregate principal amount and
terms of the Debt Securities purchasable upon exercise of the
 
                                       18

 
Offered Debt Warrants; (4) if applicable, the designation and terms of the Debt
Securities with which the Offered Debt Warrants are issued and the number of
Offered Debt Warrants issued with each such Debt Security; (5) if the Debt
Securities purchasable upon exercise of Offered Debt Warrants are denominated
in a currency or currency unit other than U.S. dollars, the denomination of
such Debt Securities and the currency or units based on or relating to
currencies (including ECU) in which the principal of, premium, if any, and
interest on such Debt Securities will be payable; (6) if applicable, the date
on and after which the Offered Debt Warrants and the related Debt Securities
will be separately transferable; (7) the principal amount of Debt Securities
purchasable upon exercise of an Offered Debt Warrant and the price at which,
and currency or currency units based on or relating to currencies (including
ECU) in which, such principal amount of Debt Securities may be purchased upon
such exercise; (8) the date on which the right to exercise the Offered Debt
Warrants shall commence and the date on which such right shall expire; (9) if
applicable, a discussion of certain Federal income tax, accounting and other
special considerations, procedures and limitations; (10) whether the Debt
Warrants represented by the Debt Warrant Certificates will be issued as
Registered Securities or Bearer Securities; and (11) any other terms of the
Offered Debt Warrants, including terms, procedures and limitations relating to
the exchange and exercise of the Offered Debt Warrants.
 
                        DESCRIPTION OF CURRENCY WARRANTS
 
  The Company may issue Currency Warrants which, upon exercise at a permitted
time or times in the future, entitle any holder thereof to receive the Cash
Settlement Value (as defined below) of two designated currencies. Currency
Warrants may be issued independently or together with any Debt Securities
offered by any Prospectus Supplement and may be attached to or separate from
such Debt Securities. The Currency Warrants are to be issued under warrant
agreements (each a "Currency Warrant Agreement") to be entered into between the
Company and a warrant agent which will be designated in the applicable
Prospectus Supplement (the "Currency Warrant Agent"), all as set forth in the
Prospectus Supplement relating to the particular issue of Currency Warrants
(the "Offered Currency Warrants"). The Currency Warrant Agent will act solely
as an agent of the Company in connection with the Currency Warrants and will
not assume any obligation or relationship of agency or trust for or with any
holder or beneficial owners of Currency Warrants. The following summaries of
certain provisions of the form of Currency Warrant Agreement do not purport to
be complete and are subject to and are qualified in their entirety by reference
to all the provisions of the Currency Warrant Agreement and the form of
certificate, if any, representing the Currency Warrants (the "Currency Warrant
Certificates"), respectively, including the definitions therein of certain
terms which Agreement and Certificate, if any, will be filed as an exhibit to
or incorporated by reference in the Registration Statement of which this
Prospectus forms a part.
 
  The Currency Warrants will not require, or entitle, any holder thereof to
sell any foreign currency to the Company. The Company will make only a U.S.
dollar cash settlement upon exercise of a Currency Warrant and will not be
obligated to purchase or take delivery of any foreign currency from any holder
of a Currency Warrant.
 
  The "Cash Settlement Value" of an exercised Currency Warrant will be an
amount stated in U.S. dollars which is the greater of (i) zero and (ii) an
amount equal to (a) the nominal amount of such Currency Warrant, minus (b) an
amount equal to the nominal amount of such Currency Warrant times a fraction,
the numerator of which is the Strike Price of such Currency Warrant and the
denominator of which is the Spot Rate of such Currency Warrant on the Exercise
Date. The "nominal amount" of a Currency Warrant refers to the principal
amount, expressed in U.S. dollars, of a currency (the "Base Currency") which is
to be compared to another currency (the "Second Currency") upon exercise of
such Currency Warrant. Unless otherwise specified in the applicable Prospectus
Supplement, the Base Currency shall be U.S. dollars. The "Strike Price" is the
designated rate of exchange of the Base Currency for the Second Currency which
the Company will specify in the Prospectus Supplement relating to the Offered
Currency Warrants. The "Spot Rate" refers to the floating rate of exchange of
the Base Currency for the Second Currency on any given date, as quoted by a
 
                                       19

 
reference bank or banks or other institution at a designated time of day, such
source of quotations and time to be specified in the applicable Prospectus
Supplement. The "Exercise Date" refers to the effective date on which the
holder of a Currency Warrant exercises such Currency Warrant.
 
  If Currency Warrants are offered, the Prospectus Supplement will describe the
terms of the Offered Currency Warrants, the Currency Warrant Agreement relating
to the Offered Currency Warrants and, if applicable, Currency Warrant
Certificates, including the following: (1) the aggregate number of Offered
Currency Warrants; (2) the Nominal Amount of each Offered Currency Warrant; (3)
the price of the Offered Currency Warrants; (4) the Base Currency and the
Second Currency; (5) the Strike Price for the Offered Currency Warrants; (6)
the reference bank or banks or other institution and time of day to be used to
determine the Spot Rate; (7) the date on which the right to exercise the
Offered Currency Warrants shall begin and the date on which such right shall
terminate; (8) if applicable, the minimum or maximum amount of Offered Currency
Warrants which may be exercised at any one time; (9) the place or places at
which payment of the Cash Settlement Value is to be made by the Company; (10)
whether the Offered Currency Warrants will be represented by certificates or
issued in book-entry form; (11) the method by which the Offered Currency
Warrants are to be exercised; (12) the Federal income tax consequences and
other special considerations, procedures and limitations applicable to such
Offered Currency Warrants; and (13) any other terms of the Offered Currency
Warrants, including risk factors specifically relating to the Base Currency or
Second Currency and Currency Warrants relating to such currencies.
 
                      DESCRIPTION OF STOCK-INDEX WARRANTS
 
  The Company may issue Stock Index Warrants which, upon exercise at a
permitted time or times in the future, entitle any holder thereof to receive an
amount of cash determined by references to increases and/or decreases in the
level of a specified stock index. Stock-Index Warrants may be issued
independently or together with other Securities offered by any Prospectus
Supplement and may be attached to or separate from such other Securities. The
Stock-Index Warrants are to be issued under one or more warrant agreements
(each a "Stock-Index Warrant Agreement") to be entered into between the Company
and a bank or trust company, as stock-index warrant agent which will be
designated in the applicable Prospectus Supplement (the "Stock-Index Warrant
Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Stock-Index Warrants. The Stock-Index Warrant Agent will
act solely as an agent of the Company in connection with the Stock-Index
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holder or beneficial owners of Stock-Index Warrants. The
following summaries of certain provisions of the form of Stock-Index Warrant
Agreement and form of certificate, if any, representing the Stock-Index
Warrants (the "Stock-Index Warrant Certificates") do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
the provisions of the Stock-Index Warrant Agreement and the Stock-Index Warrant
Certificates, respectively, including the definitions therein of certain terms
which Agreement and Certificate, if any, will be filed as an exhibit to or
incorporated by reference in the Registration Statement of which this
Prospectus forms a part.
 
  The Company may issue Stock-Index Warrants either in the form of Stock-Index
Put Warrants entitling the holders thereof to receive from the Company the
Stock-Index Cash Settlement Value (as described in the applicable Prospectus
Supplement) in U.S. dollars, which amount will be determined by reference to
the amount, if any, by which the Stock-Index Exercise Price (as described in
the applicable Prospectus Supplement) exceeds the closing value of the Index on
the valuation date (the "Index Value") at the time of exercise, or in the form
of Stock-Index Call Warrants entitling the holders thereof to receive from the
Company the Stock-Index Cash Settlement Value in U.S. dollars, which amount
will be determined by reference to the amount, if any, by which the Index Value
at the time of exercise exceeds the Stock-Index Exercise Price.
 
  The Prospectus Supplement for an issue of Stock-Index Warrants will set forth
the formula pursuant to which the Stock-Index Cash Settlement Value will be
determined. In addition, if so specified in the applicable
 
                                       20

 
Prospectus Supplement, following the occurrence of a Market Disruption Event
(as defined therein), the Stock-Index Cash Settlement Value may be determined
on a different basis than under normal exercise of a Stock-Index Warrant.
 
  Unless otherwise indicated in the Prospectus Supplement, a Stock-Index
Warrant will be settled only in cash and, accordingly, will not require or
entitle a holder thereof to sell, deliver, purchase or take delivery of any
shares of any underlying stock or any other securities. The holders will not be
entitled to any of the rights of the holders of any underlying stock.
 
  If Stock-Index Warrants are offered, the Prospectus Supplement will describe
the terms of Stock-Index Warrants offered thereby, including the following: (1)
whether such Stock-Index Warrants are Stock-Index Put Warrants, Stock-Index
Call Warrants or both; (2) the aggregate amount of such Stock-Index Warrants;
(3) the offering price; (4) the stock index for such Stock-Index Warrants,
which may be based on one or more U.S. or foreign stocks or a combination
thereof and may be a preexisting U.S. or foreign stock index compiled and
published by a third party or an index based on one or more underlying stock or
stocks selected by the Company solely in connection with the issuance of such
Stock-Index Warrants, and certain information regarding such stock index and
the underlying stock or stocks; (5) the date on which the right to exercise
such Stock-Index Warrants commences and the date on which such right expires
(the "Stock-Index Warrant Expiration Date"); (6) the procedures and conditions
relating to exercise; (7) the circumstances, if any, which will cause the
Stock-Index Warrants to be deemed to be automatically exercised; (8) the
minimum number, if any, of Stock-Index Warrants to be exercised at any one time
other than upon automatic exercise and any other restrictions on exercise; (9)
the maximum number, if any, of such Stock-Index Warrants that may, subject to
the Company's election, be exercised by all owners (or by any person or entity)
on any day; (10) the method of providing for a substitute index or otherwise
determining the amount payable in connection with the exercise of such Stock-
Index Warrants if the stock index changes or ceases to be made available by its
publisher, which determination will be made by an independent expert; (11) the
national securities exchange on which the Stock-Index Warrants will be listed,
if any; (12) whether the Stock-Index Warrants will be issued in certificated or
book-entry form; (13) the place or places at which payment of the Stock-Index
Cash Settlement Value is to be made by the Company; (14) information with
respect to book-entry procedures, if any; (15) the plan of distribution of such
Stock-Index Warrants; (16) the identity of the Stock-Index Warrant Agent; (17)
any provisions permitting a holder of a Stock-Index Warrant to condition a
stock-index exercise notice on the absence of certain specified changes in the
Index Value after the Stock-Index Warrant Exercise Date; and (18) any other
terms of such Stock-Index Warrants, including risk factors specifically
relating to fluctuations in the applicable stock index and possible illiquidity
in the secondary market.
 
  Prospective purchasers of Stock-Index Warrants should be aware that special
U.S. Federal income tax, accounting and other considerations may be applicable
to instruments such as Stock-Index Warrants. The Prospectus Supplement relating
to any issue of Stock-Index Warrants will describe such considerations.
 
                         DESCRIPTION OF OTHER WARRANTS
 
  The Company may issue Other Warrants, if permitted under applicable law, to
buy or sell debt securities of or guaranteed by the United States, to buy or
sell a commodity or a unit of a commodity index or to buy or sell some other
item or unit of an index other than indices covered by Stock-Index Warrants
(collectively, "Exercise Items"). Owners of Other Warrants will be entitled to
receive from the Company the cash settlement value in U.S. dollars of the right
to buy or sell the Exercise Items (the "Other Warrant Cash Settlement Value").
An Owner of Other Warrants will receive a cash payment upon exercise only if
the Other Warrants have an Other Warrant Cash Settlement Value in excess of
zero at that time.
 
  Other Warrants may be issued independently or together with other Securities
offered by any Prospectus Supplement and may be attached to or separate from
such other Securities. The Other Warrants are to be issued under one or more
other warrant agreements (the "Other Warrant Agreements") to be entered into
 
                                       21

 
between the Company and a bank or trust company, as warrant agent which will be
designated in the applicable Prospectus Supplement (the "Other Warrant Agent"),
all as set forth in the Prospectus Supplement relating to the particular issue
of Other Warrants. The Other Warrant Agent will act solely as an agent of the
Company in connection with the Other Warrants and will not assume any
obligation or relationship of agency or trust for or with any holder or
beneficial owners of the Other Warrants. The following summaries of certain
provisions of the form of Other Warrant Agreement and form of certificate, if
any, representing the Other Warrants (the "Other Warrant Certificates") do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Other Warrant Agreement and the
Other Warrant Certificates, respectively, including the definitions therein of
certain terms which Agreement and Certificate, if any, will be filed as an
exhibit to or incorporated by reference in the Registration Statement of which
this Prospectus forms a part.
 
  Unless otherwise indicated in the Prospectus Supplement, an Other Warrant
will be settled only in cash, in U.S. dollars, and accordingly, will not
require or entitle an owner thereof to sell, deliver, purchase or take delivery
of any Exercise Items.
 
  If Other Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Other Warrants, including, where applicable, the
following: (1 ) the title and aggregate number of such Other Warrants; (2) the
offering price; (3) the Exercise Items that such Other Warrants represent the
right to buy or sell; (4) the procedures and conditions relating to exercise;
(5) the date on which the right to exercise the Other Warrants shall commence
and the date such right shall expire (the "Other Warrant Expiration Date"); (6)
the method of determining the Other Warrant Cash Settlement Value; (7) whether
such Other Warrants will be issued in certificated or book-entry form; (8)
whether such Other Warrants will be listed on a national securities exchange;
(9) information with respect to book-entry procedures, if any; (10) the
identity of the Other Warrant Agent; and (11) any other terms of such Other
Warrants, including risk factors relating to significant fluctuations in the
market for the applicable Exercise Item, the potential illiquidity of the
secondary market and the risk that the Other Warrants may expire worthless.
 
  Prospective purchasers of Other Warrants should be aware that special U.S.
Federal income tax, accounting and other considerations may be applicable to
instruments such as Other Warrants. The Prospectus Supplement relating to any
issue of Other Warrants will describe such considerations.
 
                       DESCRIPTION OF THE PREFERRED STOCK
 
  The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of
Preferred Stock offered by any Prospectus Supplement will be specified in the
applicable Prospectus Supplement. If so specified in the applicable Prospectus
Supplement, the terms of any series of Preferred Stock may differ from the
terms set forth below. The description of the terms of the Preferred Stock set
forth below and in any Prospectus Supplement does not purport to be complete
and is subject to and qualified in its entirety by reference to the Certificate
of Designation relating to the applicable series of Preferred Stock, which
Certificate will be filed as an exhibit to or incorporated by reference in the
Registration Statement of which this Prospectus forms a part.
 
GENERAL
 
  Pursuant to the Company's Restated Certificate of Incorporation, the Board of
Directors of the Company has the authority, without further stockholder action,
to issue from time to time a maximum of 15,000,000 shares of preferred stock,
without par value, in one or more series and for such consideration, as may be
fixed from time to time by the Board of Directors of the Company, and to fix
before the issuance of any shares of preferred stock of a particular series,
the designation of such series, the number of shares to comprise such series,
the dividend rate or rates payable with respect to the shares of such series,
the redemption price or prices, if any, and the terms and conditions of the
redemption, the voting rights, any
 
                                       22

 
sinking fund provisions for the redemption or purchase of the shares of such
series, the terms and conditions upon which the shares are convertible, if they
are convertible, and any other relative rights, preferences and limitations
pertaining to such series. As of June 30, 1993, there were issued and
outstanding 2,410,000 shares of the Company's Preferred Stock with Cumulative
and Adjustable Dividends ($50 stated value) (the "Series A Preferred Stock"),
1,191,000 shares of the Company's Preferred Stock with Cumulative and
Adjustable Dividends, Series B ($100 stated value) (the "Series B Preferred
Stock"), 713,800 shares of the Company's Preferred Stock with Cumulative and
Adjustable Dividends, Series C ($100 stated value) (the "Series C Preferred
Stock"), 6,000,000 shares of the Company's 10% Cumulative Preferred Stock,
Series D (stated value $25 per share) (the "Series D Preferred Stock"), 160,000
shares of the Company's 8.45% Cumulative Preferred Stock, Series E ($625 stated
value) (the "Series E Preferred Stock"), 2,150,210 shares of the Company's
$3.75 Cumulative Convertible Preferred Stock, Series A ($50 stated value) (the
"Series A Convertible Preferred Stock") and 40,000 shares of the Company's 5
3/4% Cumulative Convertible Preferred Stock, Series B ($5,000 stated value)
(the "Series B Convertible Preferred Stock") (collectively, the "Existing
Preferred Stock"). All shares of the Series A Convertible Preferred Stock were
called for redemption on September 2, 1993, and consequently, as of the date
hereof, no shares remain outstanding. See "Description of Existing Preferred
Stock" herein.
 
  As described under "Description of Depositary Shares" below, the Company may,
at its option, elect to offer depositary shares ("Depositary Shares") evidenced
by depositary receipts, each representing a fraction (to be specified in the
Prospectus Supplement relating to the particular series of Preferred Stock) of
a share of the particular series of the Preferred Stock issued and deposited
with a depositary, in lieu of offering full shares of such series of the
Preferred Stock.
 
  Under interpretations adopted by the Federal Reserve Board, if the holders of
Preferred Stock of any series become entitled to vote for the election of
directors because dividends on such series are in arrears as described under
"Voting Rights" below, such series may then be deemed a "class of voting
securities" and a holder of 25% or more of such series (or a holder of 5% or
more if it otherwise exercises a "controlling influence" over the Company) may
then be subject to regulation as a bank holding company in accordance with the
Bank Holding Company Act of 1956, as amended. In addition, at such time as such
series is deemed a class of voting securities, any other bank holding company
may be required to obtain the prior approval of the Federal Reserve Board to
acquire 5% or more of such series, and any person other than a bank holding
company may be required to obtain the prior approval of the Federal Reserve
Board to acquire 10% or more of such series.
 
  The Preferred Stock shall have the dividend, liquidation, redemption, voting
and conversion rights set forth below unless otherwise specified in the
applicable Prospectus Supplement. Reference is made to the Prospectus
Supplement relating to the particular series of Preferred Stock offered thereby
for specific terms, including: (1) the designation, stated value and
liquidation preference of such Preferred Stock and the number of shares
offered; (2) the initial public offering price at which such shares will be
issued; (3) the dividend rate or rates (or method of calculation), the dividend
periods, the date on which dividends shall be payable and whether such
dividends shall be cumulative or noncumulative and, if cumulative, the dates
from which dividends shall commence to cumulate; (4) any redemption or sinking
fund provisions; (5) any conversion provisions; (6) whether the Company has
elected to offer Depositary Shares as described below under "Description of
Depositary Shares"; and (7) any additional dividend, liquidation, redemption,
sinking fund and other rights, preferences, privileges, limitations and
restrictions of such Preferred Stock.
 
  The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the applicable Prospectus Supplement, the shares
of each series of Preferred Stock will upon issuance rank on a parity in all
respects with the Company's Existing Preferred Stock, described below, and each
other then outstanding series of preferred stock of the Company. The Preferred
Stock will have no preemptive rights to subscribe for any additional securities
which may be issued by the Company. Unless otherwise specified in the
applicable Prospectus Supplement, First Chicago Trust Company of New York will
be the transfer agent and registrar for the Preferred Stock.
 
                                       23

 
  Because the Company is a holding company, its rights and the rights of
holders of its securities, including the holders of Preferred Stock, to
participate in the assets of any Company subsidiary upon the latter's
liquidation or recapitalization will be subject to the prior claims of such
subsidiary's creditors and preferred shareholders, except to the extent the
Company may itself be a creditor with recognized claims against such subsidiary
or a holder of preferred shares of such subsidiary.
 
DIVIDENDS
 
  The holders of the Preferred Stock will be entitled to receive, when, as and
if declared by the Board of Directors of the Company, out of funds legally
available therefor, dividends at such rates and on such dates as will be
specified in the applicable Prospectus Supplement. Such rates may be fixed or
variable or both. If variable, the formula used for determining the dividend
rate for each dividend period will be specified in the applicable Prospectus
Supplement. Dividends will be payable to the holders of record as they appear
on the stock books of the Company (or, if applicable, the records of the
Depositary referred to below under "Description of Depositary Shares") on such
record dates as will be fixed by the Board of Directors of the Company.
Dividends may be paid in the form of cash, Preferred Stock (of the same or a
different series) or Common Stock of the Company, in each case as specified in
the applicable Prospectus Supplement.
 
  Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as specified in the applicable Prospectus Supplement. If the
Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any Preferred Stock for which dividends are
noncumulative ("Noncumulative Preferred Stock"), then the holders of such
Preferred Stock will have no right to receive a dividend in respect of the
dividend period relating to such dividend payment date, and the Company will
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such Preferred Stock are declared or paid on any future dividend
payment dates.
 
  The Company shall not declare or pay or set apart for payment any dividends
on any series of its preferred shares ranking, as to dividends, on a parity
with or junior to the outstanding Preferred Stock of any series unless (i) if
such Preferred Stock has a cumulative dividend ("Cumulative Preferred Stock"),
full cumulative dividends have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for such
payment on such Preferred Stock for all dividend periods terminating on or
prior to the date of payment of any such dividends on such other series of
preferred shares of the Company, or (ii) if such Preferred Stock is
Noncumulative Preferred Stock, full dividends for the then-current dividend
period on such Preferred Stock have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
such payment. When dividends are not paid in full upon Preferred Stock of any
series and any other shares of preferred stock of the Company ranking on a
parity as to dividends with such Preferred Stock, all dividends declared upon
such Preferred Stock and any other preferred shares of the Company ranking on a
parity as to dividends with such Preferred Stock shall be declared pro rata so
that the amount of dividends declared per share on such Preferred Stock and
such other shares shall in all cases bear to each other the same ratio that the
accrued dividends per share on such Preferred Stock (which shall not, if such
Preferred Stock is Noncumulative Preferred Stock, include any accumulation in
respect of unpaid dividends for prior dividend periods) and such other
preferred shares bear to each other. Except as set forth in the preceding
sentence, unless full dividends on the outstanding Cumulative Preferred Stock
of any series have been paid for all past dividend periods and full dividends
for the then-current dividend period on the outstanding Noncumulative Preferred
Stock of any series have been declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment, no dividends
(other than in Common Stock of the Company or other shares of the Company
ranking junior to such Preferred Stock as to dividends and upon liquidation)
shall be declared or paid or set aside for payment, nor shall any other
distribution be made on the Common Stock of the Company or on any other shares
of the Company ranking junior to or on a parity with such Preferred Stock as to
dividends or upon liquidation. Unless full dividends on the Cumulative
Preferred Stock of any series have been paid for all past dividend periods and
full dividends for the then-current dividend period on the Noncumulative
Preferred Stock of any series have been declared and paid or declared and a sum
sufficient for the payment thereof set apart for such
 
                                       24

 
payment, no Common Stock or any other shares of the Company ranking junior to
or on a parity with such Preferred Stock as to dividends or upon liquidation
shall be redeemed, purchased or otherwise acquired for any consideration (or
any moneys be paid or made available for a sinking fund for the redemption of
any such shares) by the Company or any subsidiary of the Company except by
conversion into or exchange for shares of the Company ranking junior to such
Preferred Stock as to dividends and upon liquidation.
 
REDEMPTION
 
  A series of the Preferred Stock may be redeemable, in whole or in part, at
the option of the Company, and may be subject to mandatory redemption pursuant
to a sinking fund or otherwise, in each case upon terms, at the times and at
the redemption prices specified in the applicable Prospectus Supplement and
subject to the rights of holders of other securities of the Company. Preferred
Stock redeemed by the Company will be restored to the status of authorized but
unissued preferred shares.
 
  The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Stock is Noncumulative Preferred Stock,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in cash
or other property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of capital stock of the Company, the terms of such
Preferred Stock may provide that, if no such capital stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Stock shall
automatically and mandatorily be converted into shares of the applicable
capital stock of the Company pursuant to conversion provisions specified in the
applicable Prospectus Supplement.
 
  If fewer than all the outstanding shares of Preferred Stock of any series are
to be redeemed, the number of shares to be redeemed will be determined in a
manner designated by the Board of Directors of the Company and such shares
shall be redeemed pro rata from the holders of record of such shares in
proportion to the number of such shares held by such holders (with adjustments
to avoid redemption of fractional shares) or by lot or by any other method as
may be determined by the Board of Directors of the Company.
 
  Notwithstanding the foregoing, if any dividends, including any accumulation,
on Cumulative Preferred Stock of any series are in arrears, no Preferred Stock
of such series shall be redeemed unless all outstanding Preferred Stock of such
series is simultaneously redeemed, and the Company shall not purchase or
otherwise acquire any Preferred Stock of such series; provided, however, that
the foregoing shall not prevent the purchase or acquisition of Preferred Stock
of such series pursuant to a purchase or exchange offer provided such offer is
made on the same terms to all holders of the Preferred Stock of such series.
 
  Notice of redemption shall be given by mailing the same to each record holder
of the Preferred Stock to be redeemed, not less than 30 nor more than 60 days
prior to the date fixed for redemption thereof, to the respective addresses of
such holders as the same shall appear on the stock books of the Company. Each
notice shall state: (i) the redemption date; (ii) the number of shares and
series of the Preferred Stock to be redeemed; (iii) the redemption price; (iv)
the place or places where certificates for such Preferred Stock are to be
surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi)
the date upon which the holder's conversion rights, if any, as to such shares,
shall terminate. If fewer than all the shares of Preferred Stock of any series
held by any holder are to be redeemed, the notice mailed to such holder shall
also specify the number of shares of Preferred Stock to be redeemed from such
holder.
 
  If notice of redemption of any shares of Preferred Stock has been given, from
and after the redemption date for such shares (unless default shall be made by
the Company in providing money for the payment of
 
                                       25

 
the redemption price of such shares), dividends on such shares shall cease to
accrue and such shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as shareholders of the Company (except the right
to receive the redemption price) shall cease. Upon surrender in accordance with
such notice of the certificates representing any such shares (properly endorsed
or assigned for transfer, if the Board of Directors of the Company shall so
require and the notice shall so state), the redemption price set forth above
shall be paid out of the funds provided by the Company. If fewer than all the
shares represented by any such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares without cost to the holder
thereof.
 
CONVERSION RIGHTS
 
  The Prospectus Supplement relating to a series of the Preferred Stock that is
convertible will state the terms on which shares of such series are convertible
into the Company's Common Stock, or another series of Preferred Stock.
 
RIGHTS UPON LIQUIDATION
 
  In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of Preferred Stock shall be entitled to
receive out of the assets of the Company available for distribution to
shareholders, before any distribution of assets is made to holders of Common
Stock or any other class or series of shares ranking junior to such Preferred
Stock upon liquidation, liquidating distributions in the amount of the
liquidation preference of such Preferred Stock plus accrued and unpaid
dividends (which shall not, if such Preferred Stock is Noncumulative Preferred
Stock, include any accumulation in respect of unpaid dividends for prior
dividend periods). If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company the amounts payable with respect to
Preferred Stock of any series and any other shares of the Company ranking as to
any such distribution on a parity with such Preferred Stock are not paid in
full, the holders of such Preferred Stock and of such other shares will share
ratably in any such distribution of assets of the Company in proportion to the
full respective preferential amounts to which they are entitled. After payment
of the full amount of the liquidating distribution to which they are entitled,
the holders of Preferred Stock of any series will not be entitled to any
further participation in any distribution of assets by the Company.
 
VOTING RIGHTS
 
  Except as indicated below or in the applicable Prospectus Supplement, or
except as expressly required by applicable law, the holders of the Preferred
Stock will not be entitled to vote. In the event the Company issues full shares
of any series of Preferred Stock, each such share will be entitled to one vote
on matters on which holders of such series of the Preferred Stock are entitled
to vote. However, as more fully described under "Description of Depositary
Shares" below, if the Company elects to issue Depositary Shares representing a
fraction of a share of a series of Preferred Stock, each such Depositary Share
will, in effect, be entitled to such fraction of a vote, rather than a full
vote, per Depositary Share. Since each full share of any series of Preferred
Stock of the Company shall be entitled to one vote, the voting power of such
series, on matters on which holders of such series and holders of other series
of Preferred Stock are entitled to vote as a single class, shall depend on the
number of shares in such series, not the aggregate stated value, liquidation
preference or initial offering price of the shares of such series of Preferred
Stock.
 
  If the equivalent of six quarterly dividends payable on any series of
Preferred Stock are in default, the number of directors of the Company will be
increased by two and the holders of all outstanding series of Preferred Stock,
voting as a single class without regard to series, will be entitled to elect
such additional two directors until all dividends in default have been paid or
declared and set apart for payment.
 
  The affirmative vote or consent of the holders of at least 66 2/3 percent of
the outstanding shares of Preferred Stock of any series, voting as a class,
will be required for any amendment to the Company's
 
                                       26

 
Certificate of Incorporation (or any certificate supplemental thereto) that
will adversely affect the powers, preferences, privileges or rights of the
Preferred Stock of such series. The affirmative vote or consent of the holders
of at least 66 2/3 percent of the outstanding shares of Preferred Stock of any
series and any other series of preferred shares of the Company ranking on a
parity with the Preferred Stock of such series as to dividends or upon
liquidation, voting as a single class without regard to series, will be
required to authorize, effect or validate the creation, authorization or issue
of any shares of any class of stock of the Company ranking prior to the
Preferred Stock of such series as to dividends or upon liquidation, or the
reclassification of any authorized stock of the Company into any such prior
shares, or the creation, authorization or issue of any obligation or security
convertible into or evidencing the right to purchase any such prior shares.
 
  Subject to such affirmative vote or consent of the holders of the outstanding
shares of Preferred Stock of any series, the Company may, by resolution of its
Board of Directors or as otherwise permitted by law, from time to time alter or
change the preferences, rights or powers of the Preferred Stock of such series.
The holders of the Preferred Stock of such series shall not be entitled to
participate in any such vote if, at or prior to the time when any such
alteration or change is to take effect, provision is made for the redemption of
all the Preferred Stock of such series at the time outstanding. Nothing in this
section shall be taken to require a class vote or consent in connection with
the authorization, designation, increase or issuance of any shares of any class
or series (including additional Preferred Stock of any series) that rank junior
to or on a parity with the Preferred Stock of such series as to dividends and
liquidation rights or in connection with the authorization, designation,
increase or issuance of any bonds, mortgages, debentures or other obligations
of the Company.
 
                        DESCRIPTION OF DEPOSITARY SHARES
 
GENERAL
 
  The Company may, at its option, elect to offer fractional shares of Preferred
Stock, rather than full shares of Preferred Stock. In the event such option is
exercised, the Company will issue to the public receipts for Depositary Shares,
each of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to a particular series of Preferred Stock) of a share of a
particular series of Preferred Stock as described below.
 
  The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000 (the "Depositary"). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption, conversion and
liquidation rights).
 
  The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipt will be filed as exhibits to,
or incorporated by reference in, the Registration Statement of which this
Prospectus is a part, and the following summary is qualified in its entirety by
reference to such exhibits.
 
  Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will
be exchangeable for definitive Depositary Receipts at the Company's expense.
 
 
                                       27

 
  Upon surrender of Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called
for redemption), the owner of the Depositary Shares evidenced thereby is
entitled to delivery at such office, to or upon his order, of the number of
whole shares of Preferred Stock and any money or other property represented by
such Depositary Shares. Partial shares of Preferred Stock will not be issued.
If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing a
number of whole shares of Preferred Stock to be withdrawn, the Depositary will
deliver to such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares. Holders of shares of Preferred Stock
thus withdrawn will not thereafter be entitled to deposit such shares under the
Deposit Agreement or to receive Depositary Shares therefor. The Company does
not expect that there will be any public trading market for withdrawn shares of
Preferred Stock.
 
DIVIDENDS AND OTHER DISTRIBUTIONS
 
  The Depositary will distribute all cash dividends or other cash distributions
received in respect of the Preferred Stock to the record holders of Depositary
Shares relating to such Preferred Stock in proportion to the numbers of such
Depositary Shares owned by such holders. The Depository shall distribute only
such amount, however, as can be distributed without attributing to any holder
of Depositary Shares a fraction of one cent, and any balance not so distributed
shall be added to and treated as part of the next sum received by the
Depositary for distribution to record holders of Depositary Shares.
 
  In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
 
REDEMPTION OF DEPOSITARY SHARES
 
  If a series of Preferred Stock represented by Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The Depositary shall mail
notice of redemption not less than 30 nor more than 60 days prior to the date
fixed for redemption to the record holders of the Depositary Shares to be so
redeemed at their respective addresses appearing in the Depositary's books. The
redemption price per Depositary Share will be equal to the applicable fraction
of the redemption price per share payable with respect to such series of the
Preferred Stock. Whenever the Company redeems shares of Preferred Stock held by
the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares representing shares of Preferred Stock so redeemed.
If less than all the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by lot or pro rata as may be determined
by the Depositary.
 
  After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
 
VOTING THE PREFERRED STOCK
 
  Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of the Preferred Stock
 
                                       28

 
represented by such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of the Preferred Stock represented
by such Depositary Shares in accordance with such instructions, and the Company
will agree to take all action which may be deemed necessary by the Depositary
in order to enable the Depositary to do so. The Depositary will abstain from
voting shares of the Preferred Stock to the extent it does not receive specific
instructions from the holders of Depositary Shares representing such Preferred
Stock.
 
TAXATION
 
  Owners of the Depositary Shares will be treated for Federal income tax
purposes as if they were owners of the series of Preferred Stock represented by
such Depositary Shares and, accordingly, will be entitled to take into account
for Federal income tax purposes income and deductions to which they would be
entitled if they were holders of such series of Preferred Stock. In addition,
(i) no gain or loss will be recognized for Federal income tax purposes upon the
withdrawal of Preferred Stock in exchange for Depositary Shares as provided in
the Deposit Agreement, (ii) the tax basis of each share of Preferred Stock to
an exchanging owner of Depositary Shares will, upon such exchange, be the same
as the aggregate tax basis of the Depositary Shares exchanged therefor and
(iii) the holding period for shares of the Preferred Stock in the hands of an
exchanging owner of Depositary Shares who held such Depositary Shares as a
capital asset at the time of the exchange thereof for Preferred Stock will
include the period during which such person owned such Depositary Shares.
 
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
 
  The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding. The Deposit Agreement may
be terminated by the Company or the Depositary only if (i) all outstanding
Depositary Shares have been redeemed or (ii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Receipts.
 
CHARGES OF DEPOSITARY
 
  The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of
the Preferred Stock and any redemption of the Preferred Stock. Holders of
Depositary Receipts will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
 
MISCELLANEOUS
 
  The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock.
 
  Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Receipts or other persons
believed to be competent and on documents believed to be genuine.
 
                                       29

 
RESIGNATION AND REMOVAL OF DEPOSITARY
 
  The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
 
                    DESCRIPTION OF EXISTING PREFERRED STOCK
 
  The outstanding Series A Preferred Stock, Series B Preferred Stock and Series
C Preferred Stock of the Company were issued in October 1982, February 1983,
and February 1984, respectively. The dividend rate on each series is adjusted
quarterly, based on a formula that considers the interest rates for selected
short- and long-term U.S. Treasury securities prevailing at the time the rate
is set. The Company's Series B Convertible Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock, which were issued in March 1993, May 1991
and November 1992, respectively, have fixed dividend rates. The Existing
Preferred Stock ranks prior to the Company's Common Stock, both as to dividends
and upon liquidation, but has no general voting rights (except as described
under "Description of Preferred Stock--Voting Rights"). Each series of the
Existing Preferred Stock ranks pari passu with each other series of the
Existing Preferred Stock with respect to dividends and liquidation rights.
 
  The Series A Preferred Stock is subject to a minimum and maximum dividend
rate of 7.00 percent and 15.00 percent, respectively. The dividend rate for the
quarterly dividend period ended September 30, 1993, is 7.00 percent. Shares of
this series are redeemable, at the option of the Company, at their stated value
of $50 per share plus accrued and unpaid dividends. Shares of this series are
not convertible into other securities of the Company.
 
  The Series B Preferred Stock is subject to a minimum and maximum dividend
rate of 6.00 percent and 12.00 percent, respectively. The dividend rate for the
quarterly period ended November 30, 1993, is 6.00 percent. Shares of this
series are redeemable, at the option of the Company, at their stated value of
$100 per share plus accrued and unpaid dividends. Shares of this series are not
convertible into other securities of the Company.
 
  The Series C Preferred Stock is subject to a minimum and maximum dividend
rate of 6.50 percent and 12.50 percent, respectively. The dividend rate for the
quarterly period ended November 30, 1993, is 6.50 percent. Shares of this
series are redeemable, at the option of the Company, through February 28, 1994,
at a redemption price equal to $103.00 per share, and thereafter at their
stated value of $100 per share plus accrued and unpaid dividends. Shares of
this series are not convertible into other securities of the Company.
 
  The Series D Preferred Stock has an annual dividend rate equal to $2.50, or
10 percent, which was fixed at the date of issue. Shares of this series are
redeemable, at the option of the Company, at any time on or after June 1, 1994,
at a redemption price equal to $25.75 per share during the twelve-month period
ending May 31, 1995, at a redemption price equal to $25.375 per share during
the twelve-month period ending May 31, 1996, and thereafter at their stated
value of $25 per share plus, in each case, accrued and unpaid dividends. Shares
of this series are not convertible into other securities of the Company.
 
  The Series E Preferred Stock is represented by depositary shares with each
depositary share representing a one-twenty-fifth interest in a share of Series
E Preferred Stock. The Series E Preferred Stock has an annual dividend rate
equal to $52.8125 ($2.1125 per depositary share), or 8.45 percent, which was
fixed at the date of issue. Shares of this series are redeemable, at the option
of the Company, at any time on or after November 16, 1997 at a redemption price
of $625 per share ($25 per depositary share). Shares of this series are not
convertible into other securities of the Company.
 
                                       30

 
  The Series B Convertible Preferred Stock is represented by depositary shares
with each depositary share representing a one-hundredth interest in a share of
Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock
has an annual dividend rate equal to $287.50 ($2.875 per depositary share), or
5 3/4 percent, which was fixed at the date of issue. Shares of the Company's
Series B Convertible Preferred Stock may be converted into shares of the
Company's Common Stock at a conversion price of $53 5/8 per share of Common
Stock (equivalent to a conversion rate of .9324 share of Common Stock for each
depositary share) at the option of the stockholder at any time. Resultant
fractional interests are paid in cash. The conversion rate is subject to
adjustment for certain stock dividends, subdivisions, splits and combinations,
certain distributions of assets and debt to holders of Common Stock, certain
reclassifications of Common Stock into other securities and certain
distributions of rights or warrants to purchase Common Stock at a price per
share less than the Common Stock's then market value. Shares of this series are
redeemable, at the option of the Company, on or after April 1, 1997, through
March 30, 2003, at an original redemption price of $5,172.50 ($51.7250 per
depositary share), declining over such period to $5,028.75 ($50.2875 per
depositary share), and thereafter at their stated value of $5,000 per share
($50.00 per depositary share) plus accrued and unpaid dividends.
 
  All shares of the Series A Convertible Preferred Stock were called for
redemption on September 2, 1993. Shares of the Series A Convertible Preferred
Stock were convertible into 1.391 shares of the Company's Common Stock at the
option of the stockholder through August 26, 1993, and 2,134,568 shares of the
stock were so converted into 2,968,781 shares of the Company's Common Stock.
Resultant fractional shares were paid in cash. On September 2, 1993, the
Company redeemed the remaining 15,642 shares of the Series A Convertible
Preferred at the redemption price of $51.50 per share plus accrued and unpaid
dividends through the redemption date.
 
  The shares of the outstanding Existing Preferred Stock (or with respect to
the Series E Preferred Stock and the Series B Convertible Preferred Stock, the
outstanding depositary shares representing such stock), are listed on the New
York Stock Exchange. First Chicago Trust Company of New York serves as transfer
agent, registrar and dividend disbursing agent for shares of the Existing
Preferred Stock and the depositary shares representing such stock. The First
National Bank of Chicago also serves as depositary for the shares of Existing
Preferred Stock represented by depositary shares.
 
                    DESCRIPTION OF PREFERRED STOCK WARRANTS
 
  The Company may issue Preferred Stock Warrants for the purchase of Preferred
Stock. Preferred Stock Warrants may be issued independently or together with
other Securities offered by any Prospectus Supplement and may be attached to or
separate from such other Securities. Each series of Preferred Stock Warrants
will be issued under one or more warrant agreements (each a "Preferred Stock
Warrant Agreement") to be entered into between the Company and a bank or trust
company, as preferred stock warrant agent which will be designated in the
applicable Prospectus Supplement (the "Preferred Stock Warrant Agent"), all as
set forth in the Prospectus Supplement relating to the particular issue of
Preferred Stock Warrants. The Preferred Stock Warrant Agent will act solely as
an agent of the Company in connection with the Preferred Stock Warrants and
will not assume any obligation or relationship of agency or trust for or with
any holders of Preferred Stock Warrant Certificates or beneficial owners of
Preferred Stock Warrants. The following summaries of certain provisions of the
form of Preferred Stock Warrant Agreement and form of certificate representing
the Preferred Stock Warrants (the "Preferred Stock Warrant Certificates") do
not purport to be complete and are subject to and are qualified in their
entirety by reference to, all the provisions of the Preferred Stock Warrant
Agreement and the Preferred Stock Warrant Certificates which Agreement and
Certificate will be filed as an exhibit to or incorporated by reference in the
Registration Statement of which this Prospectus forms a part.
 
                                       31

 
GENERAL
 
  If Preferred Stock Warrants are offered, the applicable Prospectus Supplement
will describe the terms of such Preferred Stock Warrants, including the
following, where applicable: (1) the offering price; (2) the designation,
aggregate number and terms of the series of Preferred Stock purchasable upon
exercise of such Preferred Stock Warrants and minimum number of Preferred Stock
Warrants that are exercisable; (3) the designation and terms of the series of
Preferred Stock with which such Preferred Stock Warrants are being offered and
the number of such Preferred Stock Warrants being offered with each such
Preferred Stock; (4) the date on and after which such Preferred Stock Warrants
and the related series of Preferred Stock will be transferable separately; (5)
the number and stated values of the series of Preferred Stock purchasable upon
exercise of each such Preferred Stock Warrant and the price at which such
number of shares of Preferred Stock of such series may be purchased upon such
exercise; (6) the date on which the right to exercise such Preferred Stock
Warrants shall commence and the date on which such right shall expire (the
"Preferred Stock Warrant Expiration Date"); (7) whether the Preferred Stock
Warrants represented by the Preferred Stock Warrant Certificates will be issued
in registered or bearer form; (8) information with respect to book-entry
procedures, if any; and (9) any other terms of such Preferred Stock Warrants
for the purchase of shares of Preferred Stock.
 
  Preferred Stock Warrant Certificates may be exchanged for new Preferred Stock
Warrant Certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Preferred Stock Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of any Preferred
Stock Warrant, a holder thereof shall have no rights of a holder of shares of
the Preferred Stock purchasable upon such exercise, including the right to
receive payment of dividends, if any, on the underlying Preferred Stock or the
right to vote such underlying Preferred Stock.
 
  Prospective purchasers of Preferred Stock Warrants should be aware that
special U.S. Federal income tax, accounting and other considerations may be
applicable to instruments such as Preferred Stock Warrants. The Prospectus
Supplement relating to any issue of Preferred Stock Warrants will describe such
considerations.
 
EXERCISE OF PREFERRED STOCK WARRANTS
 
  Each Preferred Stock Warrant will entitle the holder thereof to purchase such
number of shares of Preferred Stock at such exercise price as shall be set
forth in, or calculable from, the Prospectus Supplement relating to the offered
Preferred Stock Warrants. After the close of business on the Preferred Stock
Warrant Expiration Date (or such later date to which such Preferred Stock
Warrant Expiration Date may be extended by the Company), unexercised Preferred
Stock Warrants will become void.
 
  Preferred Stock Warrants may be exercised by delivery to the Preferred Stock
Warrant Agent of payment as provided in the applicable Prospectus Supplement of
the amount required to purchase the shares of Preferred Stock purchasable upon
such exercise together with certain information set forth on the reverse side
of the Preferred Stock Warrant Certificate. Preferred Stock Warrants will be
deemed to have been exercised upon receipt of the exercise price, subject to
the receipt, within five business days, of the Preferred Stock Warrant
Certificate evidencing such Preferred Stock Warrants. Upon receipt of such
payment and the Preferred Stock Warrant Certificate properly completed and duly
executed at the corporate trust office of the Preferred Stock Warrant Agent or
any other office indicated in the applicable Prospectus Supplement, the Company
will, as soon as practicable, issue and deliver the shares of Preferred Stock
purchasable upon such exercise. If fewer than all of the Preferred Stock
Warrants represented by such Preferred Stock Warrant Certificate are exercised,
a new Preferred Stock Warrant Certificate will be issued for the remaining
number of Preferred Stock Warrants.
 
                                       32

 
MODIFICATIONS
 
  The Preferred Stock Warrant Agreement and the terms of the Preferred Stock
Warrants may be amended by the Company and the Preferred Stock Warrant Agent,
without the consent of the holders, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective or inconsistent provision
contained therein, or in any other manner which the Company may deem necessary
or desirable and which will not materially and adversely affect the interests
of the owners.
 
  The Company and the Preferred Stock Warrant Agent also may modify or amend
the Preferred Stock Warrant Agreement and the terms of the Preferred Stock
Warrants, with the consent of the holders of not less than a majority in number
of the then outstanding unexercised Preferred Stock Warrants affected, provided
that no such modification or amendment that shortens the period of time during
which the Preferred Stock Warrants may be exercised, increases the exercise
price of such Preferred Stock Warrants or otherwise materially and adversely
affects the exercise rights of the holders of the Preferred Stock Warrants or
reduces the number of outstanding Preferred Stock Warrants the consent of whose
holders is required for modification or amendment of the Preferred Stock
Warrant Agreement or the terms of the Preferred Stock Warrants may be made
without the consent of the holders affected thereby.
 
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
 
  If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Company, then the successor or assuming corporation shall succeed to and be
substituted for the Company in, and the Company will be relieved of any further
obligation under, the Preferred Stock Warrant Agreement or the Preferred Stock
Warrants.
 
                      DESCRIPTION OF COMMON STOCK WARRANTS
 
  The Company may issue Common Stock Warrants for the purchase of Common Stock.
Common Stock Warrants may be issued independently or together with other
Securities offered by any Prospectus Supplement and may be attached to or
separate from such Securities. Each series of Common Stock Warrants will be
issued under one or more warrant agreements (each a "Common Stock Warrant
Agreement") to be entered into between the Company and a bank or trust company,
as common stock warrant agent which will be designated in the applicable
Prospectus Supplement (the "Common Stock Warrant Agent"), all as set forth in
the Prospectus Supplement relating to the particular issue of Common Stock
Warrants. The Common Stock Warrant Agent will act solely as an agent of the
Company in connection with the Common Stock Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Common Stock Warrants. The following summaries of certain
provisions of the form of Common Stock Warrant Agreement and certificate
representing Common Stock Warrants (the "Common Stock Warrant Certificates") do
not purport to be complete and are subject to and are qualified in their
entirety by reference to, all the provisions of the Common Stock Warrant
Agreement and the Common Stock Warrant Certificate which Agreement and
Certificate will be filed as an exhibit to or incorporated by reference in the
Registration Statement which this Prospectus forms a part of.
 
GENERAL
 
  If Common Stock Warrants are offered, the related Prospectus Supplement will
describe the terms of such Common Stock Warrants, including the following,
where applicable: (1) the offering price; (2) the aggregate number of shares of
Common Stock purchasable upon exercise of such Common Stock Warrants and
minimum number of Common Stock Warrants that are exercisable; (3) the number of
shares of Common Stock with which such Common Stock Warrants are being offered
and the number of such Common Stock Warrants being offered with each such share
of Common Stock; (4) the date on and after which such Common Stock Warrants and
the related shares of Common Stock will be transferable separately; (5) the
number of
 
                                       33

 
shares of Common Stock purchasable upon exercise of each such Common Stock
Warrant and the price at which such number of shares of Common Stock may be
purchased upon such exercise; (6) the date on which the right to exercise such
Common Stock Warrants shall commence and the date on which such right shall
expire (the "Common Stock Warrant Expiration Date"); (7) whether the Common
Stock Warrants represented by the Common Stock Warrant Certificates will be
issued in registered or bearer form; (8) information with respect to book-entry
procedures, if any; and (9) any other terms of such Common Stock Warrants for
the purchase of shares of Common Stock which shall not be inconsistent with the
provisions of the Common Stock Warrant Agreements.
 
  Common Stock Warrant Certificates may be exchanged for new Common Stock
Warrant Certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Common Stock Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Common Stock
Warrants to purchase Common Stock, holders of such Common Stock Warrants will
not have any rights of holders of shares of the Common Stock purchasable upon
such exercise, including the right to receive payments of dividends, if any, on
the Common Stock purchasable upon such exercise or to exercise any applicable
right to vote.
 
  Prospective purchasers of Common Stock Warrants should be aware that special
U.S. Federal income tax, accounting and other considerations may be applicable
to instruments such as Common Stock Warrants. The Prospectus Supplement
relating to any issue of Common Stock Warrants will describe such
considerations.
 
EXERCISE OF COMMON STOCK WARRANTS
 
  Each Common Stock Warrant will entitle the holder thereof to purchase such
number of shares of Common Stock at such exercise price as shall be set forth
in, or calculable from, the Prospectus Supplement relating to the Common Stock
Warrants. After the close of business on the Common Stock Warrant Expiration
Date (or such later date to which such Common Stock Warrant Expiration Date may
be extended by the Company), unexercised Common Stock Warrants will become
void.
 
  Common Stock Warrants may be exercised by delivery to the Common Stock
Warrant Agent of payment as provided in the applicable Prospectus Supplement of
the amount required to purchase the shares of Common Stock purchasable upon
such exercise together with certain information set forth on the reverse side
of the Common Stock Warrant Certificate. Common Stock Warrants will be deemed
to have been exercised upon receipt of the exercise price, subject to the
receipt, within five business days, of the Common Stock Warrant Certificate
evidencing such Common Stock Warrants. Upon receipt of such payment and the
Common Stock Warrant Certificate properly completed and duly executed at the
corporate trust office of the Common Stock Warrant Agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon as
practicable, issue and deliver the shares of Common Stock purchasable upon such
exercise. If fewer than all of the Common Stock Warrants represented by such
Common Stock Warrant Certificate are exercised, a new Common Stock Warrant
Certificate will be issued for the remaining amount of Common Stock Warrants.
 
MODIFICATIONS
 
  The Common Stock Warrant Agreement and the terms of the Common Stock Warrants
may be amended by the Company and the Common Stock Warrant Agent, without the
consent of the holders, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective or inconsistent provision contained
therein, or in any other manner which the Company may deem necessary or
desirable and which will not materially and adversely affect the interests of
the owners.
 
  The Company and the Common Stock Warrant Agent also may modify or amend the
Common Stock Warrant Agreement and the terms of the Common Stock Warrants, with
the consent of the holders of not
 
                                       34

 
less than a majority in number of the then outstanding unexercised Common Stock
Warrants affected, provided that no such modification or amendment that
shortens the period of time during which the Common Stock Warrants may be
exercised, increases the exercise price of such Common Stock Warrants or
otherwise materially and adversely affects the exercise rights of the holders
of the Common Stock Warrants or reduces the number of outstanding Common Stock
Warrants the consent of whose holders is required for modification or amendment
of the Common Stock Warrant Agreement or the terms of the Common Stock Warrants
may be made without the consent of the holders affected thereby.
 
COMMON STOCK WARRANT ADJUSTMENTS
 
  Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by a Common
Stock Warrant, will be subject to adjustment in certain events, including: (i)
dividends (and other distributions) payable in the Common Stock on any class of
capital stock of the Company; (ii) subdivision, combinations and
reclassifications of Common Stock; (iii) the issuance to all holders of Common
Stock of certain rights or warrants entitling them to subscribe for or purchase
Common Stock, at less than the current market price (as defined in the Common
Stock Warrant Agreement for such series of Common Stock Warrants); and (iv) the
distribution to all holders of Common Stock of evidences of indebtedness or
assets of the Company (including securities, but excluding those dividends and
distributions referred to above and dividends and distributions paid in cash
out of surplus or retained earnings of the Company) or rights or warrants
(excluding those referred to above) of the Company, subject to the limitation
that all adjustments by reason of any of the foregoing need not be made until
they result in a cumulative change in the exercise price of at least 1%.
 
  In the event that the Company shall distribute or shall have distributed any
rights or warrants to acquire capital stock pursuant to clause (iv) of the
preceding paragraph ("Capital Stock Rights"), pursuant to which separate
certificates representing such Capital Stock Rights are distributed subsequent
to the initial distribution of such Capital Stock Rights (whether or not such
distribution shall have occurred prior to the date of the issuance of a series
of Common Stock Warrants), the subsequent distribution shall be deemed to be
the distribution of such Capital Stock Rights; provided, however, that the
Company may, in lieu of making any adjustment in the exercise price of, and the
number of shares of Common Stock covered by, a Common Stock Warrant upon a
distribution of separate certificates representing such Capital Stock Rights,
make proper provision so that each holder of such a Common Stock Warrant who
exercises such Common Stock Warrant (or any portion thereof) (a) on or before
the record date for such distribution of separate certificates shall be
entitled to receive upon such exercise shares of Common Stock issued with
Capital Stock Rights and (b) after such record date and prior to the
expiration, redemption or termination of such Capital Stock Rights shall be
entitled to receive upon such exercise, in addition to the shares of Common
Stock issuable upon such exercise, the same number of such Capital Stock Rights
as would a holder of the number of shares of Common Stock that such Common
Stock Warrant so exercised would have entitled the holder thereof to acquire in
accordance with the terms and provisions applicable to the Capital Stock Rights
if such Common Stock Warrant were exercised immediately prior to the record
date for such distribution. Common Stock owned by or held for the account of
the Company or any majority owned subsidiary shall not be deemed outstanding
for the purpose of any adjustment.
 
  In the event the Company shall effect any capital reorganization or
reclassification of its shares or shall consolidate, merge or engage in a
statutory share exchange with or into any other corporation (other than a
consolidation, merger or share exchange into which the Company is the surviving
corporation) or shall sell or transfer substantially all its assets to any
other corporation for a consideration consisting in whole or in part of equity
securities of such other corporation, the holders of the Common Stock Warrants
then outstanding will be entitled thereafter to exercise such Common Stock
Warrants to acquire the kind and amount of stock and other securities, cash or
property which they would have received in connection with such transaction had
such Common Stock Warrants been exercised immediately prior to such
transaction.
 
                                       35

 
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
 
  If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Company, then the successor or assuming corporation shall succeed to and be
substituted for the Company in, and the Company will be relieved of any further
obligation under, the Common Stock Warrant Agreement or the Common Stock
Warrants.
 
                   DESCRIPTION OF THE COMPANY'S COMMON STOCK
 
GENERAL
 
  The Company is authorized to issue 150,000,000 shares of Common Stock. As of
June 30, 1993, there were outstanding 83,217,811 shares of the Company's Common
Stock.
 
  Holders of the Company's Common Stock are entitled to receive dividends when,
as and if declared by the Board of Directors out of any funds legally available
therefor, and are entitled upon liquidation, after claims of creditors and
preferences of the Company's preferred stock and any other series of preferred
stock hereafter authorized, to receive pro rata the net assets of the Company.
 
  The holders of the Common Stock are entitled to one vote for each share held
and are vested with all of the voting power except as the Board of Directors of
the Company has provided with respect to the outstanding shares of the
Company's preferred stock or may provide, in the future, with respect to any
other series of preferred stock which it may hereafter authorize. Directors of
the Company are elected for a one-year term expiring upon the annual meeting of
stockholders of the Company. The shares of the Company's Common Stock do not
have cumulative voting rights.
 
  The holders of the Company's Common Stock do not have any preemptive rights
to subscribe for additional shares of capital stock of the Company. The holders
of Common Stock have no conversion rights, the Common Stock is not subject to
redemption by either the Company or a stockholder, and there is no restriction
on the purchase by the Company of shares of Common Stock except for certain
regulatory limits.
 
  The Company's Common Stock is listed on the New York, Chicago, Pacific and
London Stock Exchanges. First Chicago Trust Company of New York is the transfer
agent, registrar and dividend disbursing agent for the Common Stock.
 
PREFERRED SHARE PURCHASE RIGHTS
 
  On November 18, 1988, the Board of Directors declared a dividend to holders
of Common Stock of record on December 2, 1988 (the "Record Date") of one
preferred share purchase right (a "Right") for each outstanding share of Common
Stock for, and to be attached to, each share of Common Stock outstanding on the
Record Date. Each Right entitles the registered holder to purchase from the
Company one one-hundreth of a share of Series A Junior Participating Voting
Preferred Stock, without par value (the "Junior Preferred Shares"), of the
Company, at a price of $130 per one one-hundreth of a Junior Preferred Share,
subject to certain adjustments. As long as the Rights are attached to shares of
Common Stock as provided in the Rights Agreement referred to below, one
additional Right shall be issued with each share of Common Stock issued after
December 2, 1988.
 
  The Rights will expire on December 2, 1998, unless the expiration date is
extended or the Rights are redeemed earlier and will not be exercisable or
transferable separately from the shares of Common Stock until the "Distribution
Date" which will occur on the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 20% or more of the
outstanding Common Stock or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of 20% or
more of the outstanding Common Stock.
 
                                       36

 
  In the event the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets are sold,
each holder of a Right will have the right to receive, upon payment of the
Right's then current exercise price, common stock of the acquiring company
which has a market value of two times the exercise price of the Right. In the
event that any person becomes an Acquiring Person, each holder of a Right,
other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise
that number of shares of Common Stock (or under certain circumstances, Common
Stock-equivalent Junior Preferred Shares) having a market value of two times
the exercise price of the Rights.
 
  At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Stock and prior to the acquisition by such person or group of 50% or
more of the outstanding Common Stock, the Board of Directors may exchange the
Rights (other than Rights owned by such person or group which have become
void), in whole or in part, at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction (or under certain circumstances, Common Stock-equivalent
Junior Preferred Shares).
 
  At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Stock, the Board of Directors may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish.
 
  The purchase price payable, and the number of Junior Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Junior
Preferred Shares, (ii) upon the grant to holders of the Junior Preferred Shares
of certain rights or warrants to subscribe for or purchase Junior Preferred
Shares at a price, or securities convertible into Junior Preferred Shares with
a conversion price, less than the current market price of the Junior Preferred
Shares or (iii) upon the distribution to holders of the Junior Preferred Shares
of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable in
Junior Preferred Shares) or of subscription rights or warrants (other than
those referred to above).
 
  The number of outstanding Rights and the number of one-hundreths of a Junior
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
 
  The terms of the Rights may be amended by the Board of Directors without the
consent of the holders of the Rights, including an amendment to lower the
threshold for exercisability of the Rights from 20% to not less than the
greater of (i) any percentage greater than the largest percentage of the
outstanding Common Stock then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons and (ii) 10%, except
that from and after such time as any person becomes an Acquiring Person no such
amendment may adversely affect the interests of the holders of the Rights.
 
  The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the Board
of Directors since the Rights may be redeemed by the Company at the Redemption
Price prior to the time that a person or group has acquired beneficial
ownership of 20% or more of the Common Stock.
 
  The foregoing description of the Rights and the Junior Preferred Shares does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as amended, which is an exhibit to the Registration Statement
of which this Prospectus forms a part, and the Certificate of Designation,
Preferences and Rights for the Junior Preferred Shares.
 
                                       37

 
                              PLAN OF DISTRIBUTION
 
  The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities offered
therein.
 
  The Company may sell Securities directly, through agents designated from time
to time, through underwriting syndicates led by one or more managing
underwriters or through one or more underwriters acting alone. Each Prospectus
Supplement will set forth the terms of the Securities to which such Prospectus
Supplement relates, including the name or names of any underwriters or agents
with whom the Company has entered into arrangements with respect to the sale of
such Securities, the public offering or purchase price of such Securities and
the net proceeds to the Company from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any discounts and
commissions allowed or paid to dealers, if any, any commissions allowed or paid
to agents, and the securities exchange or exchanges, if any, on which such
Securities will be listed. Dealer trading may take place in certain of the
Securities, including Securities not listed on any securities exchange.
 
  Securities may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, or through
one or more underwriters acting alone. The underwriter or underwriters with
respect to each underwritten offering of Securities will be named in the
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth
on the cover page of such Prospectus Supplement. Unless otherwise set forth in
the applicable Prospectus Supplement, the obligations of the underwriters to
purchase the Securities will be subject to certain conditions precedent and
each of the underwriters with respect to a sale of Securities will be obligated
to purchase all of its Securities if any are purchased. Any initial public
offering price and any discounts or concession allowed or reallowed or paid to
dealers may be changed from time to time.
 
  Securities may be offered and sold by the Company through agents designated
by the Company from time to time. Any agent involved in the offer and sale of
any Securities will be named, and any commissions payable by the Company to
such agent will be set forth, in the Prospectus Supplement relating to such
offering. Unless otherwise indicated in such Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
 
  Offers to purchase Securities may be solicited directly by the Company and
sales thereof may be made by the Company directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The terms of any such sales
will be described in the Prospectus Supplement relating thereto.
 
  The Company may also issue contracts under which the counterparty may be
required to purchase Debt Securities, Preferred Stock, Depositary Shares or
Common Stock. Such contracts would be issued with Debt Securities, Preferred
Stock or Depositary Shares and/or Warrants in amounts, at prices and on terms
to be set in a Prospectus Supplement.
 
  The anticipated place and time of delivery of Securities will be set forth in
the applicable Prospectus Supplement.
 
  If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or agents to solicit offers by certain institutions to
purchase Securities from the Company pursuant to delayed delivery contracts
providing for payment and delivery at a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. Unless otherwise set forth in the applicable Prospectus
Supplement, the obligations of any purchaser under any such contract will not
be subject to any conditions except that (i) the
 
                                       38

 
purchase of the Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject, and (ii)
if the Securities are also being sold to underwriters acting as principals for
their own account, the underwriters shall have purchased such Securities not
sold for delayed delivery. The underwriters and such other persons will not
have any responsibility in respect of the validity or performance of such
contracts.
 
  Any underwriter or agent participating in the distribution of the Securities
may be deemed to be an underwriter, as that term is defined in the Securities
Act, of the Securities so offered and sold and any discounts or commissions
received by them from the Company and any profit realized by them on the sale
or resale of the Securities may be deemed to be underwriting discounts and
commissions under the Securities Act.
 
  Underwriters and agents may be entitled, under agreements entered into with
the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such underwriters or agents may be required to
make in respect thereof. Certain of any such underwriters and agents, including
their associates, may be customers of, engage in transactions with and perform
services for, the Company and its subsidiaries in the ordinary course of
business.
 
                                 LEGAL OPINIONS
 
  Certain legal matters relating to the Securities offered hereby will be
passed upon for the Company by its General Counsel and for any underwriters,
selling agents and certain other purchasers by Cravath, Swaine & Moore,
Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019. Cravath, Swaine &
Moore has represented and continues to represent the Company from time to time
in other matters.
 
                                    EXPERTS
 
  The financial statements incorporated by reference in the Annual Report on
Form 10-K of the Company for the year ended December 31, 1992, as amended by
the Company's Form 8 dated March 12, 1993, have been audited by Arthur Andersen
& Co., independent public accountants, as indicated in their report with
respect thereto, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
 
                                       39