-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, h6XcdYwOcEAqlCpsqoHLMA0hZbfcds3xRIq+NX8zENOBreL0uSwQWPpZQQvzgmUo TrJMpAp/Ky/JWn81L11cgA== 0000950144-94-000042.txt : 19940114 0000950144-94-000042.hdr.sgml : 19940114 ACCESSION NUMBER: 0000950144-94-000042 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WACHOVIA CORP/ NC CENTRAL INDEX KEY: 0000774203 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 561473727 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 33 SEC FILE NUMBER: 033-59206 FILM NUMBER: 94501276 BUSINESS ADDRESS: STREET 1: 301 N MAIN STREET CITY: WINSTON SALEM STATE: NC ZIP: 27150 BUSINESS PHONE: 9197705000 MAIL ADDRESS: STREET 1: 191 PEACHTREE ST NE CITY: ATLANTA STATE: GA ZIP: 30303 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WACHOVIA CORP DATE OF NAME CHANGE: 19910603 424B5 1 PROSPECTUS SUPPLEMENT-WACHOVIA 1 Filed Pursuant to Rule 424(b)(5) Registration Statement 33-59206 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED MARCH 19, 1993) $250,000,000 WACHOVIA CORPORATION 6 3/8% SUBORDINATED NOTES DUE 2009 --------------------- Interest on the Subordinated Notes offered hereby (the "Subordinated Notes") is payable semi-annually on February 1 and August 1 of each year, commencing August 1, 1994. The Subordinated Notes are not redeemable prior to maturity and will mature on February 1, 2009. The Subordinated Notes are subordinated to all present and future Senior Indebtedness of Wachovia Corporation (the "Corporation") and, under certain circumstances, to Additional Senior Obligations of the Corporation, as described in the accompanying Prospectus under "Description of Securities -- Subordination of Securities." Payment of principal of the Subordinated Notes may be accelerated only in the case of the bankruptcy of the Corporation. There is no right of acceleration in the case of a default in the payment of interest on the Subordinated Notes or in the performance of any covenant or agreement of the Corporation with respect to the Subordinated Notes. See "Description of Securities -- Events of Default; Limited Rights of Acceleration" in the accompanying Prospectus. The Subordinated Notes will be represented by one or more Book-Entry Securities registered in the name of the nominee of The Depository Trust Company, which will act as the Depositary. Interests in the Subordinated Notes represented by Book-Entry Securities will be shown on, and transfer thereof will be effected only through, records maintained by the Depositary and its direct and indirect participants. Except as described herein, Subordinated Notes in definitive form will not be issued. Settlement for the Subordinated Notes will be made in immediately available funds. The Subordinated Notes will trade in the Depositary's Same-Day Funds Settlement System until maturity and secondary market trading activity in the Subordinated Notes will settle in immediately available funds. All payments of principal and interest will be made by the Corporation in immediately available funds. See "Description of Subordinated Notes." --------------------- THE SUBORDINATED NOTES ARE UNSECURED OBLIGATIONS OF THE CORPORATION, ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE CORPORATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- PRICE TO UNDERWRITING PROCEEDS TO PUBLIC(1) DISCOUNT(2) CORPORATION(1)(3) - ---------------------------------------------------------------------------------------------------- Per Note...................................... 99.87% .75% 99.12% - ---------------------------------------------------------------------------------------------------- Total......................................... $249,675,000 $1,875,000 $247,800,000 - ---------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from January 19, 1994. (2) The Corporation has agreed to indemnify the several Underwriters against certain liabilities under the Securities Act of 1933. See "Underwriting". (3) Before deducting expenses payable by the Corporation estimated at $200,000. --------------------- The Subordinated Notes are offered by the several Underwriters, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of certain legal matters by counsel for the Underwriters and certain other conditions. The Underwriters reserve the right to withdraw, cancel or modify such offer and to reject orders in whole or in part. It is expected that delivery of the Subordinated Notes will be made through the book-entry facilities of the Depositary on or about January 19, 1994. --------------------- MERRILL LYNCH & CO. CS FIRST BOSTON GOLDMAN, SACHS & CO. KIDDER, PEABODY & CO. INCORPORATED LEHMAN BROTHERS --------------------- The date of this Prospectus Supplement is January 11, 1994. 2 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SUBORDINATED NOTES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OPEN MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. WACHOVIA CORPORATION Wachovia Corporation (the "Corporation") is a bank holding company organized in 1985 under the laws of the State of North Carolina. The Corporation is the 22nd largest bank holding company in the United States, based on total assets at June 30, 1993. At September 30, 1993, the Corporation had consolidated assets of $35.320 billion, consolidated loans net of unearned income of $22.066 billion, consolidated deposits of $22.187 billion and consolidated shareholders' equity of $2.975 billion. The Corporation's principal assets consist of all the outstanding common stock of Wachovia Bank of North Carolina, N.A., a national banking association organized under the laws of the United States, Wachovia Bank of Georgia, N.A., a national banking association organized under the laws of the United States, and South Carolina National Corporation, a bank and savings and loan holding company organized under the laws of South Carolina. Wachovia Bank of North Carolina, N.A. provides personal, commercial, trust and institutional banking services through 223 full-service banking offices in 96 North Carolina cities and communities. In addition, it has a foreign branch in Grand Cayman and an Edge Act subsidiary -- Wachovia International Banking Corporation, with branch offices in New York City, Charlotte, North Carolina and Atlanta, Georgia. At September 30, 1993, Wachovia Bank of North Carolina, N.A. had total assets of $19.994 billion and total deposits of $10.984 billion. Wachovia Bank of Georgia, N.A. provides personal, commercial, trust and institutional banking services with a network of 129 offices in 48 cities and communities in Georgia, and a foreign branch in Grand Cayman. At September 30, 1993, Wachovia Bank of Georgia, N.A. had total assets of $11.140 billion and total deposits of $6.634 billion. South Carolina National Corporation provides personal, commercial, trust and institutional banking services through its principal subsidiary, The South Carolina National Bank. The South Carolina National Bank has 157 offices in 70 South Carolina cities and communities and a foreign branch in the Cayman Islands. At September 30, 1993, The South Carolina National Bank had total assets of $6.388 billion and total deposits of $4.769 billion. The Corporation also has bank-related subsidiaries engaged in mortgage banking, discount brokerage and credit-related insurance. The Corporation has dual executive offices located at 301 North Main Street, Winston-Salem, North Carolina 27150 and 191 Peachtree Street, N.E., Atlanta, Georgia 30303, and its telephone numbers are (910) 770-5000 and (404) 332-5000, respectively. CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES The consolidated ratio of earnings to fixed charges of the Corporation for the nine months ended September 30, 1993 was 1.82 including interest on deposits and 3.51 excluding interests on deposits. S-2 3 DESCRIPTION OF SUBORDINATED NOTES The following description of the Subordinated Notes (referred to in the accompanying Prospectus as the "Securities") supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of the Securities set forth in the accompanying Prospectus, to which description reference is hereby made. Capitalized terms used and not defined herein have the meaning set forth in the accompanying Prospectus. GENERAL The Subordinated Notes will be limited to $250,000,000 aggregate principal amount and will mature on February 1, 2009. Interest on the Subordinated Notes will be payable at the rate per annum shown on the cover page of this Prospectus Supplement from January 19, 1994, or from the most recent Interest Payment Date to which interest has been paid or provided for, semiannually on February 1 and August 1 of each year, commencing on August 1, 1994, to the persons in whose names the Subordinated Notes are registered at the close of business on the January 15 and July 15, as the case may be, next preceding such Interest Payment Date. The Subordinated Notes are not redeemable prior to maturity. SUBORDINATION The Subordinated Notes will be direct, unsecured obligations of the Corporation and will be subordinate to all Senior Indebtedness of the Corporation and, under certain circumstances relating to the dissolution, winding-up, liquidation or reorganization of the Corporation, to all Additional Senior Obligations of the Corporation, as described in the accompanying Prospectus under the heading "Description of Securities -- Subordination of Securities." The Indenture does not limit or prohibit the incurrence of Senior Indebtedness or Additional Senior Obligations. As of September 30, 1993, the Corporation had outstanding approximately $7.0 million of Senior Indebtedness and no Additional Senior Obligations. BOOK-ENTRY SYSTEM The Subordinated Notes initially will be represented by one or more book-entry securities (the "Book-Entry Securities") deposited with The Depository Trust Company ("DTC") and registered in the name of a nominee of DTC. The term "Depositary" refers to DTC or any successor depositary. Except as set forth below, the Subordinated Notes will be available for purchase in denominations of $1,000 and integral multiples thereof in book-entry form only. Except in the limited circumstances as described under "Description of Securities -- Book-Entry Securities" in the Prospectus, owners of beneficial interests in the Book-Entry Securities will not be entitled to have Subordinated Notes represented by such Book-Entry Securities registered in their names, will not receive or be entitled to receive physical delivery of such Subordinated Notes in definitive form, and will not be considered the owners or holders thereof under the Indenture. DTC has advised the Corporation that it 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 Securities Exchange Act of 1934. DTC was created to hold securities of persons who have accounts with DTC ("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. DTC's participants include securities brokers and dealers (including the Underwriters), banks, trust companies, clearing corporations and certain other organizations, some of which (and/or their representatives) own DTC. Access to DTC'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. For additional information regarding the Book-Entry System see "Description of Securities -- Book-Entry Securities" in the Prospectus. S-3 4 SAME-DAY SETTLEMENT AND PAYMENT Settlement for the Subordinated Notes will be made in immediately available funds. All payments of principal and interest will be made by the Corporation in immediately available funds. The Subordinated Notes will trade in the Depositary's Same-Day Funds Settlement System until maturity, and therefore the Depositary will require secondary trading activity in the Subordinated Notes to be settled in immediately available funds. Secondary trading in long-term notes and debentures of corporate issuers is generally settled in clearing-house or next-day funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on trading activity in the Subordinated Notes. UNDERWRITING Subject to the terms and conditions set forth in an underwriting agreement (the "Underwriting Agreement") among the Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First Boston Corporation, Goldman, Sachs & Co., Kidder, Peabody & Co. Incorporated and Lehman Brothers Inc. (the "Underwriters"), the Corporation has agreed to sell to the Underwriters, and the Underwriters have severally agreed to purchase, the respective principal amounts of the Subordinated Notes set forth after their names below. In the Underwriting Agreement, the several Underwriters have agreed, subject to the terms and conditions set forth therein, to purchase all the Subordinated Notes offered hereby if any of the Subordinated Notes are purchased. In the event of default by an Underwriter, the Underwriting Agreement provides that, in certain circumstances, purchase commitments of the nondefaulting Underwriters may be increased or the Underwriting Agreement may be terminated.
PRINCIPAL UNDERWRITER AMOUNT ----------- ------------ Merrill Lynch, Pierce, Fenner & Smith Incorporated...................................................... $ 50,000,000 CS First Boston Corporation.................................................... 50,000,000 Goldman, Sachs & Co............................................................ 50,000,000 Kidder, Peabody & Co. Incorporated............................................. 50,000,000 Lehman Brothers Inc............................................................ 50,000,000 ------------ Total............................................................ $250,000,000 ------------ ------------
The Underwriters have advised the Corporation that they propose initially to offer the Subordinated Notes to the public at the public offering price set forth on the cover page of this Prospectus Supplement, and to certain dealers at such price less a concession not in excess of .45% of the principal amount of the Subordinated Notes. The Underwriters may allow, and such dealers may reallow, a discount not in excess of .25% of the principal amount of the Subordinated Notes to certain other dealers. After the initial public offering, the public offering price, concession and discount may be changed. The Underwriting Agreement provides that the Corporation will indemnify the Underwriters against certain civil liabilities, including liabilities under the Securities Act of 1933 or contribute to payments the Underwriters may be required to make in respect thereof. The Subordinated Notes will not be listed on any securities exchange. The Corporation has been advised by the Underwriters that the Underwriters currently intend to make a market in the Subordinated Notes, as permitted by applicable laws and regulations. The Underwriters are not obligated, however, to make a market in the Subordinated Notes and any such market-making may be discontinued at any time at the sole discretion of the Underwriters. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Subordinated Notes. The Underwriters and their respective affiliates may be customers of, engage in transactions with and perform services for the Corporation and its subsidiaries in the ordinary course of business. S-4 5 PROSPECTUS $500,000,000 WACHOVIA CORPORATION SUBORDINATED DEBT SECURITIES --------------------- Wachovia Corporation (the "Corporation") may offer from time to time up to $500,000,000 aggregate principal amount (or its equivalent based on the applicable exchange rate at the time of offering if denominated in foreign currencies) of its subordinated debt securities (the "Securities") on terms to be determined by market conditions at the time of sale. As used herein, the Securities shall include securities denominated in U.S. dollars or, if so specified in the applicable Prospectus Supplement, in any other currency, including composite currencies such as the European Currency Unit. The Securities may be sold directly by the Corporation to the public or 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. The specific aggregate principal amount, maturity, rate and time of payment of interest, if any, purchase price, any terms for redemption or other special terms relating to the Securities in respect of which this Prospectus is being delivered ("Offered Securities") are set forth in the accompanying Prospectus Supplement (the "Prospectus Supplement"), together with the terms of offering of the Offered Securities. The Securities will be unsecured and will be subordinate to Senior Indebtedness of the Corporation and, under certain circumstances, to Additional Senior Obligations of the Corporation, each as defined herein. Payment of principal of the Securities may be accelerated only in the case of the bankruptcy of the Corporation. There is no right of acceleration in the case of a default in the payment of the principal of, or any premium or interest on, the Securities or in the performance of any covenant or agreement of the Corporation. The Securities of a series may be issued in definitive registered form without coupons ("Registered Securities") or in the form of one or more book-entry securities in registered form ("Book-Entry Securities"). If any agent of the Corporation, or any underwriter, is involved in the sale of the Securities offered hereby, the name of such agent or underwriter and any applicable commissions or discounts are set forth in, or may be calculated from, the Prospectus Supplement, and the net proceeds to the Corporation from such sale will be the purchase price of such Securities less such commissions or discounts and the other attributable issuance and distribution expenses. See "Plan of Distribution" for possible indemnification arrangements for agents or underwriters. --------------------- THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. THE SECURITIES WILL BE UNSECURED OBLIGATIONS OF THE CORPORATION, WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE CORPORATION AND WILL NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- The date of this Prospectus is March 19, 1993. 6 AVAILABLE INFORMATION The Corporation is subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the Commission, at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's Regional Offices in New York (13th Floor, 7 World Trade Center, New York, New York 10048) and Chicago (Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661), and copies of such material can be obtained from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates. In addition, such material can be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. This Prospectus does not contain all the information set forth in the Registration Statement on Form S-3 of which this Prospectus is a part and the exhibits thereto which the Corporation has filed with the Commission under the Securities Act of 1933 (the "Securities Act") and to which reference is hereby made. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Corporation hereby incorporates by reference in this Prospectus the following reports filed with the Commission pursuant to Section 13 of the Exchange Act: (a) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1991; (b) the Corporation's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1992, June 30, 1992 and September 30, 1992; and (c) the Corporation's Current Reports on Form 8-K dated January 31, 1992, April 7, 1992, September 1, 1992, October 6, 1992 (as amended by the Corporation's Form 8 dated October 15, 1992), January 22, 1993, February 3, 1993 and March 5, 1993. All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Securities offered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document 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. THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO WACHOVIA CORPORATION, 301 NORTH MAIN STREET, WINSTON-SALEM, NORTH CAROLINA 27150, ATTENTION: GENERAL COUNSEL. TELEPHONE REQUESTS MAY BE DIRECTED TO (919) 770-5000. WACHOVIA CORPORATION Wachovia Corporation (the "Corporation") is a bank holding company organized in 1985 under the laws of the State of North Carolina. The Corporation is the 21st largest bank holding company in the United States, based on total assets at December 31, 1992. At December 31, 1992, the Corporation had consolidated assets of $33.367 billion, consolidated loans net of unearned income of $ 21.086 billion, consolidated deposits of $23.375 billion and consolidated shareholders' equity of $2.775 billion. The Corporation's principal assets consist of all the outstanding common stock of Wachovia Corporation of North Carolina, a bank holding company organized under the laws of North Carolina, Wachovia Corporation of Georgia, a bank holding company organized under the laws of Georgia, and South Carolina National Corporation, a bank and savings and loan holding company organized under the laws of South Carolina. 2 7 Wachovia Corporation of North Carolina's principal subsidiary, Wachovia Bank of North Carolina, N.A., provides personal, commercial, trust and institutional banking services through 222 full-service banking offices in 97 North Carolina cities and communities. In addition, it has a foreign branch in Grand Cayman and an Edge Act subsidiary - Wachovia International Banking Corporation, with branch offices in New York City, Charlotte, North Carolina and Atlanta, Georgia. At December 31, 1992, Wachovia Bank of North Carolina, N.A. had total assets of $17.995 billion and total deposits of $11.721 billion. Wachovia Corporation of Georgia provides a full range of banking services through its principal subsidiary, Wachovia Bank of Georgia, N.A., which has a network of 134 offices in 49 cities and communities in Georgia, and a foreign branch in Grand Cayman. At December 31, 1992, Wachovia Bank of Georgia, N.A. had total assets of $10.358 billion and total deposits of $6.630 billion. South Carolina National Corporation provides full-service banking through its principal subsidiary, The South Carolina National Bank. The South Carolina National Bank has 158 offices in 73 South Carolina cities and communities and a foreign branch in the Cayman Islands. At December 31, 1992, The South Carolina National Bank had total assets of $6.460 billion and total deposits of $5.133 billion. The Corporation also has bank-related subsidiaries engaged in mortgage banking, discount brokerage and credit-related insurance. The Corporation has dual executive offices located at 301 North Main Street, Winston-Salem, North Carolina 27150 and 191 Peachtree Street, N.E., Atlanta, Georgia 30303, and its telephone numbers are (919) 770-5000 and (404) 332-5000, respectively. CERTAIN REGULATORY CONSIDERATIONS GENERAL As a bank holding company, the Corporation is subject to the regulation and supervision of the Federal Reserve Board. The Corporation's subsidiary banks (the "Subsidiary Banks"), as national banking associations, are subject to supervision and examination by the Office of the Comptroller of the Currency (the "Comptroller") and the Federal Deposit Insurance Corporation (the "FDIC"). In addition, as a savings and loan holding company, the Corporation is registered with the Office of Thrift Supervision ("OTS") and is subject to OTS regulations, supervision and reporting requirements. The Corporation's subsidiary savings bank, Atlantic Savings Bank, F.S.B. ("Atlantic"), is also subject to supervision and examination by OTS. The Subsidiary Banks and Atlantic are also subject to various requirements and restrictions, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered. Various consumer laws and regulations also affect the operations of the Subsidiary Banks and Atlantic. In addition to the impact of regulation, commercial banks and savings banks are affected significantly by the actions of the Federal Reserve Board as it attempts to control the money supply and credit availability in order to influence the economy. PAYMENT OF DIVIDENDS AND OTHER RESTRICTIONS The Corporation is a legal entity separate and distinct from its subsidiaries, including the Subsidiary Banks and Atlantic. There are various legal and regulatory limitations on the extent to which the Corporation's subsidiaries, including its bank and bank holding company subsidiaries and its savings and loan holding company subsidiary, can finance or otherwise supply funds to the Corporation. The principal source of the Corporation's cash revenues is dividends from its subsidiaries and there are certain legal restrictions on the payment of dividends by such subsidiaries. The prior approval of the Comptroller is required if the total of all dividends declared by any national banking association in any calendar year exceeds the bank's net profits (as defined) for that year combined with its retained net profits for the preceding two calendar years, less any required transfers to surplus or a fund for the retirement of any preferred stock. In addition, a dividend may not be paid in excess of a bank's "undivided profits then on hand," 3 8 after deduction therefrom of losses in excess of the "allowance for loan and lease losses," as such terms are defined in the applicable regulations. The relevant regulatory agencies also have authority to prohibit a bank holding company, which would include Wachovia Corporation, Wachovia Corporation of North Carolina, Wachovia Corporation of Georgia and South Carolina National Corporation, or a national banking association from engaging in what, in the opinion of such regulatory body, constitutes an unsafe or unsound practice in conducting its business. The payment of dividends could, depending upon the financial condition of the subsidiary, be deemed to constitute such an unsafe or unsound practice. Under applicable law, as a savings bank, Atlantic must give the OTS 30 days prior notice of any proposed payment of dividends. Retained earnings of the Corporation's banking subsidiaries available for payment of cash dividends under all applicable regulations without obtaining governmental approval were approximately $221.0 million as of December 31, 1992. In addition, the Subsidiary Banks and their subsidiaries are subject to limitations under Section 23A of the Federal Reserve Act with respect to extensions of credit to, investments in, and certain other transactions with, the Corporation and its other subsidiaries. Furthermore, loans and extensions of credit are also subject to various collateral requirements. CAPITAL ADEQUACY In January 1989, the Federal Reserve Board adopted risk-based capital guidelines for bank holding companies. Commencing December 31, 1992, the minimum guidelines for the ratio of total capital ("Total Capital") to risk-weighted assets (including certain off-balance-sheet items, such as standby letters of credit) is 8%. At least half of the Total Capital is to be composed of common stock, minority interests in the equity accounts of unconsolidated subsidiaries, a limited amount of perpetual preferred stock, less goodwill ("Tier 1 Capital"). The remainder may consist of subordinated debt, other preferred stock and a limited amount of loan loss reserves. 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 1 Capital to average 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 guidelines also provide that bank holding companies experiencing internal growth or making acquisitions are 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 1 Capital Leverage Ratio" (deducting all intangibles) and other indicia of capital strength in evaluating proposals for expansion or new activities. The Federal Reserve Board has not advised the Corporation of any specific minimum Leverage Ratio applicable to it. Failure to meet capital guidelines 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." At December 31, 1992, the Corporation's Total Capital ratio was 12.32%, its Tier 1 Capital ratio was 9.83% and its Tier 1 Leverage Ratio was 8.44%. Each of these ratios substantially exceeds the current requirements under the Federal Reserve Board's capital guidelines. SUPPORT OF SUBSIDIARY BANKS Under Federal Reserve Board policy, the Corporation is expected to act as a source of financial strength to, and to commit resources to support, each of the Subsidiary Banks. This support may be required at times when, absent such Federal Reserve Board policy, the Corporation may not be inclined to provide it. In the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a priority of payment. 4 9 As a result of the enactment of Section 206 of the Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA") on August 9, 1989, 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 after August 9, 1989 in connection with (a) the default of a commonly controlled FDIC-insured depository institution or (b) any assistance provided by the FDIC to any commonly controlled FDIC-insured depository institution "in danger of default." "Default" is defined generally as the appointment of a conservator or receiver and "in danger of default" is defined generally as the existence of certain conditions indicating that a default is likely to occur in the absence of regulatory assistance. FDIC INSURANCE ASSESSMENTS The Subsidiary Banks are subject to FDIC deposit insurance assessments. The FDIC has set an assessment rate for the Bank Insurance Fund (the "BIF") of 0.23% of deposits per annum that became effective on July 1, 1991. It remains possible that the FDIC will impose a special additional assessment in the near future. A large increase or special assessment could have an adverse impact on the Corporation's results of operations. In addition, pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991 (the "FDICIA"), the FDIC is developing a proposed risk-based assessment system under which the assessment rate for an insured depository institution would vary according to the level of risk incurred in its activities. In a May 12, 1992 release, the FDIC proposed to base an institution's risk category upon whether the institution is well capitalized, adequately capitalized or less than adequately capitalized. On September 15, 1992, the FDIC voted to approve a range of deposit insurance assessments varying from 0.23% to 0.31% of deposits per annum, based upon the institution's level of capital and its supervisory rating effective on January 1, 1993. RECENT LEGISLATION On December 19, 1991, FDICIA was enacted. FDICIA substantially revised the depository institution regulatory and funding provisions of the Federal Deposit Insurance Act and made revisions to several other federal banking statutes. Pursuant to FDICIA, the Federal Reserve Board, the FDIC, the Comptroller and the OTS (collectively, the "Regulators") have adopted regulations, effective December 19, 1992, setting forth a five-tier scheme for measuring the capital adequacy of the financial institutions they supervise. Under the regulations (commonly referred to as the "prompt corrective action" rules), an institution would be placed in one of the following capital categories: (a) well capitalized (an institution that has a Total Capital ratio of at least 10%, a Tier 1 Capital ratio of at least 6% and a Tier 1 Leverage Ratio of at least 5%); (b) adequately capitalized (an institution that has a Total Capital ratio of at least 8%, a Tier 1 Capital ratio of at least 4% and a Tier 1 Leverage Ratio of at least 4%); (c) undercapitalized (an institution that has a Total Capital ratio of under 8%, a Tier 1 Capital ratio of under 4% or a Tier 1 Leverage Ratio of under 4%); (d) significantly undercapitalized (an institution that has a Total Capital ratio of under 6%, a Tier 1 Capital ratio of under 3% or a Tier 1 Leverage Ratio of under 3%); and (e) critically undercapitalized (an institution that has a Tier 1 Leverage Ratio of 2% or less). The regulations would permit the appropriate Federal banking regulator to downgrade an institution to the next lower category if the regulator determines (a) after notice and opportunity for hearing or response, that the institution is in an unsafe or unsound condition or (b) that the institution has received (and not corrected) a less-than-satisfactory rating for any of the categories of asset quality, management, earnings or liquidity in its most recent examination. Supervisory actions by the appropriate Federal banking regulator will depend upon an institution's classification within the five categories. FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. Undercapitalized depository institutions will be subject to restrictions on borrowing from the Federal Reserve System, effective December 19, 1993. In addition, undercapitalized depository institutions are subject to growth limitations and are required to submit capital restoration plans. A depository institution's holding company must guarantee the capital plan, up to an amount equal to the lesser of 5% of the depository institution's assets at the time it becomes undercapitalized or the amount of the capital 5 10 deficiency when the institution fails to comply with the plan. Federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution's capital. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. Significantly undercapitalized depository institutions 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 cessation of receipt of deposits from correspondent banks. Critically undercapitalized depository institutions are subject to appointment of a receiver or conservator. The FDIC has adopted or currently proposes to adopt other rules pursuant to FDICIA that include: (a) real estate lending standards for banks, which would provide guidelines concerning loan-to-value ratios for various types of real estate loans; (b) revision to the risk-based capital rules to account for interest rate risk, concentration of credit risk and the risks posed by "non-traditional activities;" (c) rules requiring depository institutions to develop and implement internal procedures to evaluate and control credit and settlement exposure to their correspondent banks; (d) a rule restricting the ability of depository institutions that are not well capitalized from accepting brokered deposits; (e) rules addressing various "safety and soundness" issues, including operations and managerial standards, standards for asset quality, earnings and stock valuations, and compensation standards for the officers, directors, employees and principal shareholders of the depository institution; and (f) rules mandating enhanced financial reporting and audit requirements. CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES The following unaudited table presents the consolidated ratio of earnings to fixed charges of the Corporation. The consolidated ratio of earnings to fixed charges has been computed by dividing net income plus all applicable income taxes plus fixed charges by fixed charges. Fixed charges represent all interest expense (ratios are presented both excluding and including interest on deposits) and the portion of net rental expense which is deemed to be representative of the interest factor of such expense. Interest expense (other than on deposits) includes interest on long-term debt, federal funds purchased and securities sold under agreements to repurchase, mortgages, commercial paper and other funds borrowed.
YEAR ENDED DECEMBER 31, ------------------------------------ 1992 1991 1990 1989 1988 ---- ---- ---- ---- ---- Including interest on deposits............................ 1.61 1.19 1.26 1.25 1.31 Excluding interest on deposits............................ 3.57 1.71 1.81 2.00 2.19
USE OF PROCEEDS The net proceeds from the sale of the Securities will be used for general corporate purposes, principally to fund investments in, or extensions of credit to, the Corporation's banking and nonbanking subsidiaries. The Corporation also may use such proceeds to allow its subsidiaries to repay borrowings incurred by such subsidiaries. Except as otherwise described in the Prospectus Supplement, specific allocations of the proceeds to such purposes will not have been made at the date of the Prospectus Supplement, although management of the Corporation will have determined that funds should be borrowed at that time in anticipation of future funding or capital requirements of its subsidiaries. The precise amount and timing of such investments in and extensions of credit to the subsidiaries will depend upon their funding requirements and the availability of other funds to the Corporation and its subsidiaries. In addition to the foregoing, the Corporation may also use a portion of the net proceeds to fund possible acquisitions if suitable opportunities develop in the future. Based upon the anticipated future financing requirements of the Corporation and its subsidiaries, the Corporation expects that it will, from time to time, engage in additional financings of a character and in amounts to be determined. 6 11 DESCRIPTION OF SECURITIES GENERAL The following sets forth certain general terms and provisions of the Securities offered hereby. The particular terms of the Securities offered by any Prospectus Supplement will be described in the Prospectus Supplement relating to such Offered Securities (the "Applicable Prospectus Supplement"). The Securities are to be issued under an Indenture dated as of March 1, 1993 (the "Indenture"), between the Corporation and CoreStates Bank, National Association, as trustee (the "Trustee"). A copy of the Indenture is an exhibit to the Registration Statement of which this Prospectus is a part. The following summaries of certain provisions of the Securities and the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Indenture, including the definitions therein of certain terms. Wherever particular Sections, Articles or defined terms of the Indenture are referred to, it is intended that such Sections, Articles or defined terms shall be incorporated herein by reference. Article and Section references used herein are references to the Indenture. Capitalized terms not otherwise defined in this Prospectus shall have the meanings given to them in the Indenture. The Securities will be unsecured and will be subordinated and junior to all Senior Indebtedness and, in certain circumstances relating to the dissolution, winding-up, liquidation or reorganization of the Corporation, to all Additional Senior Obligations (as defined below under "Subordination of Securities"). The Indenture does not contain covenants prohibiting the Corporation from disposing of voting stock of its subsidiaries, including the stock of any of its banking subsidiaries. Events of default as to which payment of the principal of the Securities may be accelerated are limited to events relating to the bankruptcy of the Corporation. See "Subordination of Securities" and "Events of Default; Limited Rights of Acceleration." The Indenture does not limit the amount of Securities that may be issued thereunder and provides that Securities may be issued thereunder from time to time in one or more series. (Section 301) The Securities will be unsecured subordinated obligations of the Corporation. Neither the Indenture nor the 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 Corporation or any of its subsidiaries. In addition, the Indenture and the Securities will not contain any provision that would provide protection to the Holders of the Securities against a sudden and dramatic decline in credit quality resulting from a takeover, recapitalization or similar restructuring of the Corporation or other event involving the Corporation that may adversely affect the credit quality of the Corporation. Because the Corporation is a holding company, its rights and the rights of its creditors, including the holders of the Securities, to participate in the assets of any subsidiary upon the liquidation or reorganization of such a subsidiary will be subject to the prior claims of such subsidiaries' creditors (including, in the case of a subsidiary bank, its depositors) except to the extent that the Corporation may itself be a creditor with recognized claims against the subsidiary. Claims on subsidiaries of the Corporation by creditors other than the Corporation include claims with respect to long-term debt and substantial obligations with respect to deposit liabilities, federal funds purchased, securities sold under repurchase agreements and other short-term borrowings. See "Wachovia Corporation." Unless otherwise indicated in the Applicable Prospectus Supplement, principal of and premium, if any, and interest on the Securities will be payable at the office or agency of the Trustee maintained for such purpose in Philadelphia, Pennsylvania and at any other office or agency maintained by the Corporation for such purpose, except that, at the option of the Corporation, interest may be paid by mailing a check to the address of the person entitled thereto as it appears on the Security Register. The transfer of Securities (other than Book-Entry Securities) will be registrable for each series of Securities at the corporate trust office of the Trustee in Philadelphia, Pennsylvania. (Sections 301, 305 and 1002) Interest on the Securities will be payable to the person in whose name the Securities are registered at the close of business on the Regular Record Date designated for an Interest Payment Date. (Section 307) The Securities will be issued only in fully registered form without coupons and, unless otherwise indicated in the Applicable Prospectus Supplement, in denominations of $1,000 or integral multiples thereof. (Section 302) No service charge will be required for any registration of transfer or exchange of the Securities, but the Corporation may require payment of a sum 7 12 sufficient to cover any tax or other governmental charge imposed in connection therewith other than certain exchanges not involving any transfer. (Section 305) The Applicable Prospectus Supplement will describe the following terms of the Offered Securities: (a) the title of the Offered Securities; (b) any limit on the aggregate principal amount of the Offered Securities; (c) the date or dates on which the Offered Securities will mature; (d) the rate or rates (which may be fixed or variable) per annum at which the Offered Securities will bear interest, if any, and the date or dates from which such interest, if any, will accrue and the dates on which such interest, if any, on the Offered Securities will be payable and the Regular Record Dates for such Interest Payment Dates; (e) the place or places, if any, in addition to Philadelphia, Pennsylvania, where the principal of and premium, if any, and interest on the Offered Securities will be payable; (f) the period or periods within which, the price or prices at which and the terms and conditions upon which the Offered Securities may be redeemed, in whole or in part, at the option of the Corporation; (g) the obligation, if any, of the Corporation to redeem or purchase the Offered Securities pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Offered Securities shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (h) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Offered Securities will be issuable; (i) the currency of payment of principal of and premium, if any, and interest on the Offered Securities if other than the currency of the United States of America; (j) any index used to determine the amount of payment of principal of, premium, if any, or interest on the Offered Securities; (k) if other than the principal amount thereof, the portion of the principal amount of the Offered Securities which will be payable upon the declaration of acceleration of the Maturity thereof; (l) the law which will govern the terms of the Securities, if other than the law of Pennsylvania; (m) information with respect to book-entry procedures, if any; and (n) any other terms of the Offered Securities. (Section 301) Securities may be issued as Original Issue Discount Securities to be offered and sold at a substantial discount below their stated principal amount. Federal income tax consequences and other special considerations applicable to any such Original Issue Discount Securities will be described in the Applicable Prospectus Supplement. "Original Issue Discount Security" means any security which provides for an amount less than the principal amount thereof to be due and payable upon the declaration of acceleration of the Maturity thereof upon the occurrence of an Event of Default and the continuation thereof. (Section 101) BOOK-ENTRY SECURITIES The Securities of a series may be issued in the form of one or more Book-Entry Securities that will be deposited with a Depositary or its nominee identified in the Applicable Prospectus Supplement. (Section 301) In such a case, one or more Book-Entry Securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal amount of Outstanding Securities of the series to be represented by such Book-Entry Security or Securities. Unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Book-Entry Security may not be transferred except as a whole by the Depositary for such Book-Entry Security to a nominee of such Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a nominee of such successor. (Section 305) The specific terms of the depositary arrangement with respect to any portion of a series of Securities to be represented by a Book-Entry Security will be described in the Applicable Prospectus Supplement. The Corporation anticipates that the following provisions will apply to all depositary arrangements. Upon the issuance of a Book-Entry Security, the Depositary for such Book-Entry Security or its nominee will credit, on its book-entry registration and transfer system, the respective principal amounts of the Securities represented by such Book-Entry Security to the accounts of persons that have accounts with such Depositary ("participants"). Such accounts shall be designated by the underwriters or agents with respect to such Securities or by the Corporation if such Securities are offered and sold directly by the Corporation. Participants include securities brokers and dealers, banks and trust companies, clearing corporations and certain other organizations. Access to the Depositary's system is also available to others, such as banks, 8 13 brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly ("indirect participants"). Persons who are not participants may beneficially own Book-Entry Securities held by the Depositary only through participants or indirect participants. Ownership of beneficial interests in any Book-Entry Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary or its nominee (with respect to interests of participants) for such Book-Entry Security and on the records of participants (with respect to interests of indirect participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws, as well as the limits on participation in the Depositary's book-entry system, may impair the ability to transfer beneficial interests in a Book-Entry Security. So long as the Depositary or its nominee is the registered owner of a Book-Entry Security, such Depositary or such nominee will be considered the sole owner or holder of the Securities represented by such Book-Entry Security for all purposes under the Indenture. Except as provided below, owners of beneficial interests in Securities represented by Book-Entry Securities will not be entitled to have Securities of the series represented by such Book-Entry Security registered in their names, will not receive or be entitled to receive physical delivery of such Securities in definitive form, and will not be considered the owners or holders thereof under the Indenture. Payments of principal of and any premium and interest on Securities registered in the name of the Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of the Book-Entry Security representing such Securities. The Corporation expects that the Depositary for a series of Securities or its nominee, upon receipt of any payment of principal, premium or interest, will credit immediately participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Book-Entry Security for such Securities, as shown on the records of such Depositary or its nominee. The Corporation also expects that payments by participants and indirect participants to owners of beneficial interests in such Book-Entry Security held through such persons will be governed by standing instructions and customary practices, as is now the case with securities registered in "street name," and will be the responsibility of such participants and indirect participants. Neither the Corporation, the Trustee, any Authenticating Agent, any Paying Agent nor the Security Registrar for such Securities will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Book-Entry Security for such Securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. (Section 311) If the Depositary for Securities of a series notifies the Corporation that it is unwilling or unable to continue as Depositary or if at any time the Depositary ceases to be a clearing agency registered under the Exchange Act, the Corporation has agreed to appoint a successor depositary. If such a successor is not appointed by the Corporation with 90 days, the Corporation will issue Securities of such series in definitive registered form in exchange for the Book-Entry Security representing such series of Securities. In addition, the Corporation may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more Book-Entry Securities shall no longer be represented by such Book-Entry Security or Securities and, in such event, will issue Securities of such series in definitive registered form in exchange for such Book-Entry Security or Securities representing such series of Securities. Further, if the Corporation so specifies with respect to the Securities of a series, or if an Event of Default, or an event which with notice, lapse of time or both would be an Event of Default with respect to the Securities of such series has occurred and is continuing, an owner of a beneficial interest in a Book-Entry Security representing Securities of such series may receive Securities of such series in definitive registered form. In any such instance, an owner of a beneficial interest in a Book-Entry Security will be entitled to physical delivery in definitive registered form of Securities of the series represented by such Book-Entry Security equal in principal amount to such beneficial interest and to have such Securities registered in its name. (Section 305) Securities so issued in definitive form will be issued in denominations of $1,000 and integral multiples thereof and will be issued in registered form only, without coupons. 9 14 SUBORDINATION OF SECURITIES The obligations of the Corporation to make any payment on account of the principal of and premium, if any, and interest on the Securities will be subordinate and junior in right of payment to all Senior Indebtedness of the Corporation and, in certain circumstances relating to the dissolution, winding-up, liquidation or reorganization of the Corporation, to all Additional Senior Obligations. (Article Thirteen) "Senior Indebtedness" is defined in the Indenture to mean (a) all indebtedness of the Corporation for money borrowed, whether now outstanding or subsequently created, assumed or incurred, other than (i) the Securities, (ii) the Corporation's 7% Subordinated Notes due 1999, (iii) any obligation Ranking on a Parity with the Securities, or (iv) any obligation Ranking Junior to the Securities and (b) any deferrals, renewals or extensions of any such Senior Indebtedness. The term "indebtedness of the Corporation for money borrowed" shall mean any obligation of, or any obligation guaranteed by, the Corporation for repayment of money borrowed, whether or not evidenced by bonds, debentures, notes or other written instruments, and any deferred obligations for payment of the purchase price of property or assets acquired other than in the ordinary course of business. "Additional Senior Obligations" is defined in the Indenture to mean all indebtedness of the Corporation, whether now outstanding or subsequently created, assumed or incurred, for claims in respect of derivative products such as interest and foreign exchange rate contracts, commodity contracts and similar arrangements; provided, however, that Additional Senior Obligations do not include (a) any claims in respect of Senior Indebtedness, or (b) any obligations (i) Ranking Junior to the Securities, or (ii) Ranking on a Parity with the Securities. For purposes of this definition, "claims" shall have the meaning assigned thereto in Section 101(4) of the United States Bankruptcy Code of 1978. Section 101 of the Indenture does not limit or prohibit the incurrence of Senior Indebtedness or Additional Senior Obligations. The term "Ranking Junior to the Securities" is defined in the Indenture to mean any obligation of the Corporation which (a) ranks junior to and not equally with or prior to the Securities in right of payment upon the happening of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Corporation as a whole, whether voluntary or involuntary, and (b) is specifically designated as ranking junior to the Securities by express provisions in the instrument creating or evidencing such obligation. The term "Ranking on a Parity with the Securities" is defined in the Indenture to mean any obligation of the Corporation which (a) ranks equally with and not prior to the Securities in right of payment upon the happening of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Corporation as a whole, whether voluntary or involuntary, and (b) is specifically designated as ranking on a parity with the Securities by express provision in the instrument creating or evidencing such obligation. (Section 101) The Securities will be subordinate in right of payment to all Senior Indebtedness, as provided in the Indenture. No payment on account of the principal of and premium, if any, or interest in respect of the Securities may be made if there shall have occurred and be continuing a default in payment with respect to Senior Indebtedness or an event of default with respect to any Senior Indebtedness resulting in the acceleration of the maturity thereof. Upon any payment or distribution of assets to creditors upon any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Corporation as a whole, whether voluntary or involuntary, (a) the holders of all Senior Indebtedness will first be entitled to receive payment in full before the Holders of the Securities will be entitled to receive any payment in respect of the principal of and premium, if any, or interest on the Securities, and (b) if after giving effect to the operation of clause (a) above, (i) any amount of cash, property or securities remains available for payment or distribution in respect of the Securities ("Excess Proceeds"), and (ii) creditors in respect of Additional Senior Obligations have not received payment in full of amounts due or to become due thereon or payment of such amounts has not been duly provided for, then such Excess Proceeds shall first be applied to pay or provide for the payment in full of all such Additional Senior Obligations before any payment may be made on the Securities. If the Holders of Securities receive payment and are aware at the time of receiving payment that all Senior Indebtedness and Additional Senior Obligations have not been paid in full, then such payment shall be held in 10 15 trust for the benefit of the holders of Senior Indebtedness and/or Additional Senior Obligations, as the case may be. (Section 1301) By reason of such subordination, in the event of insolvency, Holders of the Securities may recover less, ratably, than holders of Senior Indebtedness and holders of Additional Senior Obligations. Neither the Securities nor the 7% Subordinated Notes due 1999 of the Corporation in the aggregate principal amount of $300 million (the "7% Subordinated Notes") are by their terms subordinate or senior to the other. However, the 7% Subordinated Notes by their terms are subordinated to Senior Indebtedness and Additional Senior Obligations and to all other obligations of the Corporation to its creditors (subject to certain exceptions specified in the Indenture pursuant to which the 7% Subordinated Notes are outstanding). As a result of the differences between the subordination provisions applicable to the Securities and the 7% Subordinated Notes, in the event of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Corporation, the Holders of the Securities may receive more, ratably, than the holders of the 7% Subordinated Notes. EVENTS OF DEFAULT; LIMITED RIGHTS OF ACCELERATION The Indenture (with respect to any series of Securities) defines an "Event of Default" as any one of the following events (whatever the reason and whether it be occasioned by the subordination provisions or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) failure to pay any interest on any Security of that series when due and payable, continued for 30 days, whether or not such payment is prohibited by the subordination provisions of the Indenture; (b) failure to pay principal of or any premium on any Security of that series when due; (c) failure to deposit any sinking fund payment, when due, in respect of any Security of that series, whether or not such payment is prohibited by the subordination provisions of the Indenture; (d) failure to perform any other covenants or warranties of the Corporation in the Indenture (other than a covenant included in the Indenture solely for the benefit of a series of Securities thereunder other than that series) continued for 60 days after written notice as provided in the Indenture; (e) the entry of a decree or order for relief in respect of the Corporation by a court having jurisdiction in the premises in an involuntary case under Federal or state bankruptcy laws and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; (f) the commencement by the Corporation of a voluntary case under Federal or state bankruptcy laws or the consent by the Corporation to the entry of a decree or order for relief in an involuntary case under any such law; and (g) any other Event of Default provided with respect to Securities of that series. (Section 501) Unless specifically stated in the Applicable Prospectus Supplement for a particular series of Securities, the payment of the principal of the Securities may be accelerated only upon the occurrence of an Event of Default described in clause (e) or clause (f) of the preceding paragraph (a "Bankruptcy Event of Default") and there is no right of acceleration of the payment of principal of the Securities of such series upon a default in the payment of principal, premium, if any, or interest, if any, or in the performance of any covenant or agreement in the Securities or Indenture. In the event of a default in the payment of principal, premium, if any, or interest, if any, or the performance of any covenant or agreement in the Securities or Indenture, the Trustee, subject to certain limitations and conditions, may institute judicial proceedings to enforce payment of such principal, premium, if any, or interest, if any, or to obtain the performance of such covenant or agreement or any other proper remedy. (Section 503) Under certain circumstances, the Trustee may withhold notice to the Holders of the Securities in a default if the Trustee in good faith determines that the withholding of such notice is in the best interest of such Holders, and the Trustee shall withhold such notice for certain defaults for a period of 30 days. (Section 602) If a Bankruptcy Event of Default with respect to the Securities of any series at the time Outstanding occurs and is continuing, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series may declare the principal amount (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms thereof) of all the Securities of that series to be due and payable immediately. At any time after a declaration of acceleration with respect to Securities of any series has been made, but before a judgment or decree based 11 16 on acceleration has been obtained, the Holders of a majority in aggregate principal amount of Outstanding Securities of that series may, under certain circumstances, rescind and annul such acceleration. (Section 502) Reference is made to the Prospectus Supplement relating to any series of Offered Securities that are Original Issue Discount Securities for the particular provisions relating to acceleration of the Stated Maturity of a portion of the principal amount of such series of Original Issue Discount Securities upon the occurrence of an Event of Default and the continuation thereof. The Indenture provides that, subject to the duty of the Trustee during default to act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable security or indemnity. (Section 603) Subject to such provisions for the indemnification of the Trustee and to certain other conditions, the Holders of a majority in aggregate principal amount of the Outstanding Securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of that series. (Section 512) No Holder of any series of Securities will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee or for any remedy thereunder, unless such Holder shall have previously given to the Trustee under the Indenture written notice of a continuing Event of Default and unless the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series shall have made written request, and offered reasonable indemnity, to such Trustee to institute such proceeding as trustee, and such Trustee shall not have received from the Holders of a majority in aggregate principal amount of the Outstanding Securities of that series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days. (Section 507) However, such limitations do not apply to a suit instituted by a Holder of a Security for enforcement of payment of the principal of and premium, if any, or interest on such Security on or after the respective due dates expressed in such Security. (Section 508) The Corporation is required to furnish to the Trustee annually a statement as to the performance by the Corporation of certain of its obligations under the Indenture and as to any default in such performance. (Section 1006) MODIFICATION AND WAIVER Modification and amendment of the Indenture may be made by the Corporation and the Trustee under the Indenture with the consent of the Holders of not less than a 66-2/3% in aggregate principal amount of the Outstanding Securities of each series issued under the Indenture and affected by the modification or amendment; provided, however, that no such modification or amendment may, without the consent of the Holders of each Outstanding Security of the series affected thereby (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security of such series; (b) reduce the principal amount of or premium, if any, or interest on, any Security of any series (including in the case of an Original Issue Discount Security the amount payable upon acceleration of the maturity thereof); (c) change the place or currency of payment of principal of or the premium, if any, or interest on any Security of such series; (d) impair the right to institute suit for the enforcement of any payment on any Security of such series on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); (e) modify the subordination provision in a manner adverse to the Holders of the Securities of such series; or (f) reduce the percentage in principal amount of Outstanding Securities of any series, the consent of whose Holders is required for modification or amendment of the Indenture or for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults. (Section 902) The Holders of at least a 66-2/3% in aggregate principal amount of the Outstanding Securities of any series may, on behalf of all Holders of that series of Securities, waive compliance by the Corporation with certain restrictive provisions of the Indenture. (Section 1007) The Holders of a majority in aggregate principal amount of the Outstanding Securities of any series may, on behalf of all Holders of that series of Securities, 12 17 waive any past default under the Indenture, except a default in the payment of principal, premium, if any, or interest and in respect of certain covenants. (Section 513) CONSOLIDATION, MERGER AND SALE OF ASSETS The Corporation may not consolidate with or merge into any other corporation or transfer or sell, convey, exchange, transfer or lease its properties and assets substantially as an entirety to any Person, unless (a) any successor or purchaser is a corporation organized under the laws of any domestic jurisdiction; (b) any such successor or purchaser expressly assumes the Corporation's obligations on such Securities and under the Indenture; (c) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (d) certain other conditions are met. (Section 801) ASSUMPTION BY SUBSIDIARY A Subsidiary may assume the Corporation's obligations under the Indenture (including the Corporation's obligation to pay principal of and premium, if any, and interest on the Securities, but excluding the Corporation's obligation to comply with certain covenants provided that (a) such Subsidiary expressly assumes the Corporation's obligations under the Indenture; (b) the Corporation guarantees such Subsidiary's obligations; (c) such Subsidiary agrees to indemnify each Holder against certain taxes and expenses relating to, or incurred directly in connection with, such assumption; (d) immediately after giving effect to the assumption, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event of Default, shall have occurred and be continuing; (e) certain Opinions of Counsel and Officers' Certificates are delivered to the Trustee; and (f) certain other obligations are met. (Section 803) THE TRUSTEE CoreStates Bank, National Association is the Trustee under the Indenture. CoreStates Bank, National Association maintains a deposit account and conducts other banking transactions with the Corporation and its subsidiaries in the ordinary course of business and serves as trustee under the indenture pursuant to which the 7% Subordinated Notes are outstanding. The Indenture provides for the indemnification of the Trustee by the Corporation under certain circumstances. PLAN OF DISTRIBUTION The Corporation may offer and sell Securities to or through underwriters, acting as principals for their own accounts or as agents, and also may offer and sell Securities directly to other purchasers. Any underwriters or agents in connection with Offered Securities will be named in the related Prospectus Supplement and any underwriting compensation paid to such underwriters or agents will be set forth therein. Such underwriters may include a single firm or may be a group of underwriters represented by such firm. Unless otherwise indicated in the Prospectus Supplement, any underwriters will be required to purchase all of the Offered Securities if any are purchased. The distribution of Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. In connection with the sale of Securities, underwriters may receive compensation from the Corporation and from purchasers of Securities for whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters, dealers and agents that participate in the distribution of Securities may be deemed to be underwriters and any discounts or commissions received by them and any profit on the resale of Securities by them may be deemed to be underwriting discounts and commissions under the Securities Act. Under agreements which may be entered into with the Corporation, underwriters, dealers and agents who participate in the distribution of the Offered Securities may be entitled to indemnification by the Corporation against certain liabilities, including liabilities under the Securities Act, or contribution with respect to 13 18 payments which the underwriters, dealers or agents may be required to make in respect thereof. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for the Corporation and its subsidiaries in the ordinary course of business. If so indicated in the Prospectus Supplement, the Corporation will authorize dealers or other persons acting as the Corporation's agents to solicit offers by certain institutions to purchase Offered Securities from the Corporation pursuant to delayed delivery contracts ("Contracts") providing for payment and delivery on a future date or dates stated in the Prospectus Supplement. Each Contract will be for an amount not less than, and the aggregate amount of Offered Securities sold pursuant to Contracts shall not be less than nor more than, the respective amounts stated in the Prospectus Supplement. Institutions with which 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 Corporation. The obligations of any purchaser under any Contract will not be subject to any conditions except that (a) the purchase of the Offered Securities shall not at the time of delivery be prohibited under the laws of any jurisdiction to which such purchaser is subject, and (b) if the Offered Securities are also being sold to underwriters, the Corporation will have sold to such underwriters the Offered Securities not sold for delayed delivery. The dealers and such other persons acting as agents of the Corporation will not have any responsibility in respect of the validity or performance of Contracts. EXPERTS The consolidated financial statements of Wachovia Corporation and subsidiaries for the year ended December 31, 1992, included in Wachovia Corporation's Current Report on Form 8-K, dated March 5, 1993, and for the year ended December 31, 1991, incorporated by reference in Wachovia Corporation's Annual Report on Form 10-K for the year ended December 31, 1991, have been audited by Ernst & Young, independent auditors, and, insofar as they relate to South Carolina National Corporation for the years ended December 31, 1991, 1990 and 1989, by Price Waterhouse, independent accountants, as set forth in their reports thereon included therein and incorporated herein by reference. The financial statements referred to above are incorporated herein by reference in reliance upon such reports given upon the authority of such firms as experts in accounting and auditing. LEGAL MATTERS The validity of the Offered Securities will be passed upon for the Corporation by Alice Washington Grogan, Counsel of the Corporation, and for any underwriters or agents by King & Spalding, Atlanta, Georgia. As to matters of Pennsylvania law, Ms. Grogan and King & Spalding will rely on the opinion of Drinker Biddle & Reath, Philadelphia, Pennsylvania. From time to time, King & Spalding has provided and may in the future provide legal services to the Corporation and its subsidiaries. 14 19 - ------------------------------------------------------ - ------------------------------------------------------ NO DEALER, SALESPERSON, OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. --------------------- TABLE OF CONTENTS
PAGE ---- PROSPECTUS SUPPLEMENT Wachovia Corporation................... S-2 Consolidated Ratio of Earnings to Fixed Charges.............................. S-2 Description of Subordinated Notes...... S-3 Underwriting........................... S-4 PROSPECTUS Available Information.................. 2 Incorporation of Certain Documents by Reference............................ 2 Wachovia Corporation................... 2 Certain Regulatory Considerations...... 3 Consolidated Ratio of Earnings to Fixed Charges.............................. 6 Use of Proceeds........................ 6 Description of Securities.............. 7 Plan of Distribution................... 13 Experts................................ 14 Legal Matters.......................... 14
- ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ $250,000,000 WACHOVIA CORPORATION 6 3/8% SUBORDINATED NOTES DUE 2009 --------------------------- PROSPECTUS SUPPLEMENT --------------------------- MERRILL LYNCH & CO. CS FIRST BOSTON GOLDMAN, SACHS & CO. KIDDER, PEABODY & CO. INCORPORATED LEHMAN BROTHERS JANUARY 11, 1994 - ------------------------------------------------------ - ------------------------------------------------------ -----END PRIVACY-ENHANCED MESSAGE-----