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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 29, 1997
REGISTRATION NO.As filed with the Securities and Exchange Commission on October 5, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
PNC BANK CORP. PNC FUNDING CORP
(Exact name of registrants as specified in their charters)
PENNSYLVANIA PENNSYLVANIA
(State or other jurisdiction of incorporation or (State or other jurisdiction of incorporation or
organization) organization)
25-1435979 25-1234372
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
249 FIFTH AVENUE 1600 MARKET STREET
PITTSBURGH, PENNSYLVANIA 15222 PHILADELPHIA, PENNSYLVANIA 19101
(412) 762-1553 (215) 585-5000
(Address, including zip code, and telephone number, (Address,Address, including zip code, and telephone number,
including area code, of registrant's principal executive including area code, of registrant's principal executive
executive offices) offices)
------------------------
ROBERT L. HAUNSCHILD
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
PNC BANK CORP.
249 FIFTH AVENUE
PITTSBURGH, PA 15222
(412) 762-5770
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
CATHERINE COLLINS MCCOY,STEVEN KAPLAN, ESQ.
ARNOLD & PORTER
555 TWELFTH STREET, N.W.
WASHINGTON, D.C. 20004
(202)942-5055
------------------------ 942-5998
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as the
Registrants may determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than Securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
----------------
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AGGREGATE PRICE AGGREGATE AMOUNTOFFERING
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1)
REGISTRATION FEE
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Debt Securities--toSecurities -- to be issued by PNC Funding
Corp
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Common Stock--toStock -- to be issued by PNC Bank $1,500,000,000(3) 100% $1,500,000,000
Corp.(2)
$1,300,000,000(3) 100% $1,300,000,000 $393,939.40
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Preferred Stock--toStock -- to be issued by PNC Bank
Corp.
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Guarantees--constituting---------------------------------------------------------------------------------------------------------------
Guarantees -- constituting guarantees of the $1,500,000,000(3) (4) (4)
Debt Securities by PNC Bank Corp.
$1,300,000,000(3) (4) (4) None
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Depositary Shares--toShares -- to be issued by PNC Bank Corp. (5) (4) (4)
NoneCorp.
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Common Stock--toStock -- to be issued by PNC Bank Corp. (6) (4) (4)
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- ------------------------------------------------ --------------------
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AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTRATION FEE
- ------------------------------------------------ --------------------
Debt Securities -- to be issued by PNC Funding
Corp
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Common Stock -- to be issued by PNC Bank $417,000
Corp.(2)
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Preferred Stock -- to be issued by PNC Bank
Corp.
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Guarantees -- constituting guarantees of the None
==================================================================================================================================Debt Securities by PNC Bank Corp.
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Depositary Shares -- to be issued by PNC Bank None
Corp.
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Common Stock -- to be issued by PNC Bank Corp. None
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(1) This amount is estimated solely for the purpose of calculating the
registration fee. The proposed maximum offering price per unit will be
determined from time to time in connection with the issuance of securities
registered hereunder.
(2) The aggregate amount of Common Stockcommon stock registered hereunder will be limited to
that which is permissible under Rule 415(a)(4) under the Securities Act of
1933.
(3) There is being registered hereunder such Debt Securitiesdebt securities and such number of
shares of Common Stockcommon stock and Preferred Stockpreferred stock as will result in aggregate
proceeds of $1,300,000,000;$1,500,000,000; or, if any Debt Securitiesdebt securities are issued at an
original issue discount, such greater amount as shall result in net proceeds
of $1,300,000,000$1,500,000,000 to PNC Funding Corp.
(4) No separate consideration will be received.
(5) There are being registered hereunder such indeterminate number of Depositary
Sharesdepositary
shares to be evidenced by Depositary Receiptsdepositary receipts issued pursuant to a Deposit
Agreement.deposit
agreement. In the event that the Registrant elects to offer to the public
fractional interests of the Preferred Stockpreferred stock registered hereunder, Depositary
Receiptsdepositary
receipts will be distributed to those persons purchasing such fractional
interests and the underlying Preferred Stockpreferred stock will be issued to the
Depositarydepositary under the Deposit Agreement.deposit agreement.
(6) There are also being registered hereunder shares of Common Stock,common stock, the number
of which has not been determined, issuable upon conversion of the Preferred
Stockpreferred
stock registered hereunder, to the extent any of such Preferred Stockpreferred stock is by
its terms convertible into Common Stock.common stock.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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THE INFORMATION CONTAINED HEREININ THIS PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT. ANOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMESCOMMISSION IS EFFECTIVE. THIS PROSPECTUS SHALLIS NOT CONSTITUTE AN OFFER
TO SELL OR
THE SOLICITATION OFTHESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCHWHERE THE OFFER SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.IS NOT PERMITTED.
PROSPECTUS
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 29, 1997
PROSPECTUSOCTOBER 5, 1999
[PNC BANK LOGO]
$1,500,000,000
PNC BANK CORP.
COMMON STOCK, PREFERRED STOCK, GUARANTEES AND DEPOSITARY SHARES
PNC FUNDING CORP
DEBT SECURITIES
PNC BANK LOGO
PNC BANK CORP.
UNCONDITIONAL GUARANTEE OF PNC FUNDING CORP DEBT SECURITIES
AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
COMMON STOCK ($5.00 PAR VALUE)
PREFERRED STOCK ($1.00 PAR VALUE)
PNC Funding Corp ("PNC Funding") from time to time------------------------
We may offer, its unsecuredin one or more offerings, debt securities, consisting of debentures, notes and/or other unsecured evidences
of indebtedness (the "Debt Securities") and PNC Bank Corp. ("PNC" or the
"Corporation") from time to time may offer shares of its common stock,
$5.00 par
value per share ("Common Stock"), either originally issued or treasury shares,
and shares of its preferred stock, $1.00 par value per share ("Preferred
Stock"), up toguarantees and depositary shares having an amount resulting in combined net proceeds to PNC Funding and
PNC of $1,300,000,000. The Debt Securities may be either senior (the "Senior
Debt Securities") or subordinated in priority of payment (the "Subordinated Debt
Securities"). All such Senior Debt Securities and Subordinated Debt Securities
will be unconditionally guaranteed on a senior or subordinated basis,
respectively, as to payment of principal, premium, if any, and interest (the
"Guarantees") by PNC. The Debt Securities, the Common Stock and the Preferred
Stock (collectively, the "Securities") may be offered separately or together, in
separate series in amounts, at prices and on terms to be set forth in
supplements to this Prospectus (a "Prospectus Supplement"), which will be
delivered together with this Prospectus at the time of the particular Securities
offering.
The Debt Securities, the Common Stock and the Preferred Stock may be offered
and sold to or through underwriters or dealers, directly to other purchasers or
through agents. Underwritten offerings of the Securities may involve
underwriting syndicates represented by managing underwriters, or underwriters
without a syndicate. See "Plan of Distribution." The names of, and the principal
amounts to be purchased by, underwriters or agents, if any, and the compensation
of such underwriters or agents, including applicable commissions and discounts,
will be set forth in the Prospectus Supplement. The aggregate net proceeds to
PNC Funding and PNC from the sale of the Debt Securities, the Common Stock and
the Preferred Stock will be the public offering or purchase price of the
Securities sold less the aggregate of any applicable commissions, discounts and
other expenses of issuance and distribution.
The applicable Prospectus Supplement for offered Debt Securities, among
other things and where applicable, will include the specific designation,
priority, aggregate principal amount, denominations, maturity, premium, interest
rate (which may be fixed or variable) and time of payment of interest,
redemption terms, terms for sinking fund payments, the initial
public offering price terms relatingof up to temporary$1,500,000,000. We may also issue common stock
upon the conversion, exchange or globalexercise of any of the securities provisions regarding
repayment, provisions regarding convertibility, special provisions and
restrictions relatinglisted above.
When we decide to Debt Securities, the principal, premium and interestsell a particular series of which is denominated and payable insecurities, we will prepare a
foreign currency or currency unit,
provisions regarding original issue discountprospectus supplement describing those securities and other termsour plan of distribution.
You should read this prospectus and any applicable prospectus supplement
carefully before you invest.
The common stock of PNC Bank Corp. is listed on the offer and sale of such Debt Securities.
The applicable Prospectus Supplement for offered CommonNew York Stock among other
things, will includeExchange
under the number of shares and other terms of the offer and sale
of such Common Stock.
The applicable Prospectus Supplement for offered Preferred Stock, among
other things and where applicable, will include the specific designation, number
of shares, whether fractional interests will be offered through depositary
arrangements, dividend ratesymbol "PNC".
These securities are not savings or method of calculation, dividend periods, dividend
payment dates, whether dividends are cumulative or noncumulative, liquidation
preference, any redemption, sinking fund, or conversion or exchange provisions,
votingdeposit accounts or other rights,obligations
of any bank, and they are not insured by the Federal Deposit Insurance
Corporation or any other terms of the offer and sale of such Preferred
Stock.
The applicable Prospectus Supplement will also contain information, where
applicable, concerning United States federal income tax considerations relating
to, and as to any listing on a securities exchange of,insurer or governmental agency.
Neither the Securities covered by
such Prospectus Supplement.
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THESE SECURITIES AND THE GUARANTEES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER
OBLIGATIONSand Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined whether
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 1999.
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TABLE OF ANY BANK. THEY ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER INSURER OR GOVERNMENTAL AGENCY.
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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.
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THE DATE OFCONTENTS
PAGE
----
About This Prospectus....................................... 3
Where You Can Find More Information......................... 3
Incorporation Of Certain Documents By Reference............. 4
PNC Bank Corp............................................... 4
PNC Funding Corp............................................ 5
Use Of Proceeds............................................. 5
Consolidated Ratio Of Earnings To Fixed Charges............. 5
Consolidated Ratio Of Earnings To Combined Fixed Charges And
Preferred Stock Dividends................................. 6
Description Of Debt Securities And Guarantees............... 6
Description Of Common Stock................................. 20
Description Of Preferred Stock.............................. 21
Description Of Depositary Shares............................ 25
Plan Of Distribution........................................ 27
Legal Opinions.............................................. 28
Experts..................................................... 28
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ABOUT THIS PROSPECTUS
IS , 1997.
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AVAILABLE INFORMATION
PNCThis prospectus is subject to the informational requirementspart of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports and other informationa registration statement that we filed with the
Securities and Exchange Commission (the
"Commission"). Information, asusing a "shelf" registration process. Under
this shelf process, we may from time to time sell any combination of particular dates, concerning directors and
executive officers, their compensation, options grantedthe
securities described in this prospectus in one or more offerings up to them,a total
dollar amount of $1,500,000,000. We may sell these securities either separately
or in units. We also may issue common stock upon the principal
holdersconversion, exchange or
exercise of any of the securities described in this prospectus.
This prospectus provides you with a general description of PNCthe securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
material interestprospectus supplement together with the additional information described below
under the heading "Where You Can Find More Information."
The registration statement that contains this prospectus, including the
exhibits to the registration statement and the information incorporated by
reference, contains additional information about the securities offered under
this prospectus. That registration statement can be read at the Securities and
Exchange Commission, or SEC, web site or at the SEC offices mentioned below
under the heading "Where You Can Find More Information."
You should rely only on the information provided in this prospectus and in
any prospectus supplement, including the information incorporated by reference.
We have not authorized anyone to provide you with different information. You
should not assume that the information in this prospectus, or any supplement to
this prospectus, is accurate at any date other than the date indicated on the
cover page of such persons in
transactions with PNC is disclosed in proxy statements distributed to
shareholders of PNC andthese documents.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Commission. SuchSEC a registration statement under the Securities
Act of 1933, as amended, that registers the distribution of the securities
offered under this prospectus. The registration statement, including the
attached exhibits and schedules and the information incorporated by reference,
contains additional relevant information about us and the securities. For
example, the indenture relating to our debt securities is attached to the
registration statement as an exhibit. The rules and regulations of the SEC allow
us to omit from this prospectus certain information included in the registration
statement.
In addition, we file annual, quarterly and special reports, proxy
statements and other information can be inspectedwith the SEC. You may read and copiedcopy this
information and the registration statement at the following locations of the
SEC:
- Public Reference Room, of the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20459, and the Commission's20459;
- Chicago Regional Offices atOffice, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 6066160661; and
- New York Regional Office, Seven World Trade Center, 13th Floor, New
York, New York 10048.
CopiesYou may also obtain copies of such materials can be obtainedthis information by mail from the Public
Reference Section of the Commission atSEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20459, at prescribed rates. You may obtain information on the operation of
the public reference room by calling the SEC at 1-800-SEC-0330.
In addition, such material may be accessed
electronically at the Commission's site on theSEC maintains an Internet World Wide Web located at
http://www.sec.gov. Suchsite that
contains reports, proxy statements and other materials
concerning PNC mayinformation about issuers of
securities, like us, who file such material electronically with the SEC. The
address of that web site is http://www.sec.gov. You also be inspectedcan inspect such
reports, proxy statements and other information about us at the officeoffices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which exchange PNC's
Common Stock10005. Our common
stock and certain series of Preferredour preferred stock are listed on the New York Stock
are listed.
PNC Funding and PNC have 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 of 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 additional information about PNC Funding, PNC
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.Exchange.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The followingThis prospectus incorporates by reference the documents listed below that
we previously have filed by PNC with the Commission are incorporated
herein by reference:
(1) PNC'sSEC. These documents contain important
information about us.
- PNC Bank Corp.'s Annual Report on Form 10-K for the year ended
December 31, 1996,1998, as amended by Form 10-K/A (Amendment No. 1) filed
on June 30, 1997;
(2)29, 1999;
- PNC Bank Corp.'s Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 19971999 and June 30, 1997;
(3)1999;
- PNC Bank Corp.'s Current Reports on Form 8-K dated asthat were filed on
January 5, 1999, January 19, 1999, February 19, 1999, April 2, 1999,
April 28, 1999, July 21, 1999, July 26, 1999 and September 2, 1999;
and
- The description of April 15, 1997, July 9,
1997 and July 16, 1997; and
(4) Description of PNC's Common StockPNC Bank Corp.'s common stock and certain series of
Preferred
Stockpreferred stock contained in the Form 8-A that was filed on September
24, 1987.
AllWe "incorporate by reference" any additional documents filed pursuant to Sectionthat we may file
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act subsequent toof 1934, as amended, between the date of this Prospectusprospectus and prior to the termination
of the offering of the Securities shall be deemedsecurities. This means that we can disclose important
information to beyou by referring to those documents. These documents may include
periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K, as well as Proxy Statements. Any documents
that we subsequently file with the SEC will automatically update and replace the
information previously filed with the SEC. Thus, for example, in the case of a
conflict or inconsistency between information set forth in this prospectus and
information incorporated by reference into this Prospectus and to be a part hereof fromprospectus, you should rely on
the date of
filing of such documents. Any statementinformation contained in athe document incorporated by
reference 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 subsequentlywas 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.
PNC will provide without charge to each person to whom this Prospectus is
delivered, on the written or oral request of such person,later.
You can obtain a copy of any or all of the documents incorporated herein by
reference in this prospectus (other than exhibitsan exhibit to sucha documents unless such exhibits arethat
exhibit is specifically incorporated by reference into such documents). Written requests should be directed to: Glenn Davies, Vice
Presidentthat document) from the
SEC on its web site at http://www.sec.gov. You also can obtain these documents
from us without charge by visiting our web site at http://www.pncbank.com or by
requesting them in writing, by email or by telephone at the following address:
Lynn F. Evans
Financial Reporting
PNC Bank Corp.,
One PNC Plaza
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222 or "gdavies@usaor.net" on
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the Internet. Telephone requests may be directed to15222-2707
(412)762-1553. PNC's
Exchange Act filings are also electronically available to the public at its
World Wide Web site at http://www.pncbank.com. 762-1553
financial.reporting@pncbank.com
PNC BANK CORP.
In this prospectus, we use "PNC" to refer to PNC Bank Corp. specifically
or, if the context requires, to PNC Bank Corp. together with its subsidiaries;
"PNC Funding" to refer to PNC Funding Corp specifically; and "we" or "us" to
refer collectively to PNC and PNC Funding.
PNC is a bank holding company registeredorganized under the Bank Holding Company Act
of 1956, as amended (the "BHC Act").Pennsylvania law. PNC was
incorporated under the laws of the
Commonwealth of Pennsylvania in 1983 with the consolidation of Pittsburgh National Corporation
and Provident National Corporation. Since 1983, PNC has diversified its
geographic presence and product capabilities through strategic bank and nonbank
acquisitions and the formation of various nonbanknonbanking subsidiaries.
PNC is one of the largest diversified financial serviceservices companies in the
United States. The CorporationStates and operates through five lines of business: Consumer
Banking, Corporate Banking, Real Estate Banking, Mortgage Bankingseven major businesses engaged in retail banking,
asset management and Asset
Management. Each line of business focuses onwholesale banking activities:
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PNC Regional Bank, PNC Advisors, BlackRock, PFPC Worldwide, PNC Institutional
Bank, PNC Secured Finance and PNC Mortgage.
PNC tailors its financial products and services to specific customer
segments and offers financial productsthem both nationally and services in PNC'sits primary geographic markets
in Pennsylvania, New Jersey, Delaware, Ohio, and Kentucky and nationally through
retail distribution networks and alternative delivery channels.Kentucky. At June 30, 1997, the Corporation's1999, PNC
had consolidated assets, loans (net of unearned income), deposits, and shareholders' equity were $72.0of $75.6 billion,
$53.5 billion, $45.2$47.7 billion, and $5.4$5.8 billion, respectively.
While the Corporation manages five lines of business, thePNC's corporate legal
structure currently consists of 10four subsidiary banksbanking and
savings institutions and over 110100 active nonbank subsidiaries. PNC Bank,
National Association, headquartered in Pittsburgh, Pennsylvania ("PNC Bank"), is
the Corporation'sour principal bank subsidiary. At June 30, 1997,1999, PNC Bank had total consolidated
assets of $57.5$69.0 billion, representing approximately 80%91% of the Corporation'sour consolidated
assets.
PNC's principal executive offices are located atat:
One PNC Plaza
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222, and its telephone number is15222-2702
(412)762-1553. 762-1553
PNC FUNDING CORP
PNC Funding is a wholly-ownedwholly owned indirect subsidiary of PNC. PNC Funding was
incorporated under the laws of the Commonwealth of Pennsylvania law in 1972 and is engaged in financing the
activities of PNC and its subsidiaries through the issuance of commercial paper
and other debt guaranteed by PNC.
PNC Funding's principal executive offices are located atat:
1600 Market Street
Philadelphia, Pennsylvania 19101
(215) 585-5000
USE OF PROCEEDS
Unless otherwise provided in the applicable prospectus supplement, we will
apply the net proceeds from the sale of the securities for general corporate
purposes, including:
- advances to PNC (in the case of PNC Funding) and subsidiaries of PNC
(including its bank subsidiaries),
- financing of possible future acquisitions,
- repayment of outstanding indebtedness, and
- repurchases of issued and outstanding shares of common stock under
authorized programs of PNC.
The amount and timing of advances will depend on future growth and
financing requirements of PNC and its telephone number is
(215)585-5000.
SUPERVISION, REGULATION AND OTHER MATTERS
The Corporation and its subsidiaries are subject to extensive governmental
regulation. The coverage ofsubsidiaries. Pending ultimate
application, the regulations range from activity, investment and
dividend limitations on the bank holding company and its subsidiaries to
consumer-related protections for loans, deposits, brokerage and mutual fund
customers. The following information is not intended to be an exhaustive
description of the statutes and regulations applicable to PNC. The discussion is
qualified in its entirety by reference to all particular statutory or regulatory
provisions. Additional information regarding supervision and regulation is
included in the incorporated documents. See "Incorporation of Certain Documents
by Reference."
As a bank holding company registered under the BHC Act, PNC's primary bank
regulatory authority is the Board of Governors of the Federal Reserve System
(the "Federal Reserve"). Under Federal Reserve policy, a bank holding company is
expected to act as a source of strength to each of its subsidiary banks and to
commit resources to support each such bank. As a result of that policy, PNCnet proceeds may be requiredused to commit resources to its subsidiary banks in circumstances where
it might not otherwise do so. Moreover, the actions and policy directivesmake short-term investments or
reduce borrowed funds. In view of the
Federal Reserve determine to a significant degree the cost and the availability
of funds obtainedanticipated funding requirements, we may from money market sources for lending and investing. The
Federal Reserve's policies and regulations also influence, directly and
indirectly, the rates of interest paid by commercial banks on their time and
savings deposits. The nature and impact on PNC of future changes in monetary and
other policies of the
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Federal Reserve are not predictable, as such changes also depend on economic
conditions and domestic and foreign governmental policies, among other factors.
PNC is a legal entity separate and distinct from PNC Funding, PNC Bank and
its other subsidiaries and affiliates. Such subsidiaries and affiliates are also
subject to supervision and examination by various federal and state regulatory
agencies, including the Office of the Comptroller of the Currency ("OCC") with
respect to PNC Bank. Because PNC is a holding company, its rights and the rights
of its creditors and shareholders, including the holders of the Securities, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that PNC may itself be a creditor with
recognized claims against the subsidiary.
PNC derives substantially all of its income from payment of dividends by
its bank and non-bank subsidiaries. There are various legal limitations on the
extent to which PNC's bank subsidiaries may extend credit, pay dividends or
otherwise supply funds to PNC. For example, the approval of the OCC is required
if total dividends by a national bank in any calendar year exceed net profits
(as defined) for that year combined with its retained profits for the preceding
two years. In addition, dividends for such a bank may not be paid in excess of
the bank's undivided profits. State-chartered bank subsidiaries are subject to
dividend limitations imposed by applicable state law. The approval of the Office
of Thrift Supervision may be required if total dividends declared by PNC's
savings association subsidiary in any calendar year exceed amounts specified in
that agency's regulations. In determining whether and to what extent to pay
dividends, each bank subsidiary must also consider the effect of dividend
payments on applicable risk-based capital and leverage requirements (as
described below) as well as policy statements of the federal regulatory agencies
that indicate that banking organizations should generally pay dividends out of
current operating earnings. Contractual restrictions may also limit the ability
to pay dividends, such as those contained in documentation relating to
mandatorily redeemable capital securities in the event of a default.
The U.S. federal bank regulatory authorities have each adopted risk-based
capital guidelines to which the Corporation and its insured depository
institutions subsidiaries are subject. These guidelines are based on an
international agreement developed by the Basle Committee on Banking Regulations
and Supervisory Practices, which consists of representatives of central banks
and supervisory authorities in 12 countries including the United States of
America. The guidelines establish a systematic analytical framework that makes
regulatory capital requirements more sensitive to differences in risk profiles
among banking organizations, takes off-balance sheet exposures into explicit
account in assessing capital adequacy and minimizes disincentives to holding
liquid, low-risk assets. Risk-based assets are determined by allocating assets
and specified off-balance sheet commitments and exposures into four weighted
categories, with higher levels of capital being required for the categories
perceived as representing greater risk. From
time to time the federal
regulatory agencies propose amendments toengage in additional financings of a character and issue interpretations of their
risk-based capital guidelines and reporting instructions, which can affect
reported capital ratios and net risk-adjusted assets.
Each of the Corporation's subsidiary banks is required to maintain a
minimum total risk-based ratio of 8%, of which half (4%) must be "Tier I"
capital. In addition, U.S. federal bank regulators have established leverage
ratio (Tier I capital to average total adjusted assets) guidelines providing for
a minimum leverage ratio of 3% for banks meeting certain specified criteria,
including excellent asset quality, high liquidity, low interest rate exposure
and the highest regulatory rating. Institutions not meeting these criteria are
expected to maintain a ratio which exceeds the 3% minimum by at least 100 to 200
basis points. The federal bank regulatory authorities may, however, set higher
capital requirements when a bank's particular circumstances warrant.
The federal banking agencies possess broad powers to take corrective action
as deemed appropriate for an insured depository institution and its holding
companies. The extent of these powers depends upon whether the institution in question is considered "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Generally, as an institution is deemedamounts to be
less well
capitalized, the scope and severity of the agencies' powers increase. The
agencies' corrective powers can include, among other things, requiring an
insured financial institution to adopt a capital restoration plan which cannot
be approved unless guaranteed by the institution's parent holding company;
placing limits on asset
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6
growth and restrictions on activities; placing restrictions on transactions with
affiliates; restricting the interest rates the institution may pay on deposits;
prohibiting the institution from accepting deposits from correspondent banks;
prohibiting the payment of principal or interest on subordinated debt;
prohibiting the holding company from making capital distributions without prior
regulatory approval; and, ultimately, appointing a receiver for the institution.
Business activities may also be influenced by an institution's capital
classification. For instance, only a "well capitalized" depository institution
may accept brokered deposits without prior regulatory approval and only an
"adequately capitalized" depository institution may accept brokered deposits
with prior regulatory approval. At June 30, 1997, each of the Corporation's
subsidiary banks exceeded the required ratios for classification as "well
capitalized."
The deposits of the Corporation's subsidiary banks are insured by the
Federal Deposit Insurance Corporation (the "FDIC") and are subject to FDIC
insurance assessments. The amount of FDIC assessments paid by individual insured
depository institutions is based on their relative risk as measured by
regulatory capital ratios and certain other factors. Currently, the
Corporation's bank subsidiaries are not assessed any premium for deposits
insured by either the Bank Insurance Fund or by the Savings Association
Insurance Fund. The Corporation's bank subsidiaries, however, continue to pay
premiums based on deposit levels to service debt on bonds issued by a
governmental entity.
Under U.S. federal law, a financial institution insured by the FDIC under
common ownership with a failed institution can be required to indemnify the FDIC
for its losses resulting from the insolvency of the failed institution, even if
such indemnification causes the affiliated institution also to become insolvent.
As a result, the Corporation's subsidiary banks could, under certain
circumstances, be obligated for the liabilities of its affiliates that are
FDIC-insured institutions. In addition, if any insured depository institution
becomes insolvent and the FDIC is appointed its conservator or receiver, the
FDIC may disaffirm or repudiate any contract or lease to which such institution
is a party, the performance of which is determined to be burdensome and the
disaffirmance or repudiation of which is determined to promote the orderly
administration of the institution's affairs. If federal law were construed to
permit the FDIC to apply these provisions to debt obligations of an insured
depository institution the result could be that such obligations would be
prepaid without premium even where by their terms they were not prepayable or
prepayable only with a premium. Federal law also accords the claims of a
receiver of an insured depository institution for administrative expenses and
the claims of holders of deposit liabilities of such an institution priority
over the claims of general unsecured creditors of such an institution in the
event of a liquidation or other resolution of such institution.
The BHC Act currently permits adequately capitalized and adequately managed
bank holding companies from any state to acquire banks and bank holding
companies located in any other state, subject to certain conditions. Effective
June 1, 1997, the Corporation's bank subsidiaries have the ability, subject to
certain restrictions, to consolidate with other banking subsidiaries of the
Corporation or to acquire by acquisition or merger branches outside of their
home state. The Corporation has taken advantage of such and certain related
state actions as evidenced by the September 6, 1996 merger of PNC Bank, National
Association and Midlantic Bank, National Association, and may do so again in the
future with its bank subsidiaries. Competition may increase as banks branch
across state lines and enter new markets.
5
7determined.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following unaudited table presents theour consolidated ratio of earnings
to fixed charges of PNC.charges. The consolidated ratio of earnings to fixed charges has
beenwas
computed by dividing income before income taxes and cumulative effect of changes
in accounting principles and fixed charges by fixed charges. Fixed charges
represent all interest expense (ratios are presented both excluding and
including interest on deposits), the
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portion of net rental expense whichthat is deemed to be equivalent to interest on
debt, borrowed funds discount amortization expense and distributions on trust
preferred capital securities. Interest expense (other than on deposits) includes
interest on bank notes and senior debt, federal funds purchased, repurchase
agreements, other borrowed funds and subordinated debt. SinceBecause PNC Funding is a
provider of funds to PNC and its subsidiaries, fixed charges ratios have beenare
presented on a consolidated basis.
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------------------------------------------
JUNE 30, 1999 1998 1997 1996 1995 1994 1993 1992
---------------- ---- ---- ---- ---- ----
Excluding interest on deposits...................... 2.40xdeposits................ 2.61x 2.25x 2.38x 2.39x 1.42x 2.10x
2.62x 2.35x
Including interest on deposits......................deposits................ 1.75 1.60 1.62 1.60 1.21 1.53 1.67 1.37
CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following unaudited table presents theour consolidated ratio of earnings
to combined fixed charges and preferred stock dividends of PNC.dividends. The consolidated ratio
of earnings to combined fixed charges and preferred stock dividends has
beenwas computed
by dividing income before income taxes, cumulative effect of changes in
accounting principles and fixed charges by fixed charges and preferred stock
dividends. Fixed charges represent all interest expense (ratios are presented
both excluding and including interest on deposits), the portion of net rental
expense whichthat is deemed to be equivalent to interest on debt, borrowed funds
discount amortization expense and distributions on trust preferred capital
securities. Interest expense (other than on deposits) includes interest on bank
notes and senior debt, federal funds purchased, repurchase agreements, other
borrowed funds and subordinated debt.
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------------------------------------------
JUNE 30, 1999 1998 1997 1996 1995 1994 1993 1992
---------------- ---- ---- ---- ---- ----
Excluding interest on deposits...................... 2.36xdeposits................ 2.57x 2.23x 2.35x 2.38x 1.42x 2.09x
2.60x 2.33x
Including interest on deposits...................... 1.62deposits................ 1.74 1.60 1.61 1.60 1.21 1.53 1.66 1.37
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8
USE OF PROCEEDS
Unless otherwise provided in the Prospectus Supplement, PNC Funding and PNC
will apply the net proceeds from the sale of the Securities offered hereby to
their general funds to be used for corporate financing purposes, including
advances to PNC (in the case of PNC Funding) and subsidiaries of PNC (including
its bank subsidiaries), financing of possible future acquisitions, repayment of
outstanding indebtedness and repurchases of issued and outstanding shares of
Common Stock under authorized programs of PNC. The amount and timing of advances
will depend on future growth and financing requirements of PNC and its
subsidiaries. Pending ultimate application, the net proceeds may be used to make
short-term investments or reduce borrowed funds. In view of anticipated funding
requirements, PNC Funding or PNC may from time to time engage in additional
financings of a character and in amounts to be determined.
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
The Debt Securities will constitute either Senior Debt Securities of PNC
Funding or Subordinated Debt Securities of PNC Funding. The following
description ofThis section describes the terms of the Debt Securities sets forth certain general terms and provisions of the Debt Securities to which any Prospectus Supplementdebt
securities that PNC Funding may relate.offer, and the guarantees of such debt
securities by PNC. The particulardebt securities may be either senior debt securities or
subordinated debt securities. The prospectus supplement will describe the
specific terms of the Debt Securitiesdebt securities and Guaranteesguarantees offered bythrough that
prospectus supplement and any Prospectus Supplement ("Offered Debt Securities") and the extent, if any, to
which such general provisions mayterms outlined in this section that will
not apply to the Debt Securitiesthose debt securities and Guarantees so
offeredguarantees.
The debt securities will be described in the Prospectus Supplement relating to such Offered
Debt Securities.
The Offered Debt Securities are to be issued under an Indenture,indenture, dated as of December
1, 1991, as amended by a Supplemental Indenturesupplemental indenture dated as of February 15, 1993
(as amended, the "Indenture""indenture"), a copy of which has been filed with the Commission.SEC. The
Chase Manhattan Bank, formerly known as Chemical Bank and as successor by merger
to Manufacturers Hanover Trust Company, shall beis the Trusteetrustee under the Indenture ("Trustee"),indenture,
unless a different Trusteetrustee for a series of Debt
Securitiesdebt securities is named in the
Prospectus Supplement.prospectus supplement. For each series of Debt
Securities,debt securities, a supplemental
indenture may be entered into among PNC Funding, PNC and The Chase Manhattan
Bank or such other Trusteetrustee as may be named in the Prospectus Supplementprospectus supplement relating
to suchthat series of Debt Securities. The following
summaries of certaindebt securities.
We have summarized the material terms and provisions of the Indenture do not purportindenture in
this section. We encourage you to be complete
and are subjectread the indenture for additional information
before you buy any debt securities. The summary that follows includes references
to and are qualified in their entirety by reference to, all the
provisionssection numbers of the Indenture, including the definitions therein of certain terms.
Wherever particular sections or defined terms of the Indenture are referred to,
it is intendedindenture so that such sections or defined terms shall be incorporated herein
by reference.you can more easily locate these
provisions.
DEBT SECURITIES IN GENERAL
The Debt Securitiesdebt securities will be unsecured obligations of PNC Funding.
Although the amount of Offered Debt Securities will be limited to the
amount that will result in net proceeds to PNC Funding as described on the cover
page of this Prospectus, the Indenture6
8
The indenture does not limit the aggregate principal amount of debt securities that we may
be issued thereunderissue from time to time in one or more series.
Reference is madeWe will specify in the prospectus supplement relating to a particular
series of debt securities being offered the Prospectus Supplementterms relating to the particular
series of Debt Securities offered thereby foroffering. The
terms may include:
- the termstitle and type of the Offered Debt
Securities, including, where applicable; (1) the form, title and denomination of
the Debt Securities; (2)debt securities;
- the aggregate principal amount of the Debt Securities;
(3)debt securities;
- the purchase price of the debt securities;
- the date or dates on which Debt Securitiesdebt securities may be issued;
(4)- the date or dates on which the principal of and premium if any, on the Debt Securities
shalldebt
securities will be payable;
(5)- if the debt securities will be interest bearing:
- the interest rate or rates,on the debt securities or the method of determination thereof,
atby which the
Debt Securities shall bear interest if any,rate may be determined;
- the date or dates from which such interest shall accrue,will accrue;
- the record and interest payment dates for the Interest Payment Dates ondebt securities;
- the first interest payment date; and
- any circumstances under which suchwe may defer interest shall be payable; (6) the priority of payment of such Debt Securities
and thus whether they shall be designated as Senior Debt Securities or
Subordinated Debt Securities; (7)payments;
- the place or places where the principal of, and premium if any, and interest
on, Debt Securities of the series shalldebt securities will be payable;
(8)- any optional redemption provisions that would permit us or the provisions, if any, for optional or mandatoryholders
of debt securities to elect redemption of the Debt Securities, includingdebt securities before
their final maturity;
- any sinking fund provisions; (9) if other thanprovisions that would obligate us to redeem the principal amount thereof,debt
securities before their final maturity;
- the
7
9 portion of the principal amount of Debt Securities which shallthe debt securities that will
be payable upon declaration ofan acceleration of the Maturity thereof in accordance with the
provisionsmaturity of the Indenture; (10)debt
securities;
- whether payment of the principal of, premium, if any, and interest if any, on, the
Debt Securities shalldebt securities will be with or without deduction for taxes,
assessments or governmental charges, and with or without reimbursement
of taxes, assessments or governmental charges paid by Holders;
(11)holders;
- any Eventsevents of Default or Defaults with respectdefault which will apply to the Debt Securitiesdebt securities that
differ from those set forthcontained in the Indenture; (12)indenture;
- whether the debt securities of
such series are towill be issued in aregistered form registered as to principal ("Registered
Securities") (with or without interest coupons ("Coupons")) or in a form
registered with regard to principal and interest ("Fully Registered Securities") or in
bearer form, ("Unregistered Securities"), or asin both Registered Securitiesregistered form and Unregistered Securities; (13)bearer form;
- the currency or currencies or currency unit
or currency units in which the principal of, and premium, if any, and interest,
if any, on the Debt Securities are todebt securities will be
denominated, payable, redeemable or repurchaseable, as the case may be; (14) if other than as set forth in the
Indenture, provisions the satisfaction and discharge of the indebtedness
represented by the Debt Securities; (15)repurchaseable;
- whether the Debt Securitiesdebt securities of such series are issuablewill be issued as a global
security and, in such case,if so, the identity of the depositary for such series;
(16)- any trustees, paying agents, transfer agents or registrars for the
Debt Securities; (17) with regard to Debt Securities that do
not bear interest, the dates for certain required reports to the Trustee; (18)debt securities;
- any special federal income tax considerations applicable to any Offered Debt
Securities;the debt
securities; and
(19)- any other terms of such Debt Securities.
Any Subordinated Debt Securitiesdebt securities.
We intend for any subordinated debt securities offered are intended to be included as
regulatory capital under recent interpretations of the Federal Reserve Board and, asinterpretations. As a result,
these debt securities will contain subordination and
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9
acceleration provisions different from, and covenants more limited than in,
certain prior issuances of PNC Funding's Subordinated Securities.subordinated debt securities.
If any of the Debt Securitiesdebt securities are sold for, foreign currencies or foreign
currency units or if the principal of or any
interest on any series of Debt
Securitiesdebt securities is payable in, foreign currencies or
foreign currency units, the relevant 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.applicable
prospectus supplement.
Although the Indentureindenture provides that Debt Securitieswe may be issued as
Registered Securities,issue debt securities in
registered form, with or without Coupons,coupons, or Unregistered Securities,in bearer form, each series of Debt Securitiesdebt
securities will be issued as Fully Registered Securitiesin fully registered form unless the Prospectus Supplementprospectus
supplement provides otherwise. Debt Securitiessecurities that are not registered as to
interest shallwill have Couponscoupons attached, unless issued as Original
Issue Discount Securities. All references to the Debt Securities shall, where
applicable, include the Coupons, if any, appertaining thereto.
Principaloriginal issue discount
securities.
The principal of, and premium if any, and interest on, Fully Registered
Securitiesfully registered securities
will be payable at the Placeplace of Paymentpayment designated for such Debt
Securities; provided that payment of interest may, atsecurities and
stated in the option ofprospectus supplement. PNC Funding be madealso has the right to make
interest payments by check mailed to the address of the person entitled thereto as it
appears in the Security Registerholder at the close of business on the day or days
specified in the Prospectus Supplement relating to such Debt Securities.its registered address. The
principal of, and premium, if any, and interest on any Debt Securitiesdebt securities in other
forms will be payable in suchthe manner and at suchthe place or places as may be
designated by PNC Funding and specified in the Prospectus Supplement relating to
such Debt Securities.applicable prospectus supplement.
(Sections 3.01 and 5.01)
The Debt SecuritiesYou may be exchanged, and Registered Securities may be
transferred,exchange or transfer the debt securities at the Corporate Trust Officecorporate trust
office of the Trusteetrustee for suchthe applicable series of Debt Securitiesdebt securities or at any
other office or agency maintained by PNC Funding or
PNCus for suchthose purposes. Unregistered Securities and Coupons shall be transferredYou may transfer
bearer debt securities by delivery. NoWe will not require payment of a service
charge will be made for any transfer or exchange of the Debt Securities,debt securities, but PNC Funding may
require payment of a sum sufficient to cover any applicable tax or other
governmental charge payable in connection therewith.charge. (Section 3.05).
Unless the Prospectus Supplementprospectus supplement provides otherwise, each series of the
Debt Securitiesdebt securities will be issued only in denominations of $1,000 or any integral
multiple thereof and payable in Dollars.dollars. (Section 3.02). Under the Indenture,indenture,
however, Debt Securitiesdebt securities may be issued in any denomination and payable in a
foreign currency or currency unit. (Section 3.01)
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10
Debt Securities.
We may be issuedissue debt securities with "original issue discount" (within the
meaning of the Internal Revenue Code). Federaldiscount." Original issue
discount debt securities bear no interest or bear interest at below-market rates
and will be sold below their stated principal amount. The prospectus supplement
will describe any special federal income tax consequences and other special
considerations applicable to any such securities issued with original issue discount will be described in the Prospectus Supplement relating thereto.discount.
SENIOR DEBT SECURITIES
The Senior Debt Securitiessenior debt securities will rank equally with all Senior Indebtednesssenior indebtedness
of PNC Funding. At June 30, 1997, suchAugust 31, 1999, the outstanding Senior Indebtednesssenior indebtedness of PNC
Funding was approximately $513.7$918.5 million.
Senior Indebtedness"Senior indebtedness of PNC Funding, defined in the Indenture as "Senior
Company Indebtedness,"Funding" means the principal of, and premium
if any, and interest on, (i) all indebtedness"indebtedness for money borrowed,borrowed" of PNC Funding
whether outstanding on the date of execution of the Indentureindenture or thereafter
created, assumed or incurred, except
(A) such indebtedness as is by its terms expressly stated not to be superior in
right of payment to the Subordinated Debt Securities or to rank pari passu with
the Subordinated Debt Securities, and (B) PNC Funding's 9 7/8% Subordinated
Notes Due 2001, 6 7/8% Subordinated Notes Due 2003, 6 1/8% Subordinated Notes
Due 2003, 7 3/4% Subordinated Notes Due 2004 and 6 7/8% Subordinated Notes Due
2007 and CCNB Corporation's 10.55% Equity Commitment Notes Due 1998 assumed by
PNC Funding and PNC in connection with the acquisition of CCNB Corporation on
October 23, 1992 and (ii) any deferrals, renewals or extensions of
any such Senior Indebtednessindebtedness. The following indebtedness of PNC Funding.Funding, however, is
not considered to be senior indebtedness of PNC Funding:
- 9 7/8% Subordinated Notes Due 2001,
- 6 7/8% Subordinated Notes Due 2003,
- 6 1/8% Subordinated Notes Due 2003,
- 7 3/4% Subordinated Notes Due 2004,
- 6 7/8% Subordinated Notes Due 2007,
- 6 1/2% Subordinated Notes Due 2008, and
- 6 1/8% Subordinated Notes Due 2009.
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The term "indebtedness for money borrowed" as used in the prior sentence meansmeans:
- any obligation of, or any obligation guaranteed by, PNC Funding for
the repayment of money borrowed, whether or not evidenced by bonds,
debentures, notes or other written instruments,
- any capitalized lease obligation, and
- any deferred obligation for payment of the purchase price of any
property or assets. (Section 1.01).
Senior Indebtednessindebtedness of PNC Funding would includeincludes any borrowings under the $500
million credit facility under an Amended and Restated Credit Agreement dated as
of March 18, 1996, as amended, (the "$500 Million Credit Facility"), under which noand
outstanding commercial paper issued by PNC Funding. No amounts are currently
outstanding as ofunder the date
of this Prospectus.$500 Million Credit Facility. There is no limitation under the Indenture on
the issuance of additional Senior Indebtednesssenior indebtedness of PNC Funding.
SUBORDINATED DEBT SECURITIES
The payment of the principal of and interest on the Subordinated Debt
Securitiessubordinated debt securities will to the extent set forth in the Indenture, be subordinated in right of payment
to the prior payment in full of all Senior Indebtednesssenior indebtedness of PNC Funding. (Section 12.01). In certain events of
insolvency of PNC Funding, the payment of the
principal of and interest on the Subordinated Debt Securitiessubordinated debt securities will to the
extent set forth in the Indenture, also be
effectively subordinated in right of payment to the prior payment in fullall "other company obligations"
and will be subject to an obligation of all Other Company ObligationsPNC Funding to pay any "excess proceeds"
(as defined in the Indenture).indenture) to creditors in respect of any unpaid other
company obligations. (Section 12.13) Other Company Obligations.
"Other company obligations" means obligations of PNC Funding associated
with derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts, or any similar arrangements,
unless the instrument by which PNC Funding incurred, assumed or guaranteed the
obligation expressly provides that it is subordinate or junior in right of
payment to any other indebtedness or obligations of PNC Funding. (Section 1.01).
At June 30, 1997,August 31, 1999, there were no Other Company
Obligationsother company obligations of PNC Funding.
(Section 1.01)
Upon any payment or distribution of assets to creditors upon anythe liquidation, dissolution, winding up, or reorganization assignment forof PNC
Funding, PNC Funding must pay to the benefitholders of creditors, marshaling of assets or any bankruptcy, insolvency or similar
proceedingsall senior indebtedness of PNC
Funding the holdersfull amounts of all Senior Indebtednessprincipal of, and premium and interest on, that
senior indebtedness before any payment is made on the subordinated debt
securities. If, after PNC Funding will first be entitled to receive payment in full of all amounts due or
to become due thereon before the Holders of the Subordinated Debt Securities
will be entitled to receive any payment in respect of the principal of or
interesthas made those payments on the Subordinated Debt Securities. If upon any such payment or
distribution of assets to creditorssenior
indebtedness
- (i) there remain, after giving effect to such
subordination provisions in favor of the holders of Senior Indebtedness of PNC
Funding, anyare amounts of cash, property or securities available for payment or
distribution in respect of Subordinated Debt Securitieson the subordinated debt
securities (as defined in the Indenture, "Excess Proceeds"indenture, "excess proceeds"), and if,(ii)
at such time, any creditors in respect of Other Company Obligations"other company obligations"
have not received paymenttheir full payments, then
- PNC Funding shall first use such excess proceeds to pay in full of all
amounts due
or to become due on or in respect of such Other Company Obligations, then such
Excess Proceeds shall first be applied to pay or provide for the payment in full
of such Other Company Obligationsother company obligations before PNC Funding makes any payment or distribution may be made in
respect of the Subordinated Debt Securities.subordinated debt securities. (Section 12.02).
In addition, noPNC Funding may not make any payment may be
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made of the principal of or interest on the Subordinated Debt Securities, orsubordinated debt
securities in respect of any retirement, purchase or other acquisition of any of the Subordinated Debt Securities at any time when (i) there is a default in theevent
- PNC Funding has failed to make full payment of the principal of, or
premium, if any, or interest on or otherwise in
respect of any Senior Indebtednesssenior indebtedness of PNC
FundingFunding; or
(ii)- any event of default with respect to any Senior Indebtednesssenior indebtedness of PNC
Funding has occurred and is continuing, or would occur as a result of
such payment on the Subordinated Debt
Securities or any retirement, purchase or other acquisition of anysubordinated debt securities.
Because of the Subordinated Debt Securities permitting the holders of such Senior Indebtedness
of PNC Funding to accelerate the maturity thereof. Except as described above,subordination provisions and the obligation of PNC Funding to make payment of the principal of or interest on
the Subordinated Debt Securities will not be affected. By reason of such
subordination,pay excess
proceeds, in the event of insolvency, holders of the Subordinated Debt
Securitiessubordinated debt
securities may recover less, ratably, than holders of Senior Indebtednesssenior indebtedness of PNC
Funding and Other Company Obligationsother company obligations, and may also recover less, ratably, than holders of Existing Company Subordinated Indebtednessexisting company
subordinated indebtedness and other creditors of PNC Funding. (Sections 12.01,
12.02, 12.03, and 12.13)
Existing Company Subordinated Indebtedness means PNC Funding's 9 7/8%
Subordinated Notes Due 2001 and CCNB Corporation's 10.55% Equity Commitment
Notes Due 1998 assumed by PNC Funding and PNC in connection with the acquisition
of CCNB Corporation on October 23, 1992. (Section 1.01) At June 30, 1997, the
Existing Company Subordinated Indebtedness was approximately $101.3 million..
PNC Funding's obligations under the Subordinated Debt Securities shallsubordinated debt securities will rank
pari passuequally in right of payment with each other and with the Existing Company
Subordinated Indebtedness,"existing company
subordinated indebtedness" (as defined in the
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indenture), subject to the obligations of the Holdersholders of Subordinated Debt Securitiessubordinated debt
securities to pay over any Excess Proceedsexcess proceeds to creditors in respect of Other Company Obligationsother
company obligations as provided in the Indenture.indenture. (Section 12.13).
As defined in the indenture, the existing company subordinated indebtedness
currently consists of PNC Funding's 9 7/8% Subordinated Notes Due 2001. (Section
1.01). At August 31, 1999, the outstanding existing company subordinated
indebtedness of PNC Funding was approximately $100 million.
GUARANTEES IN GENERAL
PNC will unconditionally guarantee the due and punctual payment of the
principal of, premium, if any, and interest on the Debt Securitiesdebt securities when and as
the same shall become due and payable, whether at maturity, upon redemption or
otherwise. (Section 3.12).
PNC is a holding company that conducts substantially all its operations
through subsidiaries. As a result, claims of the holders of the guarantees will
generally have a junior position to claims of creditors of PNC's subsidiaries
(including in the case of any bank subsidiary, its depositors), except to the
extent that PNC may itself be a creditor with recognized claims against the
subsidiary. In addition, there are certain regulatory and other limitations on
the payment of dividends and on loans and other transfers of funds to PNC by its
bank subsidiaries.
GUARANTEES OF SENIOR DEBT SECURITIES
The Guaranteesguarantees of Senior Debt Securitiessenior debt securities will rank equally with all Senior
Indebtednesssenior
indebtedness of PNC.PNC (defined in the indenture as "senior guarantor
indebtedness"). At June 30, 1997,August 31, 1999, the outstanding Senior Indebtednesssenior indebtedness of PNC
was approximately $869.9$1,218.5 million, which is inclusive of the guarantee of
Senior Indebtednesssenior indebtedness of PNC Funding.
Senior Indebtedness"Senior indebtedness of PNC, defined in the Indenture as "Senior Guarantor
Indebtedness,"PNC" means the principal of, and premium, if any,
and interest on, (i) all indebtedness"indebtedness for money borrowed" of PNC, for money borrowed, whether
outstanding on the date of execution of the Indentureindenture or thereafter created,
assumed or incurred, except
(A) such indebtedness as is by its terms expressly stated not to be superior in
right of payment to the Subordinated Guarantees or to rank pari passu with the
Subordinated Guarantees, (B) PNC's 8 1/4% Convertible Subordinated Debentures
Due 2008 and PNC's 8 1/2% Convertible Subordinated Debentures Due 2005
originally issued by Citizens Fidelity Corporation, and (C) PNC's Guarantee of
PNC Funding's 9 7/8% Subordinated Notes Due 2001, 6 7/8% Subordinated Notes Due
2003, 6 1/8% Subordinated Notes Due 2003, 7 3/4% Subordinated Notes Due 2004 and
6 7/8% Subordinated Notes Due 2007 and CCNB Corporation's 10.55% Equity
Commitment Notes Due 1998 assumed by PNC Funding and PNC in connection with the
acquisition of CCNB Corporation on October 23, 1992, and (ii) any deferrals, renewals or extensions of any such
Senior Indebtednessindebtedness of PNC. (Section 1.01). However, the following indebtedness of PNC
is not considered to be senior indebtedness of PNC:
- PNC's 8 1/4% Convertible Subordinated Debentures Due 2008, and
- PNC's guarantee of the following indebtedness of PNC Funding:
- 9 7/8% Subordinated Notes Due 2001,
- 6 7/8% Subordinated Notes Due 2003,
- 6 1/8% Subordinated Notes Due 2003,
- 7 3/4%, Subordinated Notes Due 2004,
- 6 7/8% Subordinated Notes Due 2007,
- 6 1/2% Subordinated Notes Due 2008, and
- 6 1/8% Subordinated Notes Due 2009.
The term "indebtedness for money borrowed" as used in the prior sentence means
- any obligation of, or any obligation guaranteed by, PNC for the
repayment of money borrowed, whether or not evidenced by bonds,
debentures, notes or other written instruments,
- any capitalized lease obligation, and
- any deferred obligation for payment of the purchase price of any
property or assets.
Senior Indebtedness10
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"Senior indebtedness of PNC" includes PNC's guarantee of the following
senior notes of PNC includes PNC's Guarantee of PNC Funding's 4.93% Senior Notes Due 1998,Funding:
- 5.43% Senior Notes Due 2000,
and 5.18% Senior- 6.95% Notes Due 19992002, and
- 7.00% Notes Due 2004
and the following joint and several obligations of PNC and PNC Bancorp, Inc.
assumed in connection with the merger of Midlantic Corporation with PNC Bancorp,
Inc. aton December 31, 1996:
8 1/4% Convertible Subordinated Debentures1995:
- 9.25% Senior Notes Due 2010,1999,
- 9.875% Subordinated Capital 10
12
Notes Due 1999, and
- 9.20% Subordinated Capital Notes Due 2001 and 9.25% Senior Notes
Due 1999. Senior Indebtedness2001.
"Senior indebtedness of PNC wouldPNC" also includeincludes PNC's Guaranteeguarantee of any
borrowings under the $500 Million Credit Facility.Facility and of any outstanding
commercial paper issued by PNC Funding. There is no limitation under the
Indentureindenture on the issuance of additional Senior Indebtednesssenior indebtedness of PNC.
GUARANTEES OF SUBORDINATED DEBT SECURITIES
The paymentguarantees of the principal of and interest on the Subordinated Debt
Securities pursuant to the Guarantees of the Subordinated Debt Securitiessubordinated debt securities ("Subordinated Guarantees"subordinated
guarantees") will to the extent set forth in the Indenture, be subordinated in right of payment to the prior payment in full of all Senior
Indebtednesssenior indebtedness
of PNC. (Section 12.04). In certain events of insolvency of PNC, the
payment of the principal of and interest on the Subordinated Guaranteessubordinated guarantees will to
the extent set forth in the Indenture, also be effectively subordinated in right of
payment to the prior payment in full of all Other Guarantor Obligations"other guarantor obligations" (as defined in the Indenture)indenture).
(Section 12.05) Other Guarantor Obligations. "Other guarantor obligations" means obligations of PNC
associated with derivative products such as interest rate and currency exchange
contracts, foreign exchange contracts, commodity contracts or any similar
arrangements, unless the instrument by which PNC incurred, assumed or guaranteed
the obligation expressly provides that it is subordinate or junior in right of
payment to any other indebtedness or obligations of PNC. (Section 1.01) At
June 30, 1997,August 31, 1999, there were no Other Guarantor Obligationsother guarantor obligations of PNC.
Upon any payment or distribution of assets to creditors upon anythe liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedingsreorganization of PNC,
PNC must pay to the holders of all Senior Indebtednesssenior indebtedness of PNC will first be
entitled to receive payment inthe full amounts
of all amounts due or to become due thereonprincipal of, and premium and interest on, that senior indebtedness before the Holders of the Subordinated Guarantees will be entitled to receive
any payment in respect of the principal of or interestis made on the Subordinated Debt
Securities pursuant tosubordinated debt securities. If, after PNC has made
those payments on the Subordinated Guarantees. If upon any such payment or
distribution of assets to creditorssenior indebtedness
- (i) there remain, after giving effect to such
subordination provisions in favor of the holders of Senior Indebtedness of PNC,
anyare amounts of cash, property or securities available for payment or
distribution in respect of Subordinated Guaranteeson the subordinated debt
securities (as defined in the Indenture,
"Excess Proceeds"indenture, "excess proceeds"), and if,(ii)
at such time, any creditors in respect of Other
Guarantor Obligations"other company obligations"
have not received paymenttheir full payments, then
- PNC shall first use such excess proceeds to pay in full of all amounts due or to
become due on or in respect of such Other Guarantor Obligations, then such
Excess Proceeds shall first be applied to pay or provide for the payment in full
of such Other Guarantor Obligationsother
company obligations before PNC makes any payment or distribution may be
made in respect of the
Subordinated Guarantees.subordinated debt securities. (Section 12.02).
In addition, noPNC may not make any payment may be
madeon the subordinated debt
securities in the event
- PNC has failed to make full payment of the principal of, or interest on the Subordinated Debt Securities
pursuant to the Subordinated Guarantees or in respect of any retirement,
purchase or other acquisition of any of the Subordinated Debt Securities
pursuant to the Subordinated Guarantees, at any time when (i) there is a default
in the payment of the principal of, premium,
if any, or interest on any senior indebtedness of PNC; or
otherwise
in respect of any Senior Indebtedness of PNC or (ii)- any event of default with respect to any Senior Indebtednesssenior indebtedness of PNC
has occurred and is continuing, or would occur as a result of such
payment on the Subordinated Debt Securities
pursuant to the Subordinated Guarantees or any retirement, purchase or other
acquisition of anysubordinated debt securities.
Because of the Subordinated Debt Securities pursuant to the
Subordinated Guarantees, permitting the holders of such Senior Indebtedness of
PNC to accelerate the maturity thereof. Except as described above,subordination provisions and the obligation of PNC to make payment under the Subordinated Guarantees will not be
affected. By reason of such subordination,pay excess
proceeds, in the event of insolvency, holders of Subordinated Guaranteessubordinated guarantees of PNC
may recover less, ratably, than holders of Senior Indebtednesssenior indebtedness of PNC and Other Guarantor Obligationsother
guarantor obligations, and may also recover
less, ratably, than holders of Existing Guarantor Subordinated Indebtednessexisting guarantor subordinated indebtedness (as
defined in the Indenture)indenture) and other creditors of PNC. (Section 3.12, 12.04,
12.05, 12.06 and 12.14)
Existing Guarantor Subordinated Indebtedness means11
13
As defined in the Guarantor's 8 1/4%
Convertible Subordinated Debentures Due 2008,indenture, the "existing guarantor subordinated
indebtedness" currently consists of:
- PNC's Convertible Subordinated
Debentures Due 2005 originally issued by Citizens Fidelity Corporation, PNC's
Guaranteeguarantee of PNC Funding's 9 7/8% Subordinated Notes Due 2001,
and
CCNB
Corporation's 10.55% Equity Commitment Notes Due 1998 assumed by PNC Funding and
PNC in connection with the acquisition of CCNB on October 23, 1992. (Section
1.01) At June 30, 1997, the Existing Guarantor Subordinated Indebtedness was
approximately $102.1 million.- PNC's 8.315% Junior8 1/4% Convertible Subordinated Debentures Due 2027,2008.
At August 31, 1999, $100 million and $298,000, respectively, in principal
amounts of such subordinated notes and debentures were outstanding.
As provided in the aggregate principal amountindenture, in the event of $300 million, issued on May 12, 1997
would beinsolvency of PNC, the
holders of the subordinated guarantees are subject to an obligation to pay any
excess proceeds to creditors in respect of any unpaid other guarantor
obligations (as defined in the Debt Securities and the Existing Guarantor
Subordinated Indebtedness.
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PNC's obligations under the Subordinated Guarantees shallindenture).
The subordinated guarantees will also rank pari passuequally in right of payment with
each otherPNC's guarantee of the following subordinated notes of PNC Funding:
- 6 7/8% Subordinated Notes Due 2003,
- 6 1/8% Subordinated Notes Due 2003,
- 7 3/4% Subordinated Notes Due 2004,
- 6 7/8% Subordinated Notes Due 2007,
- 6 1/2% Subordinated Notes Due 2008, and
- 6 1/8% Subordinated Notes Due 2009.
As with holders of the Existing Guarantor Subordinated
Indebtedness,subordinated guarantees, the holders of such
guarantees of the subordinated notes of PNC Funding are subject to the obligations of the Holders of Subordinated
Guaranteesan obligation
to pay over any Excess Proceedsexcess proceeds to creditors in respect of Other
Guarantor Obligations as providedany unpaid other guarantor
obligations. Therefore, in the Indenture. (Section 12.14)
Since PNC is a holding company separate from its subsidiaries, the rightsevent of insolvency of PNC, to shareholders of the
subordinated guarantees will recover the same, ratably, as holders of PNC's
guarantees of such subordinated notes of PNC Funding.
EFFECT OF SUBORDINATION PROVISIONS
By reason of the subordination provisions described above and as described
more fully in the distribution of the assets of any subsidiary upon the
subsidiary's liquidation, reorganization or otherwise will be subject to the
prior claims of the subsidiary's creditors (includingapplicable prospectus supplement, in the caseevent of any bank
subsidiary, its depositors), except to the extent thatinsolvency
of PNC Funding, holders of subordinated notes may itself be a
creditor with recognized claims against the subsidiary. In addition, there are
certain regulatoryrecover less, ratably, than
holders of senior indebtedness of PNC Funding and "other company obligations."
Holders of subordinated notes may also recover less, ratably, than holders of
"existing company subordinated indebtedness" and other limitations on the paymentcreditors of dividendsPNC Funding.
Similarly, holders of subordinated guarantees may recover less, ratably, than
holders of senior indebtedness of PNC and on
loans"other guarantor obligations," and may
also recover less, ratably, than holders of "existing guarantor subordinated
indebtedness" and other transferscreditors of funds to PNC by its bank subsidiaries. See
"Supervision, Regulation and Other Matters."PNC.
CERTAIN COVENANTS
The Indentureindenture contains certain covenants that impose various restrictions
on PNC Funding and PNCus and, as a result, afford the holders of Debt Securitiesdebt securities certain
protections. Although statements have been included in this prospectus as to the
general purpose and effect of the covenants, investors must review the full text
of the covenants to be able to evaluate meaningfully evaluate the covenants.
Restriction on Sale or Issuance of Voting Stock of a Principal Subsidiary Bank
The covenant described below is designed to ensure that, for so long as any
Senior Debt Securitiessenior debt securities are issued and outstanding, PNC will continue directly or
indirectly to own and thus serve as the holding
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company for its Principal
Subsidiary Banks (defined as"principal subsidiary banks." When we use the term "principal
subsidiary banks," we mean each of (i)of:
- PNC Bank,
(ii)- any other Subsidiary
Banksubsidiary bank the consolidated assets of which constitute
20% or more of the consolidated assets of PNC and its subsidiaries,
(iii)- any other Subsidiary Banksubsidiary bank designated as a Principal Subsidiary Bankprincipal subsidiary bank by
the board of directors of PNC, or
(iv)- any Subsidiarysubsidiary that owns any Voting Sharesvoting shares or certain rights to
acquire Voting
Sharesvoting shares of any Principal Subsidiary Bank,principal subsidiary bank, and their
respective successors, provided any such successor is a Subsidiary Banksubsidiary
bank or a Subsidiary,subsidiary, as appropriate). Principal Subsidiary Banks, inappropriate.
As of the past, have provideddate hereof, our only principal subsidiary bank is PNC income
in the form of dividends. See "Supervision, Regulation and Other Matters."Bank.
The Indentureindenture prohibits PNC, unless debtholder consent is obtained from the
holders of Senior Debt Securities, from (i)senior debt securities, from:
- selling or otherwise disposing of, and permitting a Principal Subsidiary Bankprincipal
subsidiary bank to issue, Voting Sharesvoting shares or certain rights to acquire
Voting Sharesvoting shares of a Principal Subsidiary Bank, (ii)principal subsidiary bank,
- permitting the merger or consolidation of a Principal Subsidiary Bankprincipal subsidiary bank
with or into any other corporation, or
(iii)- permitting the sale or other disposition of all or substantially all
the assets of any Principal Subsidiary Bank,principal subsidiary bank, if after giving effect to
any one of such transactions and the issuance of the maximum number of
Voting Sharesvoting shares issuable upon the exercise of all such rights to acquire
Voting
Sharesvoting shares of a Principal Subsidiary Bank,principal subsidiary bank, PNC would own directly
or indirectly less than 80% of the Voting Sharesvoting shares of such Principal Subsidiary Bank, with the
following exceptions: (i)principal
subsidiary bank. This restriction does not apply to:
-- transactions required by any law, or any regulation or order of
any governmental authority;
(ii)-- transactions required as a condition imposed by any governmental
authority to the acquisition by PNC, directly or indirectly, or
any other corporation or entity if thereafter,
(a)- PNC would own at least 80% of the Voting Sharesvoting shares of suchthe other
corporation or entity,
(b)- the Consolidated Banking Assetsconsolidated banking assets of PNC would be at least
equal to those prior thereto, and
(c)- the board of directors of PNC shall have designated suchthe other
corporation or entity a Principal Subsidiary Bank; (iii)principal subsidiary bank;
-- transactions that do not reduce the percentage of Voting Sharesvoting shares
of such Principal Subsidiary Bankprincipal subsidiary bank owned directly or indirectly
by PNC; and
(iv)-- transactions where the proceeds are invested within 180 days
after such transaction in any one or more Subsidiary Banks. However,subsidiary banks.
The indenture, however, does permit the Indenture permitsfollowing:
- the merger of a Principal
Subsidiary Bankprincipal subsidiary bank with and into a Principal Subsidiary Bankprincipal
subsidiary bank or PNC,
- the consolidation of Principal Subsidiary Banksprincipal subsidiary banks into a Principal Subsidiary Bankprincipal
subsidiary bank or PNC, or
- the sale or other disposition of all or substantially all of the
assets of any Principal Subsidiary Bankprincipal subsidiary bank to another Principal Subsidiary Bankprincipal
subsidiary bank or PNC,
if, in any such case in which the surviving, resulting or acquiring entity is
not PNC, PNC would own, directly or indirectly, at least 80% of the Voting
Sharesvoting
shares of the Principal Subsidiary Bankprincipal subsidiary bank surviving such merger, resulting from
such consolidation or acquiring such assets. (Section 5.06)
12.
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Ownership of PNC Funding
The Indentureindenture contains a covenant that, so long as any of the Debt
Securitiesdebt
securities are outstanding, and subject to certain rights described below under
"Consolidation or Merger," PNC will continue to own, directly or indirectly,
all of the outstanding voting shares of PNC Funding. (Section 5.07).
Restriction on Liens
The purpose of the restriction on liens covenant is to preserve PNC's
direct or indirect interest in Voting Sharesvoting shares of Principal Subsidiary Banksprincipal subsidiary banks free
of security interests of other creditors. The covenant permits certain specified
liens and liens where the Senior Debt Securitiessenior debt securities are equally secured. The
Indentureindenture prohibits PNC and its subsidiaries from creating or permitting any
liens (other than certain tax and judgment liens) upon Voting Sharesvoting shares of any
Principal Subsidiary Bankprincipal subsidiary bank to secure indebtedness for borrowed money without
making effective provision wherebyunless the
Senior Debt Securities shall besenior debt securities are equally and ratably secured, except thatsecured. Notwithstanding this
prohibition, PNC may create or permit (i)the following:
- purchase money liens and liens on Voting Sharesvoting shares of any Principal Subsidiary Bankprincipal
subsidiary bank existing at the time such Voting Sharesvoting shares are acquired
or created within 120 days thereafter;
(ii)- the acquisition of any Voting Sharesvoting shares of any Principal Subsidiary Bankprincipal subsidiary bank
subject to liens at the time of acquisition or the assumption of
obligations secured by a lien on such Voting Shares; (iii)voting shares;
- under certain circumstances, renewals, extensions or refunding of the
liens described in (i)the two preceding bullets; and
(ii) above;
and (iv)- liens to secure loans or other extensions of credit under Section 23A
of the Federal Reserve Act or any successor or similar federal law or
regulation. (Section 5.08).
Consolidation or Merger
The covenant described below protects the holders of Debt Securitiesdebt securities upon
certain transactions involving PNC Funding or PNC by requiring any successor to
PNC Funding or PNC to assume the predecessor's obligations under the Indenture,
andindenture.
In addition, the covenant prohibits transactions that would result in an Eventevent
of Default,default, a Defaultdefault or an event which could become an Eventevent of Defaultdefault or
Defaultdefault under the Indenture.indenture. PNC Funding or PNC may consolidate with, merge
into, or transfer substantially all of its properties to, any other corporation
organized under the laws of any domestic jurisdiction, provided thatif:
- the successor corporation assumes all obligations of PNC Funding or
PNC, as the case may be, under the Debt Securitiesdebt securities and the Guaranteesguarantees
and under the Indenture, thatindenture;
- immediately after giving
effect to the transaction, no Eventevent of Defaultdefault or Default,default, and
no event which, after notice or lapse of time, would become an Eventevent
of Defaultdefault or Default,
shall have occurreddefault, exists; and
be continuing, and that- certain other conditions are met. (Sections 10.01 and 10.03)
Except as may be disclosed in.
The indenture does not limit our ability to enter into a Prospectus Supplement and other than the
restrictions on liens on Voting Shares of Principal Subsidiary Banks and on
certain dispositions of Principal Subsidiary Banks described above, the
Indenture and the Debt Securities do not containhighly leveraged
transaction or provide you with any covenants or other
provisions designed to afford holders of the Debt Securitiesspecial protection in the event of such a
highly leveraged transaction involving PNC.transaction.
MODIFICATION AND WAIVER
Modifications of the Indenture may be made by PNC Funding, PNCWe and the Trusteetrustee may modify the indenture with the consent of the Holdersholders
of the majority in aggregate principal amount of Outstanding Debt Securitiesoutstanding debt securities of
each series affected thereby; provided,
however, that no such modification may,thereby. However, the following modifications and
amendments will not be effective against any holder without the consent of the Holder of
each Outstanding Debt Security affected thereby: (i)its consent:
- change the Maturity of the
principal of, or the stated Maturitymaturity of any installmentpayment of interest on, any such
Debt Security; (ii)principal or interest;
- reduce the principal amount of, or the premium, if any, or the
interest on such Debt Security (including, indebt security;
- reduce the caseportion of the principal amount of an Original Issue
Discount Security, the amountoriginal issue
discount debt security, payable upon acceleration of the maturity thereof); (iii)of
that debt security;
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- change the place or places where, or the currency of payment of principal ofin which, any debt
security or any premium if any, or interest on any such Debt Security; (iv)is payable;
- impair the right of a holder to institute suit for the enforcement of
any payment on or with respect to any such Debt Security; (v)debt security;
- reduce the aforesaid percentage in principal amount of Outstanding Debt Securities of any seriessecurities debt
securities necessary to modify the Indentureindenture or the percentage in
principal amount of Outstanding Debt Securitiesoutstanding debt securities necessary for
any waiver ofto waive
compliance with conditions and defaults thereunder;under the indenture; or
(vi)- modify or affect the terms and conditions of the guarantees in any
manner adverse to a Holder the terms and conditions of the
Guarantees.holder. (Section 9.02)
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15
Modification and amendment of the Indenture may be made by PNC Funding,
PNC,.
We and the Trusteetrustee may modify and amend the indenture without the consent
of any Holderholder of Debt Securitiesdebt securities for any of the following purposes:
(i)- to evidence the succession of another corporation to PNC Funding or
PNC;
(ii)- to provide for the acceptance of appointment of a successor Trustee; (iii)trustee;
- to add to the covenants of PNC Funding or PNC for the benefit of the
Holdersholders of Debt Securities; (iv)debt securities;
- to cure any ambiguity, defect or inconsistency in the Indenture, providedindenture, if
such action does not adversely affect the Holdersholders of Debt Securitiesdebt securities
in any material respect;
(v)- to secure the Debt Securitiesdebt securities under applicable provisions of the
Indenture; (vi)indenture;
- to establish the form or terms of Debt Securities; (vii)debt securities;
- to permit the payment in the United States of principal, premium or
interest on Unregistered
Securities;unregistered securities; or
(viii)- to provide for the issuance of uncertificated Debt
Securitiesdebt securities in place
of certificated Debt Securities.debt securities. (Section 9.01)
The Holders.
In addition, the holders of a majority in principal amount of Outstanding Debt
Securitiesoutstanding
debt securities of any series may, waive, insofar ason behalf of all holders of that series,
is concerned,waive compliance with certain covenants, including those described under the
captions above entitled "Restriction on Sale or Issuance of CapitalVoting Stock of a
Principal Subsidiary Bank," "Ownership of PNC Funding" and "Restriction on
Liens." (Section 5.09). No waiver by the Holdersholders of any series of Subordinated Debt
Securitiessubordinated
debt securities is required with respect to the covenant described under the
caption above entitled "Restriction on Sale or Issuance of Voting Stock of a
Principal Subsidiary Bank." (Section 5.10). Covenants concerning the payment of
principal, premium, if any, and interest on the Debt Securities,debt securities, compliance with
the terms of the Indenture,indenture, maintenance of an agency and certain monies held in
trust, may only be waived pursuant to a supplemental indenture executed with the
consent of each Holderaffected holder of Debt Securities affected by such waiver.debt securities. The covenant concerning
certain reports required by federal law may not be waived.
EVENTS OF DEFAULT, DEFAULTS, WAIVERS
The Indentureindenture defines an Eventevent of Defaultdefault with respect to any series of
Senior Debt Securitiessenior debt securities as being any one of the following events and such other
event as may be established for the Debt Securitiesdebt securities of a particular series:
(i)
default- failure to pay interest on such series for 30 days inafter the payment
of interest on such series; (ii) default in
any payment ofis due;
- failure to pay the principal of or premium, if any, on such series; (iii) default in
the payment ofseries
when due;
- failure to deposit any sinking fund installmentpayment with respect to such
series; (iv)
default for 90 days after appropriate notice in performance ofseries when due;
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17
- failure to perform any other covenant or warranty in the Indenture (other than a covenant or warranty
includedindenture
that applies to such series for 90 days after we have received written
notice of the failure to perform in the Indenture solely formanner specified in the
benefit of a series of Debt Securities
other than that series); (v)indenture;
- the occurrence of certain events relating to bankruptcy, insolvency or
reorganization of PNC, PNC Fundingeither of us or any Principal
Subsidiary Bank;principal subsidiary bank; or
(vi)- any other Eventevent of Default provideddefault specified in the supplemental indenture
under which such Senior Debt Securitiessenior debt securities are issued. (Section 7.01(a)).
The Indentureindenture defines an Eventevent of Defaultdefault with respect to any series of
Subordinated Debt Securitiessubordinated debt securities as certain events involving the bankruptcy or
reorganization of PNC or any Principal Subsidiary Bank.principal subsidiary bank, or any other event of
default specified in the supplemental indenture under which such subordinated
debt securities are issued or in the form of securities for such series. There
is no right of acceleration in the case of events involving the bankruptcy,
insolvency or reorganization of PNC Funding or of a default in the payment of
principal, interest, premium, if any, or any sinking fund payment with respect
to a series of Subordinated Debt Securitiessubordinated debt securities or in the case of a default in the
performance of any other covenant of PNC Funding or PNC in the Indenture.indenture.
Accordingly, payment of principal of any series of subordinated debt may be
accelerated only in the case of the bankruptcy or reorganization of PNC or any
principal subsidiary bank.
The Indentureindenture defines a Defaultdefault with respect to any series of Subordinated Debt Securities assubordinated
debt securities as:
- any of the items listed in (i) through (iv)the first four bullets above as events of
the above paragraph,default with respect to senior debt securities,
- events involving the bankruptcy, insolvency or reorganization of PNC
Funding, and
- such other Defaultdefault as may be established for the Subordinated Debt Securitiessubordinated debt
securities of a particular series. (Section 7.01(c)).
A breach of the covenant described under the caption above entitled "Restriction
on Sale or Issuance of Voting Stock of a Principal Subsidiary Bank" will not
result in a default with respect to any Seriesseries of Subordinated Debt Securities.subordinated debt securities.
(Sections 7.01(b) and (c))
In case.
If an Eventevent of Default shall occurdefault occurs and beis continuing with respect to any series
of Debt Securities,debt securities, either the Trusteetrustee or the Holdersholders of not less
thanat least 25% in
principal amount of Outstanding Debt Securitiesoutstanding debt securities of that series may declare the
principal of such series (or if Debt Securitiesdebt securities of that series are Original Issue Discount Securities, such portionoriginal
issue discount securities, a specified amount of the principal as may be
specified in the terms of that series)principal) to be due and
payable immediately. At any
time after a declaration of acceleration has been made but before a judgment or
decree for payment of money due has been obtained bySubject to certain conditions, the Trustee, the Holders of
a majority in principal
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amount of the Outstanding Debt Securities of such series may rescind any
declaration of acceleration and its consequences, if all payments due (other
than those due as a result of acceleration) have been made and all Events of
Default and Defaults have been remedied or waived. Any Event of Default or
Default with respect to a particular series of Debt Securities may be waived by
the Holdersholders of a majority in
principal amount of the Outstanding Debt Securitiesoutstanding debt securities of such series except in each casemay rescind
such declaration and waive certain defaults. Prior to any declaration of
acceleration, the holders of a failure to paymajority in principal amount of the outstanding
debt securities of the applicable series may waive any past default or premium, if any,event of
default, except a payment default, or interest on,a past default or any sinking fund installment in respectevent of such Debt Securities ordefault in
respect of a covenant or provision of the Indentureindenture which cannot be modified
without the consent of the Holderholder of each Outstanding
Debt Securityoutstanding debt security affected.
(Sections 7.02, 7.08 and 7.13)
Subject to.
Other than its duties in the provisionscase of the Indenture relating to the dutiesan event of the
Trustee in case an Event of Defaultdefault or a Default shall occur and be continuing,default, the
Trustee will be under no obligationtrustee is not obligated to exercise any of the rights or powers in the
Indentureindenture at the request or direction of Holdersholders of Debt Securities,debt securities, unless such
Holders shall have offered toholders offer the Trusteetrustee reasonable security or indemnity. SubjectIf reasonable
indemnification is provided, then, subject to such provisions for indemnification and certain
limitations contained in the Indenture,other rights of the Holderstrustee,
the holders of a majority in principal amount of the Outstanding Debt Securitiesoutstanding debt securities
of any series shall have the right tomay direct the time, method and place of conducting any proceeding
for any remedy available to the Trusteetrustee with respect to Debt Securitiesdebt securities of such
series. (Sections 8.03 and 7.12).
The Indentureindenture provides that in the event of a payment default of 30 days
in the
payment of interest upon any Debt Security of any series, or defaults in the
payment of any principal of or premium, if any, or any sinking fund installment
with respect to any Debt Securitiesdebt securities of any series, PNC Funding will, upon demand
of the Trustee,trustee, pay to it, for the benefit of the Holderholder of any such Debt
Securitydebt
security the whole amount then due and payable on such Debt Securitydebt security for
principal and interest. The Indenture,indenture, as amended, further provides that if PNC
Funding fails to pay such
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amount forthwithimmediately upon such demand, the Trusteetrustee may, among other things,
institute a judicial proceeding for the collection thereof.its collection. (Section 7.03).
The Indentureindenture requires PNC Funding and PNCus to file withfurnish annually to the Trustee, on an
annual basis,trustee certificates
as to the absence of any default and as to compliance
withunder the terms of the Indenture.indenture. The Indenture provides that the Trusteetrustee may withhold
notice to the Holdersholders of Debt Securitiesdebt securities of any default (except in payment of
principal, premium, if any, interest or sinking fund installment) if the Trustee considers ittrustee
determines that the withholding of the notice is in the interest of the Holders of Debt Securities to do
so.those
holders. (Sections 5.04 and 8.02)
No Holder.
The holder of any Debt Securitydebt security of any series will have any right tomay institute any proceeding
with respect to the Indentureindenture or for any remedy thereunder unless such Holder shall haveif:
- a holder previously has given to the Trusteetrustee written notice of a
continuing Eventevent of Defaultdefault or Defaultdefault with respect to Debt
Securitiesdebt securities
of that series and unlessseries;
- the Holdersholders of at least 25% in principal amount of the Outstanding Debt Securitiesoutstanding
debt securities of that series shall have made a written request, and
offered reasonable indemnity, to the Trusteetrustee to institute such
proceeding asproceeding;
- the trustee and the Trustee shallhas not have received directions inconsistent with such request
from the Holdersholders of a majority in principal amount of the Outstanding Debt Securitiesoutstanding
debt securities of that series a direction inconsistent with such requestseries; and
shall have failed to
institute- the trustee has not started such proceeding within 60 days.days after
receiving the request.
However, the Holderholder of any Debt
Securitydebt security will have an absolute right to
receive payment of the principal of, and premium, if any, and interest on such
Debt Security on thedebt security when due dates expressed
in such Debt Security and to institute suit for the enforcement ofto enforce any such payment.
(Sections 7.07 and 7.08).
DEFEASANCE
Except as may otherwise be provided in any applicable prospectus
supplement, the applicable Prospectus Supplement
with respect to the Debt Securities of any series, the Indentureindenture provides that PNC Funding and PNC shallwe will be discharged from theirour
obligations under the Debt
Securitiesdebt securities of a series at any time prior to the
Stated Maturitystated maturity or redemption thereof when (a) PNC Funding or PNC haswe have irrevocably deposited in
trust with the Trustee,trustee money and/or government securities which through the
payment of principal and interest in trust, (i)accordance with their terms will provide
sufficient funds, without reinvestment, to payrepay in full the principal of (and premium, if any),
and interest to Stated Maturity (or redemption) on, the Debt Securities of such
series, or (ii) such amount of governmentdebt securities as will, together with the
predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay when due the principal of, and
premium, if any, and interest to Stated Maturity (or redemption) on, the Debt
Securities of such series, and (b) PNC Funding or PNC has paid all other sums
payable with respect to the
15
17
Debt Securities of
such series. Deposited funds shallwill be in the currency or currency unit in which
the Debt Securitiesdebt securities are denominated. Deposited government securities shallwill be
direct obligations of, or obligations the principal of and interest on which are
fully guaranteed by, the government which issued the currency in which the Debt Securitiesdebt
securities are denominated, and which are not subject to prepayment, redemption
or call. Upon such discharge, the Holdersholders of the Debt
Securitiesdebt securities of such series
shallwill no longer be entitled to the benefits of the Indenture,indenture, except for the
purposes of registration of transfer and exchange of the Debt Securitiesdebt securities of such
series, and replacement of lost, stolen or mutilated Debt Securities,debt securities, and shallmay
look only to such deposited funds or obligations for payment. (Sections 11.01
and 11.02).
For federal income tax purposes, the deposit and discharge may, depending
on a variety of factors, result in a taxable gain or loss being recognized by
the Holdersholders of the affected Debt Securities. Prospective investorsdebt securities. You are urged to consult theiryour own
tax advisers as to the specific consequences of such a deposit and discharge,
including the applicability and effect of tax laws other than federal income tax
laws.
GLOBAL SECURITIES
The Debt SecuritiesWe may issue the debt securities of a series may be issued in whole or in part in the
form of a global security ("Global Security") that will be deposited with or on
behalf, of, a depositary (the "Depositary").depositary. Such
Depositarydepositary will be The Depository Trust Company ("DTC"), unless otherwise
identified in the Prospectus
Supplementprospectus supplement relating to such series. A Global Securityglobal
security may be issued as either a Registeredregistered or Unregistered Securityunregistered security and in
either temporary or permanent form. Unless and until it is exchanged in whole or
in part for individual certificates evidencing Debt Securitiesdebt securities in definitive
form represented thereby, a Global
Securityglobal security may not be transferred except as a
whole by the
Depositary17
19
depositary for such Global Securityglobal security or any nominee thereof to a successor of
such Depositarydepositary or a nominee of such successor. (Section 2.05).
If DTC is the Depositarydepositary for a series of Debt Securities,debt securities, such series will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully-registered Global Securityfully registered global security will be issued
for such series of Debt Securities,debt securities, in the aggregate principal amount of such
series, and will be deposited with DTC. If, however, the aggregate principal
amount of such series of Debt Securitiesdebt securities exceeds $200 million, one Global
Securityglobal
security will be issued with respect to each $200 million of principal amount
and an additional Global Securityglobal security will be issued with respect to any remaining
principal amount of such series.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participantsparticipants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants'participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participantsparticipants
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is owned by a number of its
Direct Participantsdirect participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant,direct participant, either directly or indirectly ("Indirect Participants"indirect
participants"). The rules applicable to DTC and its Participantsparticipants are on file
with the Commission.SEC.
Purchases of a series of Debt Securitiesdebt securities under the DTC system will need to
be made by or through Direct Participants,direct participants, which will receive a credit for the
Debt Securitiesdebt securities on DTC's records. The ownership interest of each actual
purchaser of each Debt Securitydebt security ("Beneficial Owner"beneficial owner") is in turn to be recorded
on the Direct Participants'direct participants' and Indirect Participants'indirect participants' records. Beneficial
Ownersowners will not receive written confirmation from DTC of their purchase, but
Beneficial Ownersbeneficial owners are expected to receive written confirmations providing
details of the transaction, as well as provide periodic statements of their
holdings, from the Direct Participantsdirect participants or Indirect Participantsindirect participants through which
the Beneficial Ownerbeneficial owner entered into the transaction. Transfers of ownership
interests in the Debt Securitiesdebt securities are to be accomplished by entries made on the
books of the Participantsparticipants acting
16
18 on behalf of beneficial owners. Beneficial
Owners. Beneficial Ownersowners will not receive certificates representing their ownership interest in
the Global Securityglobal security or Global
Securities,global securities, except in the event that use of the
book-entry system for such Debt
Securitiesdebt securities is discontinued.
To facilitate subsequent transfers, all Global Securitiesglobal securities deposited by
Participantsparticipants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Global Securitiesglobal securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has advised
PNC and PNC Fundingus that DTC will have no knowledge of the actual Beneficial
Ownersbeneficial owners of the Global Securities,global
securities, and that DTC's records reflect only the identity of the Direct Participantsdirect
participants to whose accounts Global Securitiesglobal securities are credited, which may or may
not be the Beneficial Owners.beneficial owners. Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants,direct
participants, by Direct Participantsdirect participants to Indirect Participantsindirect participants and by Direct
Participantsdirect
participants and Indirect Participantsindirect participants to Beneficial Ownersbeneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
To the extent any series of Debt Securitiesdebt securities is redeemable, redemption
notices will be sent to DTC. If less than all of the Debt Securitiesdebt securities within an
issue are being redeemed, DTC's practice is to determine by lot the amount of
the interest of each Direct Participantdirect participant in such issue to be redeemed. The
applicable Prospectus Supplementprospectus supplement for a series of Debt Securitiesdebt securities will indicate
whether such series is redeemable.
18
20
To the extent applicable, neither DTC nor Cede & Co. will consent or vote
with respect to any Global Securitiesglobal securities deposited with it. Under its usual
procedure, DTC will mail an Omnibus Proxyomnibus proxy to the issuer as soon as possible
after the record date. The Omnibus Proxyomnibus proxy assigns Cede & Co.'s consenting and
voting rights to those Direct Participantsdirect participants to whose accounts the Debt Securitiesdebt securities
are credited on the record date (identified in a listing attached to the Omnibus
Proxy)omnibus
proxy).
Principal and interest payments on the Global Securitiesglobal securities deposited with DTC
will be made to Cede & Co., as nominee of DTC. DTC's practice is to credit
Direct Participants'direct participants' accounts, upon DTC's receipt of funds and corresponding
detail information from the issuer, on the payable date in accordance with their
respective holdings shown on DTC's records. Payments by Participantsparticipants to
Beneficial Ownersbeneficial owners will be governed by standing instructions and customary
practices, as in the case with securities held for the accounts of customers
registered in "street name", and will be the responsibility of such Participantparticipant
and not DTC or PNC Funding, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal and interest to Cede
& Co. will be the responsibility of the Trustee,trustee, who unless otherwise indicated
in the applicable Pricing Supplement,pricing supplement, will be PNC Funding's paying agent,
disbursements of such payments to Direct Participantsdirect participants will be the responsibility
of DTC, and disbursements of such payments to Beneficial Ownersbeneficial owners will be the
responsibility of Direct Participantsdirect participants and Indirect Participants.indirect participants. None of PNC
Funding, PNC, the Trustee,trustee, any paying agent, or the registrar for the Debt
Securitiesdebt
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 Securityglobal security or Global Securitiesglobal securities for any series of Debt
Securitiesdebt
securities or for maintaining, supervising or reviewing any records relating to
such beneficial interests.
If DTC is at any time unwilling, unable or ineligible to continue as the
Depositarydepositary and a successor depositary is not appointed by PNC Funding within 90
days, PNC Funding will issue certificated Debt Securitiesdebt securities for each series in
definitive form in exchange for each Global Security.global security. If PNC Funding determines
not to have a series of Debt Securitiesdebt securities represented by a Global Security,global security, which
it may do, it will issue certificated Debt Securitiesdebt securities for such series in
definitive form in exchange for the Global Security.global security. In either instance, a
Beneficial Ownerbeneficial owner will be entitled to physical delivery of certificated Debt
Securitiesdebt
securities for such series in definitive form equal in principal amount to such
Beneficial Owner'sbeneficial owner's beneficial interest in the Global Securityglobal security and to have such
certificated Debt Securitiesdebt securities for such series registered in such Beneficial
Owner'sbeneficial
owner's name. Certificated Debt Securitiesdebt 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.
17
19
Any other or differing terms of the depositary arrangement will be
described in the Prospectus Supplementprospectus supplement relating to a series of Debt Securities.debt securities.
REGARDING THE TRUSTEE
In the ordinary course of business, PNC Funding and PNCwe may maintain lines of credit with
one or more Trusteestrustees for a series of Debt Securitiesdebt securities and the Banksprincipal
subsidiary banks and other subsidiary banks may maintain deposit accounts and
conduct other banking transactions with one or more Trusteestrustees for a series of
Debt Securities.debt securities.
TRUSTEE'S DUTY TO RESIGN UNDER CERTAIN CIRCUMSTANCES
PNC Funding may issue both Seniorsenior and Subordinated Debt Securitiessubordinated debt securities under
the Indenture.indenture. Because the Subordinated Debt Securitiessubordinated debt securities will rank junior in
right of payment to the Senior Debt Securities,senior debt securities, the occurrence of a default
under the Indentureindenture with respect to the Subordinated Debt Securitiessubordinated debt securities or any
Senior Debt Securitiessenior debt securities could create a conflicting interest under the Trust
Indenture Act of 1939, as amended, ("1939 Act"), with respect to any Trusteetrustee who serves as
trustee for both Seniorsenior and Subordinated Debt Securities.subordinated debt securities. In addition, upon the
occurrence of a default under the Indentureindenture with respect to any series of Debt Securitiesdebt
securities the Trusteetrustee of which maintains banking relationships with PNC Funding
or PNC, such Trusteetrustee would have a conflicting interest under the 1939Trust Indenture
Act as a result of such business relationships. If a default has not been cured
or waived within 90 days after the Trusteetrustee has or acquires a conflicting
interest, the
Trustee19
21
trustee generally is required by the 1939Trust Indenture Act to eliminate such
conflicting interest or resign as Trusteetrustee with respect to the Subordinated Debt
Securitiessubordinated debt
securities or the Senior Debt Securities.senior debt securities. In the event of the Trustee'strustee's
resignation, PNC Funding and/or PNC shallwe will promptly appoint a successor trustee with respect to the
affected securities.
DESCRIPTION OF COMMON STOCK
As of the date of the prospectus, PNC is authorized to issue 450,000,000
shares of Common Stock.common stock. At June 30,
1997, there were 306,976,545August 31, 1999, PNC had 294,557,603 shares of Common Stockcommon
stock issued and outstanding and 40,407,60058,265,164 shares held in treasury.
For a descriptionThe following summary is not complete. You should refer to the applicable
provisions of authorized andPNC's certificate of incorporation, including the certificates of
designation pursuant to which the outstanding series of preferred stock were
issued and outstanding sharesto the Pennsylvania Business Corporation Law for a complete statement
of Preferred Stockthe terms and rights of PNC, see "Description of Preferred
Stock--General."the common stock.
Holders of Common Stockcommon stock are entitled to one vote per share on all matters
submitted to shareholders. Holders of Common Stockcommon stock have neither cumulative
voting rights nor any preemptive rights for the purchase of additional shares of
any class of stock of PNC, and are not subject to liability for further calls or
assessments. The Common Stockcommon stock does not have any sinking fund, conversion or
redemption provisions.
Holders of Common Stock are entitled tocommon stock may receive such dividends as may bewhen declared by the Board of
Directors of PNC out of funds legally available therefor.to pay dividends. The Board of
Directors may not pay or set apart dividends on Common
Stockcommon stock until dividends for
all past dividend periods on any series of outstanding preferred stock have been
paid or declared and set apart for payment.
PNC currently has outstanding $300 million of 8.315% Junior Subordinated
Debentures Due 2027 and $200 million of Floating Rate Junior Subordinated
Debentures Due 2028. The terms of these debentures permit PNC to defer interest
payments on the debentures for up to five years. If PNC defers interest payments
on these debentures, PNC may not during the deferral period:
- declare or pay any cash dividends on any of its common stock;
- redeem any of its common stock;
- purchase or acquire any of its common stock; or
- make a liquidation payment on any of its common stock.
In the event of dissolution or winding up of the affairs of PNC, holders of
Common Stockcommon stock will be entitled to share ratably in all assets remaining after
payments to all creditors and payments required to be made in respect of
outstanding preferred stock (including accrued and unpaid dividends thereon).
The Board of Directors of PNC may, except as otherwise required by
applicable law, cause the issuance of authorized shares of Common Stockcommon stock without
shareholder approval to such persons and for such consideration as the Board of
Directors may determine in connection with acquisitions by PNC or for other
corporate purposes.
The Chase Manhattan Bank, New York, New York, is the transfer agent and
registrar for PNC's Common Stock.common stock. The shares of Common Stockcommon stock are listed on the
New York Stock Exchange under the symbol "PNC"."PNC." The outstanding shares of Common
Stockcommon
stock are, and the shares offered hereby will be, validly issued, fully paid and
nonassessable and the holders thereofof the common stock are not and will not be
subject to any liability as shareholders.
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2022
DESCRIPTION OF PREFERRED STOCK
This section describes the general terms and provisions of PNC's preferred
stock that may be offered by this prospectus. The prospectus supplement will
describe the specific terms of the series of the preferred stock offered through
that prospectus supplement and any general terms outlined in this section that
will not apply to that series of preferred stock.
We have summarized the material terms and provisions of the preferred stock
in this section. We have also filed PNC's articles of incorporation and the form
of certificate of preferred stock, which we will refer to as the "certificate of
designations" as exhibits to the registration statement. You should read PNC's
articles of incorporation and the certificate of designations relating to the
applicable series of the preferred stock for additional information before you
buy any preferred stock.
GENERAL
The Board of Directors of PNC (the "PNC Board"board") is authorized without
further shareholder action to cause the issuance, as of June 30, 1997,August 31, 1999, of up
to 10,662,800 additional shares of Preferred Stock, and such Preferred Stockpreferred stock. Such preferred stock may be
issued in one or more series, each with such preferences, limitations,
designations, conversion rights, voting rights, dividend rights, voluntary and
involuntary liquidation rights and other rights as the PNC Boardboard may determine
at the time of issuance.
Under such authority, PNC has previously designated six series of preferred
stock, of which, at June 30, 1997, five series were outstanding, including:
16,048 shares of $1.80 Cumulative Convertible Preferred Stock, Series A
("Preferred Stock-A"); 4,452 shares of $1.80 Cumulative Convertible Preferred
Stock, Series B ("Preferred Stock-B"); 319,865 shares of $1.60 Cumulative
Convertible Preferred Stock, Series C ("Preferred Stock-C"); 432,310 shares of
$1.80 Cumulative Convertible Preferred Stock, Series D ("Preferred Stock-D");
and 6,000,000 shares of Fixed/Adjustable Rate Noncumulative Preferred Stock,
Series F ("Preferred Stock-F"). All shares of a former series of Preferred
Stock, designated as $2.60 Cumulative NonVoting Preferred Stock, Series E, have
been redeemed and restored to the status of authorized but unissued Preferred
Stock. See "Description of Preferred Stock--Preferred Stock Currently
Outstanding" below.
The rights of the holders of PNC's Common Stockcommon stock are subject to any rights
and preferences of such outstanding series of Preferred Stock,preferred stock, and the Preferred
Stock hereinpreferred
stock offered andin this prospectus. In addition, those rights would be subject to
the rights and preferences of any additional shares of Preferred Stock,preferred stock, or any
series thereof, which might be issued in the future.
The existence of authorized but unissued Preferred Stockpreferred stock could have the
effect of discouraging an attempt to acquire control of PNC. For example,
Preferred Stockpreferred stock could be issued to persons, firms or entities known to be
friendly to management.
PNC currently has outstanding $300 million of 8.315% Junior Subordinated
Debentures Due 2027 and $200 million of Floating Rate Junior Subordinated
Debentures Due 2028. The terms of these debentures permit PNC to defer interest
payments on the debentures for up to five years. If PNC defers interest payments
on these debentures, PNC may not during the deferral period:
- declare or pay any cash dividends on any of its preferred stock;
- redeem any of its preferred stock;
- purchase or acquire any of its preferred stock; or
- make a liquidation payment on any of its preferred stock.
PREFERRED STOCK OFFERED HEREIN
General
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. The particular terms of any series of
Preferred Stock offered by any Prospectus Supplement and the extent, if any, to
which such general provisions may apply to the Preferred Stock so offered will
be described in the Prospectus Supplement relating to such Preferred Stock. 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 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 Designation of Series
relating to the Preferred Stock the form of which is incorporated by reference
as Exhibit 4.4 to the Registration Statement of which this Prospectus is a part
and the definitive form of which will be filed with the Commission.
The Preferred Stockpreferred stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the applicable Prospectus Supplement,prospectus supplement, the shares of each
series of Preferred Stockpreferred stock will upon issuance rank on a parity in all respects
with PNC's currently existing series of Preferred Stock,preferred stock, described below, and
each other then outstanding series of preferred stock of PNC.PNC outstanding at that time. Holders of
the Preferred Stockpreferred stock will have no preemptive rights to subscribe for any
additional securities whichthat may be issued by PNC. Unless otherwise specified in
the applicable Prospectus Supplement,prospectus supplement, The Chase Manhattan Bank, New York, New
York, will be the transfer agent and registrar for the Preferred Stock.preferred stock.
Because PNC is a holding company, its rights and the rights of holders of
its securities, including the holders of Preferred Stock,preferred stock, to participate in the
assets of any PNC subsidiary upon the latter'sits liquidation or recapitalization will be
subject to the prior claims of such subsidiary's creditors and preferred
shareholders,
1921
2123
except to the extent PNC may itself be a creditor with recognized claims against
such subsidiary or a holder of preferred shares of such subsidiary.
See
"Supervision, Regulation and Other Matters"
PNC may at its option, elect to offer Depositary Shares ("Depositary
Shares")depositary shares evidenced by depositary receipts ("Depositary Receipts"),receipts.
If PNC so elects, each representingdepositary share will represent a fractional interest (to
be specified in the Prospectus Supplementprospectus supplement relating to the particular series of
Preferred Stock)preferred stock) in a share of a particular series of the Preferred Stockpreferred stock issued
and deposited with a Depositarydepositary (as defined below). See "Description of
Depositary Shares" below.
Dividends
The holders of the Preferred Stockpreferred stock will be entitled to receive when, as
anddividends,
if declared by the Board of Directors of PNC board or a duly authorized committee thereof, out of funds legally available therefor,thereof. The
applicable prospectus supplement will specify the dividend rate and dates on
which dividends at such rates and on
such dates as will be specified in the applicable Prospectus Supplement. Such
ratespayable. The rate may be fixed or variable or both. If
the dividend rate is variable, the applicable prospectus supplement will
describe the formula used for determining the dividend rate for each dividend
periodperiod. PNC will be specified in the
applicable Prospectus Supplement. Dividends will be payablepay dividends to the holders of record as they appear on the
stock books of PNC on suchthe record dates as will be fixed by the Board of Directors of PNC board or a duly
authorized committee thereof. DividendsPNC may be paidpay dividends in the form of cash,
Preferred Stockpreferred stock (of the same or a different series) or Common Stockcommon stock of PNC, in
each case as specified in the applicable Prospectus Supplement.
Dividendsprospectus supplement.
The applicable prospectus supplement will also state whether dividends on
any series of Preferred Stock may bepreferred stock are cumulative or noncumulative, as specified in the applicable Prospectus Supplement.noncumulative. If the Board of Directors of PNC fails toboard
does not declare a dividend payable on a dividend payment date on any
Preferred Stock for which dividends are noncumulative ("Noncumulative Preferred Stock"),preferred stock, then the holders of such Preferred Stockthat preferred stock will have no rightnot
be entitled to receive a dividend in respect of thefor that dividend period, relating
to such dividend payment date, and PNC will have no
obligation to pay the dividend accrued for suchthat dividend period whether oreven if the PNC board
declares a dividend on that series payable in the future.
The PNC board will not dividends on such Preferred
Stock are declared or paid on any futuredeclare and pay a dividend payment dates.
If dividends on a particular series shall have been determined to be
cumulative, no dividends shall be paid or set apart for payment or declared on the Common Stockcommon stock or on
any class or series of stock of PNC ranking as to dividends subordinate to sucha
series of cumulative preferred stock (other than dividends payable in Common
Stockcommon
stock or in any class or series of stock of PNC ranking as to dividends and
assets subordinate to such series) and no payment shall be made or set apart for
the purchase, redemption or other acquisition for value of any shares of Common
Stock or of any class or series of stock of, until PNC ranking as to dividends or
assets subordinate to such series, untilhas paid in full dividends (to the
extent cumulative) for all past dividend periods on all outstanding shares of
such series have been
paid, or declared and set apart for payment,series. If PNC does not pay in full. In casefull dividends for any dividend period are not paid in full on
all shares of Preferred Stockpreferred stock ranking equally as to dividends, all such shares
shallwill participate ratably in the payment of dividends for suchthat period in
proportion to the full amounts of dividends to which they are respectively entitled.
Voting
Except as provided hereinin this prospectus or in the applicable Prospectus Supplement,prospectus
supplement, or as required by applicable law, the holders of Preferred Stock have only such voting
rights with regardpreferred stock
will not be entitled to matters submitted to a vote of the shareholders of PNC as
shall be fixed and determined by PNC's Board of Directors.vote. Except as otherwise required by law or provided by
the Board of DirectorsPNC board and described in the applicable Prospectus Supplement,prospectus supplement, holders of
Preferred Stockpreferred stock having voting rights and holders of Common Stockcommon stock vote together
as one class. Holders of Preferred Stockpreferred stock do not have cumulative voting rights.
If, at the time of any annual meeting of PNC shall have failed to pay,shareholders, PNC has not
paid, or declaredeclared and set apart for payment, dividends on all outstanding shares
of Preferred Stockpreferred stock in an amount equal to six quarterly dividends at the rates
payable upon such shares, (whether or not such
dividends are cumulative), the number of directors of PNC shallwill be increased by
two, at the first annual meeting of the shareholders of PNC held thereafter, and
at such meeting and at each subsequent annual meeting until cumulative dividends
payable for all past dividend periods and continuous noncumulative dividends for
at least one year on all outstanding shares of Preferred Stock entitled thereto
20
22
shall have been paid, or declared and set apart for payment, in full, the holders of shares of Preferred Stock of all series shall have the right,outstanding preferred stock voting together as a
class will be entitled to elect suchthose two additional membersdirectors at that annual
meeting. After PNC pays the full amount of dividends to which the Boardholders of
Directors to
hold office for a term of one year. Upon such payment, or such declaration and
setting apart for payment, in full,preferred stock are entitled, the terms of the two additional directors so
elected shall forthwith terminate, andwill
end, the number of directors of PNC shallwill be reduced by two, and such voting
right of the holders of shares of Preferred
Stock shall cease, subject to increase inpreferred stock will end.
22
24
Unless PNC receives the number of directors as aforesaid
and to revesting of such voting right in the event of each and every additional
failure in the payment of dividends in an amount equal to six quarterly
dividends as aforesaid.
PNC shall not, without the affirmative vote at a meeting, or the written
consent with or without a meeting, of the holders of at least two-thirds of
the then outstanding shares of Preferred Stockpreferred stock of all series, (a)PNC will not:
- create or increase the authorized number of shares of any class of
stock ranking as to dividends or assets priorsenior to the Preferred Stock;preferred stock;
or
(b)- change the preferences, qualifications, privileges, limitations,
restrictions or special or relative
rights granted to or imposed uponof the shares of Preferred Stockpreferred stock in any material
respect adverseway that
materially and adversely affects the holders of the preferred stock.
If any change to the holders thereof, provided that if any such changerights of the preferred stock will affect any
particular series materially and adversely as contrasted with the
effect thereof uponcompared to any other series no such change may be made without, in
addition, such vote orof
preferred stock, PNC first must obtain the consent of the holders of at least
two-thirds of the then
outstanding shares of thethat particular series which would be so affected.
Subject to such affirmative vote or consent of the holders of the
outstanding shares of Preferred Stock of any series, PNC 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.preferred
stock.
The holders of the Preferred Stockpreferred stock of sucha series shallwill not be entitled to
participate in any such vote regarding a change in the rights of the preferred stock
if at or prior to the time when any such
alteration or change is to take effect,PNC makes provision is made for the redemption of all the Preferred Stockpreferred stock of such
series at the time outstanding.series. See "Redemption by PNC" below. Nothing in this section shall be takenPNC is not required to requireobtain any consent
of holders of preferred stock of a class vote or
consentseries in connection with the authorization,
designation, increase or issuance of any shares of any class or series (including additional Preferred Stock of
any series)preferred stock that rank
junior or equal to or on a parity with the Preferred Stockpreferred stock of such series aswith respect to dividends
and liquidation rights or in connection with the
authorization, designation, increase or issuance of any bonds, mortgages,
debentures or other obligations of PNC.rights.
Under interpretations adopted by the Federal Reserve or its staff, if the
holders of Preferred Stockpreferred stock of any series become entitled to vote for the
election of directors because dividends on such series are in arrears as
described above, suchthat 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 PNC) may then be subject to
regulation as a bank holding company in accordance with the BHCBank Holding Company
Act. In addition, at such time as suchwhen the 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 to acquire more than 5% of suchthat series, and any person other
than a bank holding company may be required to obtain the prior approval of the
Federal Reserve to acquire 10% or more of suchthat series.
Liquidation of PNC
In the event of the voluntary or involuntary liquidation of PNC, the
holders of shares of each outstanding series of Preferred Stock shallpreferred stock will be entitled to
receive from the
assets of PNC (whether capital or surplus), prior toliquidating distributions before any paymentdistribution is made to the holders
of Common Stockcommon stock or of any class or series of stock of PNC ranking as to assets
subordinate to
suchthat series, the amount fixed by the Board of DirectorsPNC board for suchthat series and described in
the applicable Prospectus Supplement,prospectus supplement, plus, in caseif dividends on suchthat series shall have been determined to beare
cumulative, an amount
equal to the accrued and unpaid dividends thereon (to the extent cumulative)
computed to the date on which payment thereof is made available, whether or not
earned or declared. After such payment to the holders of shares of such series,
any remaining balance shall be paid to the holders of Common Stock or of any
class or series of stock of PNC ranking as to assets subordinate to such series,
as they may be entitled. If, upon liquidation of PNC, its assets are not
sufficient to pay in full the amounts so payable to the holders of shares of all
series of Preferred Stock ranking equally as to assets, all such shares shall
participate ratably in the distribution of assets in proportion to the full
amounts to which they are
21
23
respectively entitled. Neither a merger nor a consolidation of PNC into or with
any other corporation nor a sale, transfer or lease of all or part of the assets
of PNC shall be deemed a liquidation of PNC within the meaning of this
paragraph.dividends.
Redemption by PNC
Except as otherwise provided by the Board of Directors and described in the
applicable Prospectus Supplement, PNC at its option to be exercised by its
Board of Directors, may redeem the whole or any part of the Preferred Stock or
of any series thereofpreferred stock at suchthe times
and at the applicable amount for each share which shall have been fixed and determined, plus, in case dividends shall have
been determined to be cumulative, an amount equal to the accrued and unpaid
dividends thereon (to the extent cumulative) computed to the date fixed for
redemption, whether or not earned or declared (hereinafter collectively called
the "redemption price"). If at any time less than all of the Preferred Stock
then outstanding is to be called for redemption, the Board may select one or
more series to be redeemed, and if less than all the outstanding Preferred Stock
of any series is to be called for redemption, the shares to be redeemed may be
selected by lot or by such other equitable method as the Board in its discretion
may determine.
Notice of redemption shall be published at least once in a newspaper of
general circulation in Philadelphia, Pennsylvania, or in the Borough of
Manhattan, New York, and copies of such notice 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 PNC. 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; and (iv) the place or places where certificates for such Preferred Stock
are to be surrendered for payment of the redemption price. 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 share of Preferred Stock has been given,
from and after the redemption date for such shares (unless default shall be made
by PNC in providing money for the payment of 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 PNC (except the right to receive the redemption price) shall
cease. Failure to give notice by mail or any defect therein or failure of any
addressee to receive it shall not affect the validity of the proceedings for
redemption. Conversion rights of shares called for redemption shall terminate at
the close of business on the date fixed for redemption or at such earlier time
as shall have been fixed by the Board of Directors. 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 PNC shall so
require and the notice shall so state), the redemption price set forth above
shall be paid out of the funds provided by PNC. If fewer than all the shares
represented by any such certificate are redeemed, a new certificate representing
the unredeemed shares shall be issued without cost to the holder thereof.
Except as otherwise provided by the Board of Directors and described in the applicable Prospectus Supplement,prospectus
supplement.
PNC shall have the right tomay acquire Preferred
Stockpreferred stock from time to time at suchthe price or prices
asthat PNC may determine, provided
that unlessdetermines. If any cumulative dividends (to the extent cumulative) payable for all past quarterly
dividend periods on all outstanding shares of Preferred Stock entitled to
cumulative dividends have not been paid, or declared and set apart for payment, in
full, PNC shallmay not acquire for value any shares of Preferred Stockpreferred stock except in accordance with an offer
(which may vary as to terms offered with respect to
shares of different series but not with respect to shares of the same series)
made in writing or by publication (as determined by the Board of Directors) to all holders of record of shares of
Preferred Stock.
22
24preferred stock.
Conversion
The holders of any series of Preferred Stock will have suchprospectus supplement may set for the rights, if any, for a holder of
preferred stock to convert such sharesthat preferred stock into or to exchange such shares for, cash, shares of
PNC's Common Stockcommon stock or any other
class of capital securities of PNC as may be set
forth in the Prospectus Supplement relating to such series of Preferred Stock.PNC.
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25
PREFERRED STOCK CURRENTLY OUTSTANDING
The following summariesAt August 31, 1999, PNC had five series of the outstandingpreferred stock outstanding:
- 12,205 shares of $1.80 Cumulative Convertible Preferred Stock, are qualified in
their entirety by referenceSeries
A ("preferred stock-A");
- 4,352 shares of $1.80 Cumulative Convertible Preferred Stock, Series B
("preferred stock-B");
- 264,076 shares of $1.60 Cumulative Convertible Preferred Stock, Series
C ("preferred stock-C");
- 374,532 shares of $1.80 Cumulative Convertible Preferred Stock, Series
D ("preferred stock-D"); and
- 6,000,000 shares of Fixed/Adjustable Rate Noncumulative Preferred
Stock, Series F ("preferred stock-F").
All shares of a former series of preferred stock, designated as $2.60
Cumulative Non Voting Preferred Stock, Series E, have been redeemed and restored
to the corresponding Designationsstatus of Series and
description of Preferred Stock contained in PNC's Articles of Incorporation, as
amended, attached as Exhibits 99.1 and 99.2 (with respect to the Preferred
Stock-F) to PNC's Current Report on Form 8-K dated October 7, 1996 and PNC's
application for registration of securities on Form 8-A filed September 24, 1987
(File No. 1-9718) and incorporated herein by reference.authorized but unissued preferred stock.
Holders of outstanding Preferred Stockpreferred stock are entitled to cumulative dividends
at the annual raterates set forth below in the table titled "Summary of $1.80 per share forCertain Key
Terms of Preferred Stock-A, Preferred Stock-B
and Preferred Stock-D and $1.60 per share for Preferred Stock-C,Stock," which are payable quarterly when and as declared by
the Board of Directors of PNC. The Board of Directors may not pay or set apart
dividends on Common Stockcommon stock until dividends for the current period and all past
dividend periods on all series of outstanding Preferred Stockpreferred stock have been paid or
declared and set apart for payment.
Dividends
on Preferred Stock-F are payable quarterly at a rate per share of 6.05% per
annum through September 29, 2001, and thereafter at the "Applicable Rate" (as
defined in the Designation of Series relating to the Preferred Stock-F), which
rate will not be less than 6.55% nor greater than 12.55% (unless there are
certain changes made to the Internal Revenue Code). Dividends on the Preferred
Stock-F are not cumulative and no rights accrue to the holders by reason of the
fact that PNC may fail to declare or pay dividends on the Preferred Stock-F in
any amount in any year.
Holders of outstanding Preferred Stock,preferred stock, other than Preferred Stock-F,preferred stock-F, are
entitled to a number of votes equal to the number of full shares of Common Stockcommon stock
into which their Preferred Stockpreferred stock is at the time convertible. Holders of outstanding
Preferred Stockpreferred stock currently are entitled to the following conversion privileges: (i) one shareprivileges set forth
below in the table titled "Summary of Certain Key Terms of Preferred Stock-A or Preferred Stock-B is
convertible into eight sharesStock."
In the event of Common Stock and (ii) 2.4 shares of Preferred
Stock-C or Preferred Stock-D are convertible into four shares of Common Stock.
Shares of Preferred Stock-F do not have voting rights, except in limited
circumstances.
On thea liquidation of PNC, holders of outstanding Preferred Stock would bepreferred
stock are entitled to receive the amounts set forth below in the table titled
"Summary of Certain Key Terms of Preferred Stock," plus all dividends accrued
and unpaid thereon, before any payments are made with respect to Common Stock,
a specified amount for each share held by them, plus all dividends accruedcommon stock.
Preferred stock-A, preferred stock-C and unpaid thereon, or such lesser amount remaining after the claims of all
creditors have been satisfied, ratably with holders of other series of Preferred
Stock ranking equally as to assets. The liquidation preference is $40 per share
for Preferred Stock-A and Preferred Stock-B, $20 per share for Preferred Stock-C
and Preferred Stock-D and $50 per share for Preferred Stock-F.
Preferred Stock-A, Preferred Stock-C and Preferred Stock-Dpreferred stock-D are redeemable
at any time at the option of PNC at redemption prices equal to the respective
liquidation preference amounts stated above, plus accrued and unpaid dividends,
if any. Preferred Stock-Bstock-B is not redeemable. Prior to September 30, 2001,
Preferred Stock-Fpreferred stock-F is not redeemable, except in limited circumstances by PNC upon
certain changes to the Internal Revenue Code at a declining redemption price
ranging from $52.20 to the liquidation preference amount, plus accrued and
unpaid dividends (whether or not earned or declared) from the immediately
preceding dividend payment date (but without any cumulation for unpaid dividends
for prior dividend periods) to the date fixed for redemption. On and after
September 30, 2001, Preferred Stock-Fpreferred stock-F is redeemable at the option of PNC at its
liquidation preference amount, plus accrued and unpaid dividends (whether or not
earned or declared) from the immediately preceding dividend payment date (but
without any cumulation for unpaid dividends for prior dividend periods) to the
date fixed for redemption.
All outstanding series of Preferred Stock,preferred stock, other than Preferred Stock-F,preferred stock-F,
are convertible (unless called for redemption and not converted within the time
allowed therefor), at any time at the option of the holder. No adjustment will
be made for dividends on Preferred Stockpreferred stock converted or on Common Stockcommon stock issuable
upon conversion. The conversion rate of each series of convertible Preferred
Stockpreferred
stock will be adjusted in certain events,
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25 including payment of stock dividends
on, or splits or combinations of, the Common Stockcommon stock or issuance to holders of
Common Stockcommon stock of rights to purchase Common
Stockcommon stock at a price per share less than
90% of Current Market Pricecurrent market price as defined in the Articles of Incorporation of PNC.
Appropriate adjustments in the conversion provisions also will be made in the
event of certain reclassifications, consolidations or mergers or the sale of
substantially all of the assets of PNC. Preferred Stock-Fstock-F is not convertible
into shares of Common Stockcommon stock or any other security of PNC.
PNC shall have the right to acquire outstanding24
26
Preferred Stock from time
to time at such price or prices as PNC may determine, provided that unless
dividends (to the extent cumulative) payable for all past quarterly dividend
periods on all outstanding shares of Preferred Stock entitled to cumulative
dividends have been paid, or declaredstock-A, preferred stock-B and set apart for payment, in full, PNC
shall not acquire for value any shares of Preferred Stock except in accordance
with an offer (which may vary as to terms offered with respect to shares of
different series but not with respect to shares of the same series) made in
writing or by publication (as determined by the Board of Directors) to all
holders of record of shares of Preferred Stock.
Preferred Stock-A, Preferred Stock-B and Preferred Stock-Fpreferred stock-F are currently
traded in the over-the-counter market. Preferred Stock-Cstock-C and -D are listed and
traded on the New York Stock Exchange. The Chase Manhattan Bank, New York, New
York, is transfer agent and registrar for all outstanding series of Preferred
Stock.preferred
stock.
SUMMARY OF CERTAIN KEY TERMS OF PREFERRED STOCK
ANNUAL
DIVIDEND
RATE VOTING RIGHTS
PREFERRED (PAYABLE CUMULATIVE CONVERSION (BASED ON LIQUIDATION
SERIES QUARTERLY) DIVIDENDS RATE CONVERSION RATE) PREFERENCE REDEEMABLE
- --------------------------------------------------------------------------------------------------------
A $1.80 Y 1:8 Y $40/share Y
- --------------------------------------------------------------------------------------------------------
B $1.80 Y 1:8 Y $40/share Y
- --------------------------------------------------------------------------------------------------------
C $1.60 Y 2.4:4 Y $20/share Y
- --------------------------------------------------------------------------------------------------------
D $1.80 Y 2.4:4 Y $20/share Y
- --------------------------------------------------------------------------------------------------------
E None Currently Outstanding
- --------------------------------------------------------------------------------------------------------
F - 6.05% per N N/A N (except in $50/share Y (but not
year limited prior to
through circumstances) 9/30/01,
9/29/01 except in
- between limited
6.55% and circumstances)
12.55%
thereafter
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
Certain general terms and provisions of the Deposit Agreement (as described
below), the Depositary Shares and the Depositary Receipts to which a Prospectus
Supplement may relate are set forth below. The particular terms of the Preferred
Stock offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Depositary Shares will be described in the
Prospectus Supplement relating to such Preferred Stock. The descriptions below
and in any Prospectus Supplement do not purport to be complete and are subject
to and qualified in their entirety by reference to the Deposit Agreement and the
Depositary Receipts, the forms of which are incorporated by reference as
Exhibits 4.5 and 4.6, respectively, to the Registration Statement of which this
Prospectus is a part and the definitive forms of which will be filed with the
Commission.
PNC may, at its option, elect to offer fractional interests in the
Preferred Stock,preferred stock, rather than whole shares of such securities. In the event such
option is exercised,preferred stock. If PNC does, PNC
will provide for the issuance by a Depositaryissue to the public of receipts for Depositary Shares,depositary shares, and each of whichthese
depositary shares will represent a fractional interest (to be set forth in the Prospectus Supplement relating to a
particular seriesfraction of the Preferred Stock) in a share of a particular series of
the Preferred Stock as described below.preferred stock. We will specify that fraction in the prospectus supplement.
The shares of any series of the Preferred Stockpreferred stock underlying the Depositary
Sharesdepositary
shares will be deposited under a separate Deposit Agreement ("Deposit
Agreement")deposit agreement between PNC and a depositary
selected by PNC. The depositary will be a bank or trust company selected by PNC havingand will have
its principal office in the United States and having a combined capital and surplus of
at least $50,000,000 ("Depositary").$50,000,000. The Prospectus Supplementprospectus supplement relating to a series of
Depositary Sharesdepositary shares will set forth the name and address of the Depositary, which may be one of the Banks.depositary. Subject
to the terms of the Deposit
Agreement,deposit agreement, each owner of a Depositary Sharedepositary share will be
entitled, in proportion to the applicable fractional interest in a share of
Preferred Stockpreferred stock underlying such
Depositary Share,that depositary share, to all the rights and
preferences of the Preferred Stockpreferred stock underlying such Depositary Share (includingthat depositary share. Those
rights include dividend, voting, redemption, conversion and liquidation rights).rights.
The Depositary Sharesdepositary shares will be evidenced by Depositary Receiptsdepositary receipts issued pursuant tounder
the Deposit Agreement. Depositary Receiptsdeposit agreement. PNC will be distributedissue depositary receipts to those persons purchasingwho
purchase the fractional shares ofin the related series of
Preferred Stockpreferred stock underlying the depositary
shares, in accordance with the terms of the offering described in a
related Prospectus Supplement.
24offering.
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26
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of PNC, 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 PNC's expense.
Upon surrender of Depositary Receipts at the office of the Depositary
(unless the Depositary Shares have been previously called for redemption) and
upon payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Shares is entitled to have the Depositary
deliver to such holder the number of whole shares of the related Preferred Stock
underlying the Depositary Shares evidenced by the surrendered Depositary
Receipts. Partial shares of Preferred Stock will not be issued. Holders of
Depositary Shares will be entitled to receive shares of the related series of
Preferred Stock as set forth in a related Prospectus Supplement, but holders of
such whole shares of such Preferred Stock thus withdrawn will not thereafter be
entitled to receive Depositary Shares therefor. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole shares of the
related series 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. PNC does not expect that there will be any public
trading market for the withdrawn shares.27
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositarydepositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stockpreferred stock to the record holders
of Depositary Shares relating to such Preferred Stockrelated depositary shares in proportion to the numbersnumber of such Depositary Sharesdepositary shares
owned by such holders on the relevant record
date. The Depositary 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 ofthose holders.
If PNC makes a distribution other than in cash, the Depositarydepositary will
distribute property received by it to the record holders of Depositary Sharesdepositary shares
that are entitled thereto,to receive the distribution, unless the Depositarydepositary determines
that it is not feasible to make such distribution, in which case the Depositarydistribution. If this occurs, the depositary
may, with the approval of PNC, sell suchthe property and distribute the net proceeds
from suchthe sale to suchthe applicable holders.
REDEMPTION OF DEPOSITARY SHARES
If a seriesWhenever PNC redeems shares of the Preferred Stock underlying the 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 the Preferred Stockpreferred stock that are held by the
Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
todepositary, the date fixed for redemption to the record holdersdepositary will redeem, as of the Depositary Shares
to besame redemption date, the
number of depositary shares representing the shares of preferred stock so
redeemed at their respective addresses appearing in the Depositary's
books.redeemed. The redemption price per Depositary Sharedepositary share will be equal to the
applicable fraction of the redemption price per share payable with respect to
suchthat series of the Preferred Stock. Whenever PNC redeems Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the number
of Depositary Shares relating to the shares of Preferred Stock so redeemed.preferred stock. If lessfewer than all the Depositary Sharesdepositary shares are
to be redeemed, the Depositary Sharesdepositary will select 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, thedepositary.
Depositary Shares soshares called for redemption will no longer be deemed to be outstanding after
the applicable redemption date, and all rights of the holderholders of the Depositary Sharesthese
depositary shares will cease, except the right to receive the
monies 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 Depositarydepositary of the Depositary Receiptsdepositary receipts evidencing
such
Depositary Shares.
25
27those depositary shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stockpreferred
stock are entitled to vote, the Depositarydepositary will mail the information contained
in suchthe notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock.depositary shares
underlying that preferred stock. Each record holder of such Depositary Sharesthose depositary shares
on the record date (which will be the same date as the record date for the
Preferred Stock)preferred stock) will be entitled to instruct the Depositarydepositary as to the exercise
of the voting rights pertaining to the amount of Preferred Stockpreferred stock underlying suchthat
holder's Depositary Shares.depositary shares. The Depositarydepositary will endeavor,try, insofar as practicable, to
vote the amountnumber of Preferred Stockshares of preferred stock underlying such Depositary
Sharesthose depositary shares
in accordance with suchthose instructions, and PNC will agree to take all action
which may be deemedthe depositary deems necessary by the Depositary in order to enable the Depositarydepositary to do so.
The Depositarydepositary will abstain from voting Preferred Stocknot vote the shares of preferred stock to the extent it does
not receive specific instructions from the holders of Depositary Shares relating to such Preferred Stock.depositary shares
underlying the preferred stock.
CONVERSION OF PREFERRED STOCK
If a series of the Preferred Stockpreferred stock underlying the Depositary Sharesdepositary shares is
convertible into shares of PNC's Common Stockcommon stock or any other class of capital
securities of PNC, PNC will accept the delivery of Depositary Receipts for
purposes of effecting conversions ofdepositary receipts to
convert the Preferred Stock utilizingpreferred stock using the same procedures as those provided for delivery of
certificates for the Preferred
Stock pursuant to the terms of the series of Preferred Stock.preferred stock. If the Depositary
Sharesdepositary shares represented by a
Depositary Receiptdepositary receipt are to be converted in part only, the depositary will issue a
new Depositary Receiptdepositary receipt or Depositary Receipts will be issued by the Depositarydepositary receipts for the Depositary Sharesdepositary shares not to
be converted.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
ThePNC and the depositary may amend the form of Depositary Receiptdepositary receipt evidencing
the Depositary Sharesdepositary shares and any provision of the Deposit Agreement maydeposit agreement at any time be amended by agreement
between PNC and the Depositary.time.
However, any amendment whichthat materially and adversely alters the rights of the
existing holders of Depositary Sharesdepositary shares will not be effective unless suchthe amendment has been
approved by the record holders of at least a majority of the Depositary Sharesdepositary shares then
outstanding. A Deposit
Agreement may be terminated by PNC or the Depositarydepositary may terminate the deposit agreement only if
(i) all outstanding Depositary Shares relating theretodepositary shares have been redeemed or (ii) there has been
a final distribution in respect of the Preferred Stock of the relevant seriesunderlying preferred stock in connection with any
liquidation, dissolution or winding up of PNC.
26
28
CHARGES OF DEPOSITARY
PNC will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. PNC will also pay
charges of the Depositarydepositary in connection with the initial deposit of the
Preferred Stockpreferred stock and any redemption of the Preferred Stock.preferred stock. Holders of Depositary
Sharesdepositary
shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreementdeposit agreement to be for their
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from PNC which are delivered to the Depositary and which PNC
is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor PNC 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 PNC and the Depositary under the
Deposit Agreement will be limited to performance in good faith of their
respective duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or shares of
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 Shares or other
persons believed to be competent and on documents believed to be genuine.
26
28
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositarydepositary may resign at any time by delivering to PNC notice of its
election to do so, andso. PNC may remove the depositary at any time remove the Depositary, anytime. Any such
resignation or removal towill take effect only upon the appointment of a successor
Depositarydepositary and its acceptance of suchits appointment. SuchThe successor Depositarydepositary 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.
MISCELLANEOUS
The depositary will forward to the holders of depositary shares all reports
and communications from PNC that PNC delivers to the depositary and that PNC is
required to furnish to the holders of the preferred stock.
Neither the depositary nor PNC 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 PNC and the depositary under the
deposit agreement will be limited to performance in good faith of their
respective duties under the deposit agreement. They will not be obligated to
prosecute or defend any legal proceeding relating to any depositary shares or
preferred stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or upon information provided by
persons presenting preferred stock for deposit, holders of depositary shares or
other persons they believe to be competent and on documents they believe to be
genuine.
PLAN OF DISTRIBUTION
PNC Funding may offer and sell Debt Securities todebt securities being offered by use of this
prospectus:
- through underwriters;
- through dealers;
- through agents; or
through underwriters,
acting as principals for their own accounts or as agents, and also may offer and
sell Debt Securities- directly to other purchasers.
PNC may offer and sell Common
Stockcommon stock and Preferred Stock topreferred stock being offered by
use of this prospectus:
- through underwriters;
- through dealers;
- through agents; or
through underwriters, acting as principals for
their own accounts or as agents, and also may offer and sell Common Stock and
Preferred Stock- directly to other purchasers.
AnyThe applicable prospectus supplement will name any underwriters in
connection with Offered Debt Securities, Common Stockoffered debt securities, common stock or Preferred Stockpreferred stock and
will be named in
the related Prospectus Supplement andset forth any underwriting compensation paid to such underwriters will be set forth therein.underwriters.
Underwritten offerings may involve underwriting syndicates represented by
managing underwriters, or underwriters without a syndicate.
27
29
The distribution of Securitiessecurities 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,securities, underwriters or agents acting on
PNC's behalf may receive compensation from PNC Funding, PNC or from purchasers
of Securitiessecurities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers or agents that participate
in the distribution of Securitiessecurities may be deemed to be underwriters and any
discounts or commissions received by them and any profit on the resale of
Securitiessecurities by them may be deemed to be underwriting discounts and commissions
under the Securities Act. Any such underwriter will be identified and any such
compensation will be described in the Prospectus Supplement.prospectus supplement.
Under agreements which may be entered into with PNC Funding and PNC,us, underwriters, dealers
and agents may be entitled to indemnification by PNC
Funding or PNCus against certain liabilities,
including liabilities under the Securities Act, and to contributions from PNC Funding or PNCus in
respect of such liabilities. Underwriters, dealers and agents may be customers
of, engage in transactions with, or perform services for PNC Funding or PNCus in the ordinary
course of business.
If so indicated in the Prospectus Supplement,applicable prospectus supplement, PNC Funding and/or
PNC will authorize the underwriters or other persons acting as PNC Funding's
agents and/or PNC's agents to solicit offers by certain institutions to purchase
Debt
Securitiesdebt securities from PNC Funding and/or Preferred Stockpreferred stock from PNC pursuant to
contracts providing for payment and delivery on a future date or dates stated in
the applicable Prospectus Supplement.prospectus supplement. 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 PNC Funding or PNC. The
obligations of any purchaser under any such contract will not be subject to any
conditions, except that (1) the purchase of the Debt Securities,debt securities, or the Common
Stockcommon
stock or the Preferred Stockpreferred stock shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject, and (2)
if Debt Securitiesdebt securities or Common Stockcommon stock or Preferred Stockpreferred stock are also being sold to
underwriters, PNC Funding or PNC shall have sold to such underwriters the Debt
Securitiesdebt
securities or the Common Stockcommon stock or the Preferred Stockpreferred stock 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.
27
29
LEGAL OPINIONS
The validity of the Securitiesdebt securities and related Guaranteesguarantees and the Common Stock,common
stock, the Preferred Stockpreferred stock and the Depositary Sharesdepositary shares will be passed upon for PNC
Funding and PNCus
by Melanie S. Cibik, SeniorVictor M. DiBattista, Chief Regional Counsel of PNC, One PNC Plaza, 249 Fifth
Avenue, Pittsburgh, Pennsylvania 15222. As of June 30, 1997, Miss Cibik
beneficially owned 908 shares of PNC's Common Stock under PNC's employee plans.
If the Securitiessecurities are being distributed
in an underwritten offering, the validity of the Securitiessecurities and related
Guaranteesguarantees and the Common Stock,common stock, the Preferred Stockpreferred stock and the Depositary Sharesdepositary shares
will be passed upon for the underwriters by counsel identified in the Prospectus Supplement.applicable
prospectus supplement.
EXPERTS
TheErnst & Young LLP, independent auditors, have audited our consolidated
financial statements of PNC incorporated by reference into
thein PNC Bank Corp.'s Annual Report
on Form 10-K of PNC for the year ended December 31, 1996, have
been audited by Ernst & Young LLP, independent auditors,1998, as set forth in their report,
thereonwhich is incorporated by reference therein and herein. Suchin this registration statement. Our
consolidated financial statements are incorporated herein by reference in reliance upon suchon
Ernst & Young LLP's report, given their authority as experts in accounting and
auditing.
Such financial statements are, and audited financial statements to be
included in subsequently filed documents will be, incorporated herein in
reliance upon the reports of independent auditors pertaining to such financial
statements (to the extent covered by consents filed with the Securities and
Exchange Commission) given on the authority of such firm as experts in
accounting and auditing.
Documents incorporated herein by reference in the future will include
financial statements, related schedules (if required) and auditors' reports,
which financial statements and schedules will have been audited to the extent
and for the periods set forth in such reports by the firm or firms rendering
such reports, and, to the extent so audited and consent to incorporation by
reference is given, will be incorporated herein by reference in reliance upon
such reports given upon the authority of such firms as experts in accounting and
auditing.
28
30
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THE PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THE PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE UNDER THE PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PNC FUNDING CORP OR PNC BANK CORP.
SINCE THE DATE HEREOF. THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
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
---
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
PNC Bank Corp......................... 3
PNC Funding Corp...................... 3
Supervision, Regulation and
Other Matters....................... 3
Consolidated Ratio of Earnings to
Fixed Charges....................... 6
Consolidated Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends..................... 6
Use of Proceeds....................... 7
Description of Debt Securities and
Guarantees.......................... 7
Description of Common Stock........... 18
Description of Preferred Stock........ 19
Description of Depositary Shares...... 24
Plan of Distribution.................. 27
Legal Opinions........................ 28
Experts............................... 28
======================================================
======================================================
PNC FUNDING CORP
DEBT SECURITIES
PNC BANK CORP.
UNCONDITIONAL GUARANTEES OF
PNC FUNDING CORP
DEBT SECURITIES, AS TO PAYMENT OF
PRINCIPAL, PREMIUM, IF ANY, AND
INTEREST
COMMON STOCK ($5.00 PAR VALUE)
PREFERRED STOCK ($1.00 PAR VALUE)
------------
PROSPECTUS
------------
, 1997
======================================================
31
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following expenses will be incurred in connection with the issuance and
distribution of the Debt Securities, Common Stock, and Preferred Stocksecurities being registered, other than underwriting
discounts and commissions:
To be borne by PNC Bank Corp. and PNC Funding Corp:
Registration Fee..................................................Fee............................................ $ 393,939.40417,000.00
Legal Fees and Expenses...........................................Expenses..................................... $ 150,000.00*
Indenture Trustee Fees and Expenses...............................Expenses......................... $ 100,000.00*
Printing and Engraving............................................Engraving...................................... $ 200,000.00*
Rating Fees.......................................................Fees................................................. $ 200,000.00*
Accounting Fees...................................................Fees............................................. $ 150,000.00*
Blue Sky and Legal Investment Fees and Expenses...................Expenses............. $ 50,000.00*
Listing Fees......................................................Fees................................................ $ 25,000.00*
Miscellaneous..................................................... 31,060.60*Miscellaneous............................................... $ 33,000.00*
-------------
Total........................................................... $1,300,000.00*
============Total............................................. $1,325,000.00*
=============
- ---------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Sections 1741-1743 of the Pennsylvania Business Corporation Law
of 1988 (Act of December 21, 1988, P.L. 1444) ("1988 BCL") provide that a business
corporation may, we have the power to
indemnify our directors and officers against liabilities they may incur in such
capacities provided certain standards are met, including good faith and the
belief that the particular action is in the best interests of the corporation.
In general, this power to indemnify does not exist in the case of actions
against a director or officer by or in the right of the corporation if the
person entitled to indemnification shall have been adjudged to be liable for
negligence or misconduct in the performance of such person's duties. A
corporation is required to indemnify directors and officers against expenses
they may incur in defending actions against them in such capacities if they are
successful on the merits or otherwise in the defense of such actions.
Section 1746 of the 1988 BCL provides that the foregoing provisions shall
not be deemed exclusive of any other rights to which a person seeking
indemnification may be entitled under, among other things, any by-law provision,
provided that no indemnification may be made in any case where the act or
failure to act giving rise to the claim for indemnification is determined by a
court to have constituted willful misconduct or recklessness.
Each of PNC Bank Corp.'s and PNC Funding Corp'sour By-Laws provide for the mandatory indemnification of directors
and officers in accordance with and to the full extent permitted by the Laws of
Pennsylvania as in effect at the time of such indemnification. Each of PNC Bank Corp.'s and PNC Funding Corp'sour
By-Laws also eliminate, to the maximum extent permitted by the laws of the
Commonwealth of Pennsylvania, the personal liability of directors for monetary
damages for any action taken, or any failure to take any action as a director
except in any case such elimination is not permitted by law.
PNC Bank Corp. has purchased directors' and officers' liability insurance covering
certain liabilities whichthat may be incurred by its respectivedirectors and officers
and directors in
connection with the performance of their duties. SuchThat insurance covers PNC
Funding Corp'sFunding's directors and officers as well.
II-1
31
ITEM 16. EXHIBITS
The exhibits listed on the Exhibit Index beginning on page II-6II-7 of this
Registration Statementregistration statement are filed herewith will be filed by amendment, or are incorporated herein by
reference to other filings.
II-1
32
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statementregistration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement.registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statementregistration statement
or any material change to such information in the Registration Statement;
provided,registration
statement;
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrants pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, that are incorporated by reference in the
Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
3. To remove from the registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering;
4. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrants' annual reports
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934, that is incorporated by reference in the Registration Statementregistration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof;
5. For the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statementregistration statement as of the time it is declared
effective; and
6. For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
32
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions set forth in Item 15, or otherwise, the
Registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrants will, unless
in the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, and will be governed by the final adjudication of such
issue.
II-2II-3
33
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statementregistration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pittsburgh, and Commonwealth of Pennsylvania, on the
29th4th day of August, 1997.October, 1999.
PNC BANK CORP.
By: /s/ THOMAS H. O'BRIEN
------------------------------------
Thomas H. O'Brien
Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
- ----------------------------------------- -------------------------------------- -------------------------- ----- ----
/s/ THOMAS H. O'BRIEN Chairman, Chief Executive Officer and August 29, 1997October 4, 1999
- ----------------------------------------------------------------------------------------- and Director (Principal Executive
Thomas H. O'Brien Officer)
/s/ ROBERT L. HAUNSCHILD Senior Vice President and Chief August 29, 1997October 4, 1999
- ----------------------------------------------------------------------------------------- Financial Officer (Principal
Robert L. Haunschild Financial Officer)
/s/ WILLIAM J. JOHNSSAMUEL R. PATTERSON Senior Vice President and Chief August 29, 1997Controller October 4, 1999
- ----------------------------------------- Accounting Officer------------------------------------------------ (Principal
William J. Johns Accounting Officer)
Samuel R. Patterson
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
Paul W. Chellgren
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
Robert N. Clay
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
George A. Davidson, Jr.
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
David F. Girard-diCarlo
* Vice Chairman and Director August 29, 1997October 4, 1999
- -----------------------------------------
C.G. Grefestette------------------------------------------------
Walter E. Gregg, Jr.
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
William R. Johnson
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
Bruce C. Lindsay
* Director August 29, 1997October 4, 1999
- -----------------------------------------
Thomas Marshall
* Director August 29, 1997
- -----------------------------------------------------------------------------------------
W. Craig McClelland
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
Jane G. Pepper
* Director October 4, 1999
- ------------------------------------------------
Jackson H. Randolph
/s/ JAMES E. ROHR* President, Chief Operating Officer October 4, 1999
- ------------------------------------------------ and Director
August 29, 1997James E. Rohr
* Director October 4, 1999
- -----------------------------------------
James E. Rohr------------------------------------------------
Roderic H. Ross
II-3II-4
34
SIGNATURE TITLE DATE
- ----------------------------------------- -------------------------------------- -------------------------- ----- ----
* Director August 29, 1997October 4, 1999
- -----------------------------------------
Roderic H. Ross
* Director August 29, 1997
- -----------------------------------------
Vincent A. Sarni
* Director August 29, 1997
- -----------------------------------------
Garry J. Scheuring
* Director August 29, 1997
- -----------------------------------------------------------------------------------------
Richard P. Simmons
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
Thomas J. Usher
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
Milton A. Washington
* Director August 29, 1997October 4, 1999
- -----------------------------------------------------------------------------------------
Helge H. Wehmeier
*By: /s/ MELANIE S. CIBIK
-----------------------------------------------------
Melanie S. Cibik, Attorney-in-Fact,
pursuant to Powers of Attorney filed herewith
Date: August 29, 1997
II-4*By: /s/ RANDALL C. KING
-------------------------------------
Randall C. King, Attorney-in-Fact,
pursuant to Powers of Attorney
filed herewith
Date: October 4, 1999
II-5
35
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pittsburgh, and Commonwealth of Pennsylvania, on the
29th4th day of August, 1997.October, 1999.
PNC FUNDING CORP
By: /s/ ROBERT L. HAUNSCHILD
------------------------------------
Robert L. Haunschild
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
- ----------------------------------------- -------------------------------------- -------------------------- ----- ----
/s/ PAUL L. AUDET Chairman and Director August 29, 1997
- -----------------------------------------
Paul L. Audet
/s/ ROBERT L. HAUNSCHILD Chairman, President and Director August 29, 1997October 4, 1999
- ----------------------------------------------------------------------------------------- (Principal Executive Officer)
Robert L. Haunschild
/s/ RANDALL C. KING Senior Vice President and Director August 29, 1997October 4, 1999
- ----------------------------------------------------------------------------------------- (Principal Financial Officer)
Randall C. King
/s/ ROBERTWALTER E. GREGG, JR. Director October 4, 1999
- ------------------------------------------------
Walter E. Gregg, Jr.
/s/ MARIA C. BARRY, JR. SeniorSCHAFFER Vice President and August 29, 1997Controller October 4, 1999
- ----------------------------------------- Chief Financial Officer
Robert------------------------------------------------ (Principal Accounting Officer)
Maria C. Barry, Jr.
/s/ TARA A. HUGHES Accounting Officer and Assistant August 29, 1997
- ----------------------------------------- Controller
Tara A. HughesSchaffer
II-5II-6
36
EXHIBIT INDEX
EXHIBIT
NO. NAME OF DOCUMENT METHOD OF FILING
- ------- ------------------------------------------------------ ------------------------------------------- ----------------
1.1 Form of Underwriting Agreement for Debt Securities. Filed herewith.
Securities.
1.2 Form of Underwriting Agreement for Common Incorporated herein by reference to
Stock, Filed herewith. Preferred Stock and Depositary Exhibit 1.2 of the Registration Statement
Shares. on Form S-3 filed August 29, 1997
(Registration No. 333-34709)
3.1 Articles of Incorporation of PNC Bank Corp., as Incorporated herein by amended. reference to
Exhibits 99.1
and 99.2 to CurrentCorp., as amended. Exhibit 3.1 of the Annual Report on Form
8-K dated October
7, 199610-K for the year ended December 31, 1998
of PNC Bank Corp. (File No. 1-9718)001-09718).
3.2 By-laws of PNC Bank Corp., as amended. Incorporated herein by reference to
Exhibit 99 to99.2 of the Current Report on
Form 8-K dated July 9, 1997January 15, 1998 of PNC
Bank Corp. (File No. 1-9718)001-09718).
3.3 Articles of Incorporation of PNC Funding Incorporated herein by reference to
Corp, as Filed herewith.
amended. Exhibit 3.3 of the Registration Statement
on Form S-3 filed August 29, 1997
(Registration No. 333-34709)
3.4 By-laws of PNC Funding Corp, as amended. Filed herewith.Incorporated herein by reference to
Exhibit 3.4 of the Registration Statement
on Form S-3 filed August 29, 1997
(Registration No. 333-34709)
4.1 Form of Certificate for Common Stock. Filed herewith.Incorporated herein by reference to
Exhibit 4.1 of the Registration Statement
on Form S-3 filed August 29, 1997
(Registration No. 333-34709)
4.2 Form of Certificate for Preferred Stock (with Incorporated herein by reference to
(with references to PNC Financial Corp Exhibit 4.1 to the Registration Statement
now being PNC Bank reference to Exhibit 4.1 to
Corp.). the Registration Statement on Form S-3 at File No. 33-40602, in
Pre-Effective Amendment No. 2, filed
September 24, 1991.
4.3 Article Sixth and Article Seventh of PNC Bank Corp.'s Included in Exhibit 99.1 to
Articles of Incorporation, as amended. Current Report on Form 8-K
dated October 7, 1996 of
PNC Bank Corp., which is
incorporated herein by
reference through Exhibit
3.1 to this Registration
Statement.
4.4 Form of Statement of Designation with respect to To be filed in documents incorporated
respect to Preferred Stock. incorporated herein by reference.
4.54.4 Form of Deposit Agreement. Filed herewith.
4.6Incorporated herein by reference to
Exhibit 4.5 of the Registration Statement
on Form S-3 filed August 29, 1997
(Registration No. 333-34709)
4.5 Form of Depositary Receipt. Filed herewith.
4.7Incorporated herein by reference to
Exhibit 4.6 of the Registration Statement
on Form S-3 filed August 29, 1997
(Registration No. 333-34709)
II-7
37
EXHIBIT
NO. NAME OF DOCUMENT METHOD OF FILING
- ------- ---------------- ----------------
4.6 Indenture dated as of December 1, 1991, Incorporated herein by reference to
among PNC Filed herewith. Funding Corp, as Issuer, PNC Exhibit 4.7 of the Registration Statement
Financial Corp (now PNC Bank Corp.), as on Form S-3 filed August 29, 1997
Guarantor, and Manufacturers Hanover (Registration No. 333-34709)
Trust Company, as Trustee (of which The
Chase Manhattan Bank, formerly known as
Chemical Bank, is successor trustee).
4.84.7 Supplemental Indenture dated as of Incorporated herein by reference to
February 15, 1993, Filed herewith.
among PNC Funding Exhibit 4.8 of the Registration Statement
Corp, as Issuer, PNC Bank Corp., as on Form S-3 filed August 29, 1997
Guarantor, and Chemical Bank, as successor by merger
to Manufacturers Hanover Trust Company and now known
as The Chase Manhattan Bank.
II-6
37
EXHIBIT
NO. NAME OF DOCUMENT METHOD OF FILING
- ------- ------------------------------------------------------ ---------------------------
4.9(Registration No. 333-34709)
successor by merger to Manufacturers
Hanover Trust Company and now known as
The Chase Manhattan Bank.
4.8 Form of Debt Security and related Guarantee. To be filed in documents incorporated
Guarantee. herein by reference.
4.104.9 Form of Subordinated Note and related Incorporated herein by reference to
Guarantee. Filed herewith.Exhibit 4.10 of the Registration
Statement on Form S-3 filed August 29,
1997 (Registration No. 333-34709)
5 Opinion of Melanie S. Cibik,Victor M. DiBattista, Esquire, Filed herewith.
as to the Filed herewith. legality of the securities
being registered.
12.1 Computation of Consolidated Ratio of Filed herewith.
Earnings to Fixed Filed herewith. Charges.
12.2 Computation of Consolidated Ratio of Filed herewith.
Earnings to Filed herewith. Combined Fixed Charges and
Preferred Stock Dividends.
23.1 Consent of Ernst & Young LLP. Filed herewith.
23.2 Consent of Melanie S. Cibik.Victor M. DiBattista, Esquire. Filed as part of Exhibit 5 to this
Registration Statement.
24.1 Power of Attorney of certain directors Filed herewith.
and officers of Filed herewith. PNC Bank Corp.
24.2 Power of Attorney of certain directors Filed herewith.
and officers of Filed herewith. PNC Funding Corp.
24.3 Power of Attorney of Robert N. ClayPaul W. Chellgren (a Filed herewith.
director of PNC Filed herewith.
Bank Corp.).
25 Form T-1--Statement of Eligibility Under Filed herewith.
the Trust Filed herewith.
Indenture Act of 1939 of The Chase Manhattan Bank to
Act as Trustee.
II-7II-8