As Filed With the Securities and Exchange Commission on
October 31, 2001
Registration No. 333-71568
Registration No. 333-71568-01
Registration No. 333-71568-02
________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Sovereign Bancorp, Inc. Pennsylvania 23-2453088
Sovereign Capital Trust III Delaware To Be Applied For
Sovereign Capital Trust IV Delaware To Be Applied For
(Exact Name of Registrant as (State or Other (I.R.S. Employer
Specified in its Charter) Jurisdiction of Identification
Incorporation or Number)
Organization)
___________
2000 Market Street
Philadelphia, Pennsylvania 19103
(215) 557-4630
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
___________
Jay S. Sidhu
Sovereign Bancorp, Inc.
2000 Market Street
Philadelphia, Pennsylvania 19103
(215) 557-4630
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
___________
Copies To:
Joseph M. Harenza, Esq. William J. Reynolds, Esq.
Stevens & Lee Stevens & Lee
111 North Sixth Street 111 North Sixth Street
Reading, PA 19601 Reading, PA 19601
(610) 478-2160 (610) 478-2099
___________
Approximate Date of Commencement of Proposed Sale of the
Securities to the Public: From time to time after this
Registration Statement becomes effective.
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 under the Securities Act, please check the
following box. [ X ]
___________
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 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
________________________________________________________________
INTRODUCTORY NOTE
This Registration Statement contains a form of base
prospectus for debt securities, preferred stock, depositary
shares, common stock, warrants and stock purchase contracts and
stock purchase units of Sovereign Bancorp, Inc., and the
preferred securities of Sovereign Capital Trust III and
Sovereign Capital Trust IV, and related junior subordinated debt
securities, guarantees and certain back-up obligations of
Sovereign Bancorp, Inc.
To the extent required, the information in the
prospectuses, included financial information, will be updated at
the time of each offering. Upon each such offering, a
prospectus supplement to the appropriate base prospectus will be
filed.
PROSPECTUS
$1,000,000,000
Sovereign Bancorp, Inc.
May Offer --
Debt Securities
Preferred Stock
Depositary Shares
Common Stock
Warrants
Stock Purchase Contracts
Stock Purchase Units
___________
The Trusts
May Offer --
Trust Preferred Securities
___________
We and, in the case of the trust preferred securities, the
applicable Trust, may offer and sell from time to time up to
$1,000,000,000 of the securities. The securities will be
offered in amounts, at prices and on terms to be determined by
market conditions at the time of offering.
This prospectus contains a general description of the
securities that may be offered. The specific terms of the
securities will be contained in one or more supplements to this
prospectus. You should read this prospectus and any prospectus
supplements carefully before you invest in the securities. This
prospectus may not be used to consummate sales of securities
unless accompanied by a prospectus supplement.
Our common stock is listed on the New York Stock Exchange
under the symbol "SOV."
These securities are not savings or deposit accounts or
other obligations of any of our bank or nonbank subsidiaries and
the securities are not insured or guaranteed by the Federal
Deposit Insurance Corporation, the Savings Association Insurance
Fund or any other governmental agency.
___________
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved of these
securities or determined if this prospectus or any accompanying
prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
___________
This Prospectus is dated November 2, 2001.
TABLE OF CONTENTS
Page
ABOUT THIS PROSPECTUS ................................... 1
WHERE YOU CAN FIND MORE INFORMATION...................... 2
FORWARD-LOOKING STATEMENTS............................... 4
PROSPECTUS SUMMARY....................................... 8
USE OF PROCEEDS.......................................... 11
OUR RATIO OF EARNINGS TO FIXED CHARGES................... 11
DESCRIPTION OF COMMON STOCK.............................. 12
DESCRIPTION OF PREFERRED STOCK........................... 12
DESCRIPTION OF DEPOSITARY SHARES......................... 16
DESCRIPTION OF DEBT SECURITIES........................... 20
DESCRIPTION OF WARRANTS.................................. 42
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK
PURCHASE UNITS......................................... 48
DESCRIPTION OF CAPITAL SECURITIES........................ 49
DESCRIPTION OF TRUST PREFERRED SECURITIES AND TRUST
GUARANTEES............................................. 55
CERTAIN TAX CONSIDERATIONS............................... 62
PLAN OF DISTRIBUTION..................................... 62
ERISA CONSIDERATIONS..................................... 66
LEGAL MATTERS............................................ 66
EXPERTS.................................................. 65
ABOUT THIS PROSPECTUS
This prospectus is a combined prospectus that is part of two
registration statements that we and the Trusts filed with the
SEC utilizing a "shelf" registration process. Under this shelf
registration process, we and, in the case of the trust preferred
securities, the applicable Trust, may sell the securities
described in this prospectus in one or more offerings up to a
total dollar amount of $1,000,000,000.
This prospectus provides you with a general description of
the securities we and the Trusts may offer. Each time we or the
Trusts sell securities, we or the applicable Trust will provide
a prospectus supplement that will contain specific information
about the terms of the offering and the securities. The
prospectus supplement may also add, update or change information
contained in this prospectus. Any statement that we or the
Trusts make in this prospectus will be modified or superseded by
any inconsistent statement made by us or the Trusts in a
prospectus supplement. You should read both this prospectus and
any prospectus supplement together with the additional
information described in the following section.
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, we and the
Trusts have filed a registration statement (No. 333-71568;
333-71568-01; 333-71568-02) relating to the securities offered
by this prospectus with the SEC. This prospectus is a part of
that registration statement, which includes additional
information.
We file annual, quarterly and special reports, proxy
statements and other information with the SEC. Our SEC filings
are available to the public over the Internet at the SEC's web
site at http://www.sec.gov. You may also read and copy any
document we file with the SEC at its public reference facilities
at 450 Fifth Street, N.W., Washington, D.C. 20549 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. You can also obtain copies of the documents at
prescribed rates by writing to the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on
the operation of the public reference facilities. Our SEC
filings are also available at the offices of the New York Stock
Exchange. For further information on obtaining copies of our
public filings at the New York Stock Exchange, you should call
(212) 656-5060.
We "incorporate by reference" into this prospectus the
information we file with the SEC, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is an
important part of this prospectus. Some information contained
in this prospectus updates the information incorporated by
reference, and information that we file subsequently with the
SEC will automatically update this prospectus. In other words,
in the case of a conflict or inconsistency between information
set forth in this prospectus and information incorporated by
reference into this prospectus, you should rely on the
information contained in the document that was filed later. We
incorporate by reference the documents listed below and any
filings we make with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 after the initial
filing of the registration statement that contains this
prospectus and prior to the time that we sell all the securities
offered by this prospectus:
- our Annual Report on Form 10-K for the fiscal year
ended December 31, 2000;
- our Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31 and June 30, 2001;
- our Current Reports on Form 8-K filed with the SEC
on January 25, 2001 (as amended by 8-K/A filed on
February 5, 2001), February 8, 2001, February 12,
2001, February 21, 2001, March 27, 2001,
July 3, 2001 (8-K/A No. 2), July 17 and October 19,
2001;
- the description of our common stock contained in
our Registration Statement on Form 8-A, filed with
the SEC on July 3, 2001, and any amendments or
reports filed for the purpose of updating such
registration statement; and
- the description of our stock purchase rights
contained in our Registration Statement on
Form 8-A, filed with the SEC on July 3, 2001, and
any amendments or reports filed for the purpose of
updating such registration statement.
You may request a copy of these filings, in most cases
without exhibits, at no cost, by writing or telephoning us at
the following address:
Investor Relations Office
Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, Pennsylvania 19610
(610) 988-0300
___________
No separate financial statements of the Trusts have been
included or incorporated by reference herein. We and the Trusts
do not consider such financial statements material to holders of
trust preferred securities because:
- all of the voting securities of each Trust will be
owned, directly or indirectly, by us, a reporting
company under the Securities Exchange Act of 1934;
- no Trust has independent operations, but rather
each exists for the sole purpose of issuing
securities representing undivided beneficial
interests in the assets of such Trust and investing
the proceeds thereof in debt securities; and
- the obligations of the Trusts under the trust
preferred securities are fully and unconditionally
guaranteed by us to the extent set forth herein.
See "The Trusts" and "Description of Trust Preferred Securities
and Trust Guarantees -- Trust Guarantees."
You should rely only on the information provided in this
prospectus and the prospectus supplement, as well as the
information incorporated by reference. We have not authorized
anyone to provide you with different information. We are not
making an offer of these securities in any jurisdiction where
the offer is not permitted. You should not assume that the
information in this prospectus, the prospectus supplement or any
documents incorporated by reference is accurate as of any date
other than the date of the applicable document.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements made by
us, the Trusts or on behalf of us or the Trusts. The
presentations, and certain of the other disclosure in this
prospectus, the accompanying prospectus supplement and in the
documents incorporated by reference, including any statements
preceded by, followed by or which include the words "may,"
"could," "should," "pro forma," "looking forward," "will,"
"would," "believe," "expect," "anticipate," "estimate,"
"intend," "plan," "strive," "hopefully," "try," "assume" or
similar expressions constitute forward-looking statements.
These forward-looking statements, implicitly and
explicitly, include the assumptions underlying the statements
and other information with respect to the beliefs, plans,
objectives, goals, expectations, anticipations, estimates,
intentions, financial condition, results of operations, future
performance and business of us and the Trusts, including
expectations and estimates with respect to our:
- growth in cash earnings, operating earnings, net
income, shareholder value and internal tangible
equity generation;
- growth in earnings per share;
- return on equity;
- return on assets;
- efficiency ratio;
- tier 1 leverage ratio;
- annualized net charge-offs and other asset quality
measures;
- fee income as a percentage of total revenue;
- tangible equity to assets;
- book value and tangible book value per share; and
- loan and deposit portfolio compositions, employee
retention, deposit retention, asset quality,
reserve adequacy.
Although we and the Trusts believe that the expectations
reflected in these forward-looking statements are reasonable,
these statements involve risks and uncertainties which are
subject to change based on various important factors (some of
which are beyond the control of us and the Trusts). The
following factors, among others, could cause our financial
performance to differ materially from our goals, plans,
objectives, intentions, expectations, and other forward-looking
statements:
- the strength of the United States economy in
general and the strength of the regional and
local economies in which we conduct operations;
- the effects of, and changes in, trade, monetary
and fiscal policies and laws, including interest
rate policies of the Board of Governors of the
Federal Reserve System;
- inflation, interest rate, market and monetary
fluctuations;
- our ability to successfully integrate the assets,
liabilities, customers, systems and management we
acquire into our operations and our ability to
realize related revenue synergies and cost savings
between expected time frames;
- our timely development of competitive new products
and services in a changing environment and the
acceptance of such products and services by
customers;
- the willingness of customers to substitute
competitors' products and services and vice versa;
- the impact of changes in financial services
policies, laws and regulations, including laws,
regulations and policies concerning taxes, banking,
capital, liquidity, proper accounting treatment,
securities and insurance, and the application
thereof by regulatory bodies and the impact of
changes in generally accepted accounting
principles;
- technological changes;
- changes in consumer spending and savings habits;
- regulatory or judicial proceedings;
- changes in asset quality; and
- our success in managing the risks involved in the
foregoing.
If one or more of the factors affecting our forward-looking
information and statements proves incorrect, then our actual
results, performance or achievements could differ materially
from those expressed in, or implied by, forward-looking
information and statements contained in this prospectus and the
accompanying prospectus supplement. Therefore, we and the
Trusts caution you not to place undue reliance on any forward-
looking information and statements.
Neither we nor the Trusts intend to update any forward-
looking information and statements, whether written or oral, to
reflect change. All forward-looking statements attributable to
us or the Trusts are expressly qualified by these cautionary
statements.
Operating earnings, cash earnings and core revenue, which
are included and defined in certain documents incorporated
herein by reference, and the related ratios using these measures
are not a substitute for other financial measures determined in
accordance with generally accepted accounting principles.
Because all companies do not calculate these measures in the
same fashion, these measures as presented may not be comparable
to other similarly titled measures of other companies.
PROSPECTUS SUMMARY
This summary provides a brief overview of us and the Trusts
and all material terms of the offered securities that are known
as of the date of this prospectus. For more complete
information about us and the Trusts and a more complete
understanding of the terms of the offered securities, before
making your investment decision, you should carefully read:
- this prospectus, which explains the general terms
of the securities that we and the Trusts may offer;
- the accompanying prospectus supplement, which
explains the specific terms of the securities
being offered and which may update or change
information in this prospectus; and
- the documents referred to in "Where You Can Find
More Information" for information about us,
including our financial statements.
SOVEREIGN BANCORP, INC.
We are a Pennsylvania business corporation and the holding
company for Sovereign Bank, a federal savings bank. As of
June 30, 2001, we had total consolidated assets, deposits and
shareholders' equity of approximately $34.4 billion,
$23.3 billion and $2.1 billion, respectively.
We conduct our operations principally through our
subsidiary, Sovereign Bank. Sovereign Bank's primary business
consists of attracting deposits from its network of community
banking offices, and originating small business and middle
market commercial and asset-based loans, consumer and
residential mortgage loans and home equity lines of credit in
Pennsylvania, New Jersey, Delaware and New England.
Our principal executive offices are located at 2000 Market
Street, Philadelphia, Pennsylvania 19103, and our telephone
number is (215) 557-4630.
THE SECURITIES WE MAY OFFER
We may use this prospectus to offer up to $1,000,000,000
of:
- debt securities;
- preferred stock;
- depositary shares;
- common stock;
- warrants;
- stock purchase contracts; and
- stock purchase units.
A prospectus supplement will describe the specific types,
amounts, prices, and detailed terms of any of these offered
securities.
THE TRUSTS
Each Trust is a statutory business trust formed under
Delaware law pursuant to a separate declaration of trust
executed by us, as sponsor for such Trust, and the trustees of
such Trust and the filing of a certificate of trust with the
Delaware Secretary of State.
Unless an accompanying prospectus supplement provides
otherwise, each Trust exists for the sole purposes of:
- issuing the trust preferred securities;
- investing the gross proceeds of the sale of the
trust preferred securities in a specific series of
our subordinated debt securities; and
- engaging in only those other activities necessary
or incidental thereto.
All of the common securities of each Trust will be owned by
us. The trust common securities will rank on a parity, and
payments will be made thereon pro rata, with the trust preferred
securities, except that upon the occurrence and continuance of
an event of default under the applicable declaration of trust,
the rights of the holders of the applicable trust common
securities to payment in respect of distributions and payments
upon liquidation, redemption and otherwise will be subordinated
to the rights of the holders of the applicable trust preferred
securities.
We will acquire trust common securities having an aggregate
liquidation amount equal to a minimum of 3% of the total capital
of each Trust. Each Trust will have a term of at least 20 but
not more than 50 years, but may terminate earlier as provided in
the applicable declaration of trust. Each Trust's business and
affairs will be conducted by the trustees. The holder of the
trust common securities will be entitled to appoint, remove or
replace any of, or increase or reduce the number of, the
trustees of each Trust. The duties and obligations of the
trustees shall be governed by the declaration of trust. At
least one of the trustees of each Trust will be one of our
employees or officers who will act as the administrative
trustee. One trustee of each Trust will be a financial
institution that is not affiliated with us, which shall act as
property trustee and as indenture trustee for the purposes of
the Trust Indenture Act of 1939, as amended, pursuant to the
terms set forth in a prospectus supplement. In addition, unless
the property trustee maintains a principal place of business in
the State of Delaware and otherwise meets the requirements of
applicable law, one trustee of each Trust will be a legal entity
having a principal place of business in, or an individual
resident of, the State of Delaware. We will pay all fees and
expenses related to each Trust and the offering of the trust
preferred securities. Unless otherwise set forth in the
prospectus supplement, the property trustee will be The Bank of
New York, and the Delaware trustee will be The Bank of New York,
Delaware. The office of the Delaware trustee in the State of
Delaware is White Clay Center, Newark, Delaware 19711. The
principal place of business of each Trust is 103 Foulk Road,
Suite 2000, Wilmington, Delaware 19803.
THE SECURITIES THE TRUSTS MAY OFFER
Each Trust may use this prospectus to offer up to $1,000,000,000
of trust preferred securities.
A prospectus supplement will describe the specific types,
amounts, prices, and detailed terms of any of the trust
preferred securities.
USE OF PROCEEDS
Except as otherwise described in any prospectus supplement,
we will use the net proceeds from the sale of the offered
securities for general corporate purposes, which may include
working capital, capital expenditures, repayment of existing
indebtedness, financing possible future acquisitions,
repurchasing shares of our common stock, and providing advances
to or investments in Sovereign Bank and other direct or indirect
subsidiaries. The amounts and timing of our application of the
proceeds will depend upon many factors, including the funding
requirements of Sovereign Bank and other direct or indirect
subsidiaries, the availability of other funds, and the existence
of acquisition opportunities. Pending these uses, we expect to
invest the net proceeds in short-term, interest-bearing
securities.
OUR RATIO OF EARNINGS TO FIXED CHARGES
We computed our ratio of earnings to fixed charges by
dividing earnings by fixed charges on a consolidated basis. We
computed our ratio of earnings to combined fixed charges and
preferred stock dividends by dividing earnings by the sum of
fixed charges and preferred stock dividend requirements.
Earnings consist primarily of income before income taxes
adjusted for fixed charges. Fixed charges consist primarily of
interest expense on short-term and long-term borrowings.
<table>
<caption>
Six Months
Ended Year Ended December 31,
June 30, 2001 2000(2) 1999 1998 1997 1996
<s> <c> <c> <c> <c> <c> <c>
Ratio of Earnings to Fixed Charges
Excluding interest on deposits... 1.18x -- 1.47x 1.49x 1.44x 1.49x
Including interest on deposits... 1.07x -- 1.27x 1.24x 1.22x 1.22x
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends (1)
Excluding interest on deposits... 1.18x -- 1.47x 1.48x 1.41x 1.44x
Including interest on deposits... 1.07x -- 1.27x 1.24x 1.21x 1.20x
</table>
_______________
(1) On May 15, 1998, we redeemed all outstanding shares of our
6-1/4% Cumulative Convertible Preferred Stock, Series B at
a redemption price of $52.188 per share. Substantially all
holders of the Series B Preferred Stock converted their
shares of preferred stock to shares of our common stock.
(2) Fixed charges exceeded earnings by $106.2 million for the
year ended December 31, 2000.
DESCRIPTION OF COMMON STOCK
We may issue, either separately or together with other
securities, shares of common stock. Under our articles of
incorporation, we are authorized to issue up to 400,000,000
shares of common stock. Upon our receipt of the full specified
purchase price therefor, the common stock will be fully paid and
nonassessable. A prospectus supplement relating to an offering
of common stock, or other securities convertible or exchangeable
for, or exercisable into, common stock, will describe the
relevant terms, including the number of shares offered, any
initial offering price, and market price and dividend
information, as well as, if applicable, information on other
related securities. See "Description of Capital Securities"
below.
DESCRIPTION OF PREFERRED STOCK
The following briefly summarizes the material terms of our
preferred stock, other than pricing and related terms disclosed
for a particular issuance in an accompanying prospectus
supplement. You should read the particular terms of any series
of preferred stock we offer in any prospectus supplement
relating to such series, together with the more detailed
provisions of our articles of incorporation and the statement
with respect to shares relating to each particular series of
preferred stock for provisions that may be important to you.
The statement with respect to shares relating to each particular
series of preferred stock offered by an accompanying prospectus
supplement and this prospectus will be filed as an exhibit to a
document incorporated by reference in the registration
statement, of which this prospectus forms a part. The
prospectus supplement will also state whether any of the terms
summarized below do not apply to the series of preferred stock
being offered.
General
Under our articles of incorporation, our board of directors
is authorized to issue shares of preferred stock in one or more
series, and to establish from time to time a series of preferred
stock with the following terms specified:
- the number of shares to be included in the series;
- the designation, powers, preferences and rights of
the shares of the series; and
- the qualifications, limitations or restrictions of
such series, except as otherwise stated in the
articles of incorporation.
Prior to the issuance of any series of preferred stock, our
board of directors will adopt resolutions creating and
designating the series as a series of preferred stock and the
resolutions will be filed in a statement with respect to shares
as an amendment to our articles of incorporation. The term
"board of directors" includes any duly authorized committee.
The rights of holders of the preferred stock offered may be
adversely affected by the rights of holders of any shares of
preferred stock that may be issued in the future. Our board of
directors may cause shares of preferred stock to be issued in
public or private transactions for any proper corporate purpose.
Examples of proper corporate purposes include issuances to
obtain additional financing in connection with acquisitions or
otherwise, and issuances to our and our subsidiaries' officers,
directors and employees pursuant to benefit plans or otherwise.
Shares of preferred stock we issue may have the effect of
rendering more difficult or discouraging a transaction to
acquire us which is deemed undesirable by our board of
directors.
The preferred stock will be, when issued, fully paid and
nonassessable. Unless the particular prospectus supplement
states otherwise, holders of each series of preferred stock will
not have any preemptive or subscription rights to acquire any
other shares of our capital stock.
The transfer agent, registrar, dividend disbursing agent
and redemption agent for shares of each series of preferred
stock will be named in the prospectus supplement relating to
such series.
Rank
Unless otherwise specified in the prospectus supplement
relating to the shares of any series of preferred stock, such
shares will rank on an equal basis with each other series of
preferred stock and prior to the common stock as to dividends
and distributions of assets.
Dividends
Unless the particular prospectus supplement states
otherwise, holders of each series of preferred stock will be
entitled to receive cash dividends, when, as and if declared by
our board of directors out of funds legally available for
dividends. The rates and dates of payment of dividends will be
set forth in the prospectus supplement relating to each series
of preferred stock. Dividends will be payable to holders of
record of preferred stock as they appear on our books or, if
applicable, the records of the depositary referred to below
under "Description of Depositary Shares," on the record dates
fixed by our board of directors. Dividends on any series of
preferred stock may be cumulative or noncumulative.
We may not declare, pay or set apart for payment dividends
on the preferred stock unless full dividends on any other series
of preferred stock that ranks on an equal or senior basis have
been paid or sufficient funds have been set apart for payment
for:
- all prior dividend periods of the other series of
preferred stock that pay dividends on a cumulative
basis; or
- the immediately preceding dividend period of the
other series of preferred stock that pay dividends
on a noncumulative basis.
Partial dividends declared on shares of preferred stock and
any other series of preferred stock ranking on an equal basis as
to dividends will be declared pro rata. A pro rata declaration
means that the ratio of dividends declared per share to accrued
dividends per share will be the same for all such series of
preferred stock.
Similarly, we may not declare, pay or set apart for payment
non-stock dividends or make other payments on the common stock
or any of our other stock ranking junior to the preferred stock
unless full dividends on all series of preferred stock have been
paid or set apart for payment for:
- all prior dividend periods if the preferred stock
pays dividends on a cumulative basis; or
- the immediately preceding dividend period if the
preferred stock pays dividends on a noncumulative
basis.
Conversion and Exchange
The prospectus supplement for any series of preferred stock
will state the terms, if any, on which shares of that series are
convertible into or exchangeable for shares of our common stock.
Redemption
If so specified in the applicable prospectus supplement, a
series of preferred stock may be redeemable at any time, in
whole or in part, at our option or at the option of the holder
thereof, or may be mandatorily redeemed.
Any partial redemptions of preferred stock will be made in
a way that our board of directors decides is equitable.
Unless we default in the payment of the redemption price,
dividends will cease to accrue after the redemption date on
shares of preferred stock called for redemption and all rights
of holders of such shares will terminate except for the right to
receive the redemption price.
Liquidation Preference
Upon our voluntary or involuntary liquidation, dissolution
or winding up, holders of each series of preferred stock will be
entitled to receive distributions upon liquidation in the amount
set forth in the prospectus supplement relating to such series
of preferred stock, plus an amount equal to any accrued and
unpaid dividends. Such distributions will be made before any
distribution is made on any securities ranking junior to the
preferred stock with respect to liquidation, including common
stock.
If the liquidation amounts payable relating to the
preferred stock of any series and any other securities ranking
on a parity regarding liquidation rights are not paid in full,
the holders of the preferred stock of such series and such other
securities will share in any such distribution of our available
assets on a ratable basis in proportion to the full liquidation
preferences. Holders of such series of preferred stock will not
be entitled to any other amounts from us after they have
received their full liquidation preference.
Voting Rights
The holders of shares of preferred stock will have no
voting rights, except:
- as otherwise stated in the prospectus supplement;
- as otherwise stated in the statement with respect
to shares establishing such series; or
- as required by applicable law.
DESCRIPTION OF DEPOSITARY SHARES
The following briefly summarizes the material provisions of
the deposit agreement and of the depositary shares and
depositary receipts, other than pricing and related terms
disclosed for a particular issuance in an accompanying
prospectus supplement. This description is not complete and is
subject to, and qualified in its entirety by reference to, all
provisions of the deposit agreement, depositary shares and
depositary receipts. You should read the particular terms of
any depositary shares and any depositary receipts that we offer
and any deposit agreement relating to a particular series of
preferred stock described in more detail in a prospectus
supplement. The prospectus supplement will also state whether
any of the generalized provisions summarized below do not apply
to the depositary shares or depositary receipts being offered.
A copy of the form of deposit agreement, including the form of
depositary receipt, will be filed as an exhibit to a document
incorporated by reference in the registration statement of which
this prospectus forms a part. You should read the more detailed
provisions of the deposit agreement and the form of depositary
receipt for provisions that may be important to you.
General
We may, at our option, elect to offer fractional shares of
preferred stock, rather than full shares of preferred stock. In
such event, we will issue receipts for depositary shares, each
of which will represent a fraction of a share of a particular
series of preferred stock.
The shares of any series of preferred stock represented by
depositary shares will be deposited under a deposit agreement
between us and a bank or trust company we select and that has
its principal office in the United States and a combined capital
and surplus of at least $50,000,000, as preferred stock
depositary. Each owner of a depositary share will be entitled
to all the rights and preferences of the underlying preferred
stock, including any dividend, voting, redemption, conversion
and liquidation rights described in the particular prospectus
supplement, in proportion to the applicable fraction of a share
of preferred stock represented by such depositary share.
The depositary shares will be evidenced by depositary
receipts issued pursuant to the deposit agreement. Depositary
receipts will be distributed to those persons purchasing the
fractional shares of preferred stock in accordance with the
terms of the applicable prospectus supplement.
Dividends and Other Distributions
The preferred stock depositary will distribute all cash
dividends or other cash distributions received in respect of the
deposited preferred stock to the record holders of depositary
shares relating to such preferred stock in proportion to the
number of such depositary shares owned by such holders.
The preferred stock depositary will distribute any property
received by it other than cash to the record holders of
depositary shares entitled thereto. If the preferred stock
depositary determines that it is not feasible to make such
distribution, it may, with our approval, sell such property and
distribute the net proceeds from such sale to such holders.
Redemption of Preferred Stock
If a series of preferred stock represented by depositary
shares is to be redeemed, the depositary shares will be redeemed
from the proceeds received by the preferred stock depositary
resulting from the redemption, in whole or in part, of such
series of preferred stock. The depositary shares will be
redeemed by the preferred stock depositary at a price per
depositary share equal to the applicable fraction of the
redemption price per share payable in respect of the shares of
preferred stock so redeemed.
Whenever we redeem shares of preferred stock held by the
preferred stock depositary, the preferred stock depositary will
redeem as of the same date the number of depositary shares
representing shares of preferred stock so redeemed. If fewer
than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by the
preferred stock depositary by lot or ratably or by any other
equitable method as the preferred stock depositary may decide.
Voting Deposited Preferred Stock
Upon receipt of notice of any meeting at which the holders
of any series of deposited preferred stock are entitled to vote,
the preferred stock depositary will mail the information
contained in such notice of meeting to the record holders of the
depositary shares relating to such series of preferred stock.
Each record holder of such depositary shares on the record date
will be entitled to instruct the preferred stock depositary to
vote the amount of the preferred stock represented by such
holder's depositary shares. The preferred stock depositary will
try to vote the amount of such series of preferred stock
represented by such depositary shares in accordance with such
instructions.
We will agree to take all actions that the preferred stock
depositary determines are necessary to enable the preferred
stock depositary to vote as instructed. The preferred stock
depositary will abstain from voting shares of any series of
preferred stock held by it for which it does not receive
specific instructions from the holders of depositary shares
representing such preferred shares.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary
shares and any provision of the deposit agreement may at any
time be amended by agreement between us and the preferred stock
depositary. However, any amendment that materially and
adversely alters any existing right of the holders of depositary
shares will not be effective unless such amendment has been
approved by the holders of at least a majority of the depositary
shares then outstanding. Every holder of an outstanding
depositary receipt at the time any such amendment becomes
effective shall be deemed, by continuing to hold such depositary
receipt, to consent and agree to such amendment and to be bound
by the deposit agreement, which has been amended thereby. The
deposit agreement may be terminated only if:
- all outstanding depositary shares have been
redeemed; or
- a final distribution in respect of the preferred
stock has been made to the holders of depositary
shares in connection with our liquidation,
dissolution or winding up.
Charges of Preferred Stock Depositary; Taxes and Other
Governmental Charges
We will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary
arrangements. We also will pay charges of the depositary in
connection with the initial deposit of preferred stock and any
redemption of preferred stock. Holders of depositary receipts
will pay other transfer and other taxes and governmental charges
and such other charges, including a fee for the withdrawal of
shares of preferred stock upon surrender of depositary receipts,
as are expressly provided in the deposit agreement to be for
their accounts.
Prospective purchasers of depositary shares should be aware
that special tax, accounting and other issues may be applicable
to instruments such as depositary shares.
Resignation and Removal of Depositary
The preferred stock depositary may resign at any time by
delivering to us notice of its intent to do so, and we may at
any time remove the preferred stock depositary, any such
resignation or removal to take effect upon the appointment of a
successor preferred stock depositary and its acceptance of such
appointment. Such successor preferred stock depositary must be
appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company
having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
Miscellaneous
The preferred stock depositary will forward all reports and
communications from us which are delivered to the preferred
stock depositary and which we are required to furnish to the
holders of the deposited preferred stock.
Neither we nor the preferred stock depositary will be
liable if we or the preferred stock depositary is prevented or
delayed by law or any circumstances beyond our or its control in
performing our or its obligations under the deposit agreement.
Our obligations and the obligations of the preferred stock
depositary under the deposit agreement will be limited to
performance in good faith of the duties thereunder and we and
the preferred stock depositary will not be obligated to
prosecute or defend any legal proceeding in respect of any
depositary shares, depositary receipts or shares of preferred
stock unless satisfactory indemnity is furnished. We and the
preferred stock depositary may rely upon written advice of
counsel or accountants, or upon information provided by holders
of depositary receipts or other persons believed to be competent
and on documents believed to be genuine.
DESCRIPTION OF DEBT SECURITIES
The following briefly summarizes the material provisions of
the indentures and the debt securities, other than pricing and
related terms disclosed for a particular issuance in an
accompanying prospectus supplement. You should read the more
detailed provisions of the applicable indenture and supplemental
indentures, if any, including the defined terms, for the
provisions that may be important to you. You should also read
the particular terms of a series of debt securities, which will
be described in more detail in an accompanying prospectus
supplement. So that you may easily locate the more detailed
provisions, the numbers in parentheses below refer to sections
in the applicable indenture or, if no indenture is specified, to
sections in each of the indentures. Whenever particular
sections or defined terms of the applicable indenture are
referred to, such sections or defined terms are incorporated
into this prospectus by reference, and the statement in this
prospectus is qualified by that reference.
General
The debt securities offered by this prospectus will be our
secured or unsecured obligations, and will be either senior debt
or subordinated debt, or junior subordinated debt. Senior debt
will be issued under a senior indenture. Subordinated debt will
be issued under a subordinated indenture. Junior subordinated
debt will be issued under a junior subordinated indenture. The
senior indenture, the subordinated indenture, and the junior
subordinated indenture are sometimes referred to in this
prospectus individually as an "indenture" and collectively as
the "indentures." Except as specified in "Senior Debt,"
"Subordination," the fifth following paragraph or otherwise
below and in any applicable prospectus supplement, any junior
subordinated debt will be subject to the same terms and
conditions as subordinated debt and will be issued under a
junior subordinated indenture filed as an exhibit to this
registration statement. Unless the context provides otherwise,
references to the subordinated indenture shall also be deemed to
be references to the junior subordinated indenture. The
indentures have been filed with the SEC and are incorporated by
reference in the registration statement of which this prospectus
forms a part. To obtain copies of the indentures, please see
"Where You Can Find More Information" or contact the applicable
trustee.
Unless otherwise provided for a particular issuance in an
accompanying prospectus supplement, the trustee under the
indentures will be BNY Midwest Trust Company.
The indentures do not limit the total principal amount of
debt securities that may be issued and the indentures provide
that debt securities of any series may be issued up to the total
principal amount which we authorize from time to time. Except
as may be set forth in a prospectus supplement, neither the
indentures nor the debt securities will limit or otherwise
restrict the amount of other indebtedness which may be incurred
or the other securities which we or any of our affiliates may
issue.
Because we are a holding company, the claims of creditors
of our subsidiaries, including Sovereign Bank, will have a
priority over our rights as a shareholder of Sovereign Bank, and
also over the rights of our creditors, including the holders of
our debt securities, to participate in the assets of the
subsidiary upon the subsidiary's liquidation or
recapitalization, except to the extent that we may be a creditor
with recognized claims against the subsidiary. In addition,
there are certain regulatory limitations on the payment of
dividends and on loans and other transfers from our banking
subsidiaries to us.
The amount of debt securities offered by this prospectus
will be limited to the amounts described on the cover of this
prospectus. The indentures provide that our senior,
subordinated or junior subordinated debt securities may be
issued in one or more series with different terms, in each case
as we authorize from time to time. (Section 301)
The senior securities may be unsecured or secured by our
assets, including the stock of Sovereign Bank we own, and,
except as may be set forth in a prospectus supplement, will rank
on an equal basis with our other unsecured senior debt. The
subordinated securities and junior subordinated securities will
be unsecured and, except as may be set forth in a prospectus
supplement, will rank on an equal basis with our other
subordinated debt or junior subordinated debt, respectively,
and, together with such other subordinated debt or junior
subordinated debt, will be subordinate and junior in right of
payment to the prior payment in full of our senior debt (which
in the case of the junior subordinated debt will also include
subordinated debt) as described below under "Subordination."
The applicable prospectus supplement relating to any series
of debt securities will describe the following terms, where
applicable:
- the designation and any limit on the total
principal amount of such debt securities;
- the price (expressed as a percentage of the total
principal amount) at which such debt securities
will be issued;
- the date or dates on which such debt securities
will mature or method by which such dates can be
determined;
- the currency or currencies in which such debt
securities are being sold and are denominated and
the circumstances, if any, under which any debt
securities may be payable in a currency other than
the currency in which such debt securities are
denominated, and if so, the exchange rate, the
exchange rate agent and, if the holder of any such
debt securities may elect the currency in which
payments are to be made, the manner of such
election;
- the denomination in which any debt securities
which are registered securities will be issuable,
if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or
denominations in which any debt securities which
are bearer securities will be issuable, if other
than the denomination of $5,000;
- the rate or rates (which may be fixed or variable)
at which such debt securities will bear interest,
which rate may be zero in the case of certain debt
securities issued at an issue price representing a
discount from the principal amount payable at
maturity;
- the date from which interest on such debt
securities will accrue, the dates on which such
interest will be payable or method by which such
dates can be determined, the date on which payment
of such interest will commence and the
circumstances, if any, in which we may defer
interest payments;
- the dates on which, and the price or prices at
which, such debt securities will, pursuant to any
mandatory sinking fund provision, or may, pursuant
to any optional redemption or mandatory repayment
provisions, be redeemed or repaid and the other
terms and provisions of any such optional
redemption or mandatory repayment;
- any terms by which such debt securities may be
convertible into common stock (see "Description of
Common Stock"), preferred stock (see "Description
of Preferred Stock"), or any of our other capital
securities (see "Description of Capital
Securities") and, in case of debt securities
convertible into preferred stock, the terms of such
preferred stock;
- any terms by which the principal of such debt
securities will be exchangeable for capital
securities and any terms creating a securities fund
pursuant to which the proceeds of sales of capital
securities may be designated on our books for the
payment of any of the principal of such debt
securities;
- whether such debt securities are to be issuable as
bearer securities and/or registered securities and,
if issuable as bearer securities, the terms upon
which any bearer securities may be exchanged for
registered securities;
- whether such debt securities are to be issued in
the form of one or more temporary or permanent
global securities and, if so, the identity of the
depositary for such global security or securities;
- if a temporary global debt security is to be issued
with respect to such series, the extent to which,
and the manner in which, any interest payable on an
interest payment date prior to the issuance of a
permanent global security or definitive bearer
securities will be credited to the accounts of the
persons entitled to interest on the interest
payment date;
- if a temporary global security is to be issued with
respect to such series, the terms upon which
interests in such temporary global security may be
exchanged for interests in a permanent global
security or for definitive debt securities of the
series and the terms upon which interests in a
permanent global security, if any, may be exchanged
for definitive debt securities of the series;
- any additional restrictive covenants included for
the benefit of holders of such debt securities;
- any additional events of default provided with
respect to such debt securities;
- information with respect to book-entry procedures,
if any;
- whether the debt securities will be repayable at
the option of the holder in the event we are
subject to a change in control;
- any other terms of the debt securities not
inconsistent with the provisions of the applicable
indenture;
- the terms of any securities being offered together
with or separately from the debt securities;
- if such debt securities are original issue discount
securities, the accreted or notational value
thereof (or method of determining such amount) upon
acceleration of maturity;
- any guarantees issued with respect to such debt
securities; and
- any security interests or other liens granted to
secure such debt securities.
Such prospectus supplement will also describe any special
provisions for the payment of additional amounts with respect to
the debt securities and certain United States federal income tax
consequences and other special considerations applicable to such
series of debt securities. If a debt security is denominated in
a foreign currency, such debt security may not trade on a U.S.
national securities exchange unless and until the SEC has
approved appropriate rule changes pursuant to the Securities
Exchange Act of 1934 to accommodate the trading of such debt
security.
Form, Exchange, Registration and Transfer
Debt securities of a series may be issuable in definitive
form solely as registered securities, solely as bearer
securities or as both registered securities and bearer
securities. Unless otherwise indicated in the prospectus
supplement, bearer securities other than bearer securities in
temporary or permanent global form will have interest coupons
attached. (Section 201) Each indenture also provides that bearer
securities or registered securities of a series may be issuable
in permanent global form. (Section 203) See "Permanent Global
Securities."
Registered securities of any series will be exchangeable
for other registered securities of the same series of authorized
denominations and of a like total principal amount, tenor and
terms. In addition, if debt securities of any series are
issuable as both registered securities and bearer securities, at
the option of the holder upon request confirmed in writing, and
subject to the terms of the applicable indenture, bearer
securities (with all unmatured coupons, except as provided
below, and all matured coupons in default) of such series will
be exchangeable into registered securities of the same series of
any authorized denominations and of a like aggregate principal
amount, tenor and terms. Bearer securities surrendered in
exchange for registered securities between the close of business
on a regular record date or a special record date and the
relevant date for payment of interest shall be surrendered
without the coupon relating to such date for payment of
interest, and interest will not be payable in respect of the
registered security issued in exchange for such bearer security,
but will be payable only to the holder of such coupon when due
in accordance with the terms of the applicable indenture.
Bearer securities will not be issued in exchange for registered
securities. (Section 305) Each bearer security, other than a
temporary global bearer security, and each interest coupon will
bear an appropriate legend as will be specified in an applicable
prospectus supplement.
Debt securities may be presented for exchange as provided
above, and registered securities may be presented for
registration of transfer (duly endorsed or accompanied by a
satisfactory written instrument of transfer), at the office of
the security registrar or at the office of any transfer agent we
designate for such purpose with respect to such series of debt
securities, without service charge and upon payment of any taxes
and other governmental charges. (Section 305) If the
applicable prospectus supplement refers to any transfer agent
(in addition to the security registrar) we initially designate
with respect to any series of debt securities, we may at any
time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer
agent (or security registrar) acts, except that, if debt
securities of a series are issuable solely as registered
securities, we will be required to maintain a transfer agent in
each place of payment for such series and, if debt securities of
a series are issuable as bearer securities, we must maintain (in
addition to the security registrar) a transfer agent in a place
of payment for such series located outside the United States.
We may at any time designate additional transfer agents with
respect to any series of debt securities. (Section 1002)
We shall not be required to:
- issue, register the transfer of, or exchange debt
securities of any particular series to be redeemed
or exchanged for capital securities for a period of
15 days preceding the first publication of the
relevant notice of redemption or, if registered
securities are outstanding and there is no
publication, the mailing of the relevant notice of
redemption;
- register the transfer of or exchange any
registered security selected for redemption or
exchange in whole or in part, except the unredeemed
or unexchanged portion of any registered security
being redeemed or exchanged in part; or
- exchange any bearer security selected for
redemption or exchange except that such a bearer
security may be exchanged for a registered security
of like tenor and terms of that series, provided
that such registered security shall be surrendered
for redemption or exchange. (Section 305)
Additional information regarding restrictions on the
issuance, exchange and transfer of, and special United States
federal income tax considerations relating to, bearer securities
will be set forth in the applicable prospectus supplement.
Temporary Global Securities
If so specified in the applicable prospectus supplement,
all or any portion of the debt securities of a series which are
issuable as bearer securities will initially be represented by
one or more temporary global securities, without interest
coupons, to be deposited with a common depositary such as
Euroclear System and Clearstream Banking, societe anonyme,
Luxembourg for credit to designated accounts. On and after the
date determined as provided in any such temporary global
security and described in the applicable prospectus supplement,
but within a reasonable time, each such temporary global
security will be exchangeable for definitive bearer securities,
definitive registered securities or all or a portion of a
permanent global bearer security, or any combination thereof, as
specified in the prospectus supplement. No definitive bearer
security or permanent global bearer security delivered in
exchange for a portion of a temporary global security shall be
mailed or otherwise delivered to any location in the United
States in connection with such exchange.
Additional information regarding restrictions on and
special United States federal income tax consequences relating
to temporary global securities will be set forth in the
applicable prospectus supplement.
Permanent Global Securities
If any debt securities of a series are issuable in
permanent global form, the applicable prospectus supplement will
describe the circumstances, if any, under which beneficial
owners of interests in any such permanent global security may
exchange their interests for debt securities of such series and
of like tenor and principal amount of any authorized form and
denomination. Principal of and any premium and interest on a
permanent global security will be payable in the manner
described in the applicable prospectus supplement.
Payments and Paying Agents
Unless otherwise indicated in the applicable prospectus
supplement:
- payments of principal of and premium, if any, and
interest, if any, on bearer securities will be
payable in the currency designated in the
prospectus supplement, subject to any applicable
laws and regulations, at such paying agencies
outside the United States as we may appoint from
time to time;
- such payments may be made, at the option of the
holder, by a check in the designated currency or by
transfer to an account in the designated currency
maintained by the payee with a bank located outside
the United States; and
- payment of interest on bearer securities on any
interest payment date will be made only against
surrender of the coupon relating to such interest
payment date to a paying agent outside the United
States. (Section 1001)
No payment with respect to any bearer security will be made
at any office or paying agency we maintain in the United States
nor will any such payment be made by transfer to an account, or
by mail to an address, in the United States. Notwithstanding
the foregoing, payments of principal of and premium, if any, and
interest, if any, on bearer securities denominated and payable
in U.S. dollars will be made in U.S. dollars at an office or
agency we designate in the United States, if payment of the full
amount thereof in U.S. dollars at all paying agencies outside
the United States is illegal or effectively precluded by
exchange controls or other similar restrictions, and the trustee
receives an opinion of counsel that such payment within the
United States is legal. (Section 1002)
Unless otherwise indicated in the applicable prospectus
supplement, payment of principal of and premium, if any, and
interest, if any, on a registered security will be payable in
the currency designated in the prospectus supplement, and
interest will be payable at the office of such paying agent or
paying agents as we may appoint from time to time, except that,
at our option, payment of any interest may be made by a check in
such currency mailed to the holder at the holder's registered
address or by wire transfer to an account in such currency
designated by the holder in writing not less than ten days prior
to the date of payment. Unless otherwise indicated in the
applicable prospectus supplement, payment of any installment of
interest on a registered security will be made to the person in
whose name such registered security is registered at the close
of business on the regular record date for such payments.
(Section 307) Unless otherwise indicated in the applicable
prospectus supplement, principal payable at maturity will be
paid to the registered holder upon surrender of the registered
security at the office of a duly appointed paying agent.
The paying agents outside the United States we initially
appoint for a series of debt securities will be named in the
applicable prospectus supplement. We may terminate the
appointment of any of the paying agents from time to time,
except that we will maintain at least one paying agent outside
the United States so long as any bearer securities are
outstanding where bearer securities may be presented for payment
and may be surrendered for exchange, provided that so long as
any series of debt securities is listed on the stock exchange of
the United Kingdom and the Republic of Ireland or the Luxembourg
Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, we will
maintain a paying agent in London or Luxembourg or any other
required city located outside the United States, as the case may
be, for such series of debt securities. (Section 1002)
All moneys we pay to a paying agent for the payment of
principal of or premium, if any, or interest, if any, on any
debt security that remains unclaimed at the end of two years
after such principal, premium or interest shall have become due
and payable will, at our request, be repaid to us, and the
holder of such debt security or any coupon will thereafter look
only to us for payment. (Section 1003)
Covenants Contained in Indentures
Unless an accompanying prospectus supplement provides
otherwise, the indentures will provide that we may not:
- sell, transfer, or otherwise dispose of any shares
of voting stock of Sovereign Bank or permit
Sovereign Bank to issue, sell, or otherwise dispose
of any shares of its voting stock unless we retain
direct ownership of at least 80% of the voting
stock;
- permit Sovereign Bank to merge or consolidate
unless we directly own at least 80% of the voting
stock of the surviving entity; or
- convey or transfer its properties and assets
substantially as an entirety to any other entity
unless we directly own at least 80% of the voting
stock of the entity. (Section 1005)
With the consent of the holders of a majority in aggregate
principal amount of the outstanding debt securities of each
series issued under the indentures, these requirements may be
modified so as to reduce the required percentage of ownership
from 80% to a majority. (Section 902)
The senior indenture provides that we will not create,
assume, incur, or suffer to exist, as security for indebtedness
for borrowed money, any mortgage, pledge, encumbrance or lien or
charge of any kind upon more than 20% of the voting stock of
Sovereign Bank (other than directors' qualifying shares) without
effectively providing that each series of senior securities be
secured equally and ratably with (or prior to) such
indebtedness. (Section 1004 of the senior indenture) The
subordinated indenture does not contain a similar covenant.
We are not restricted by the indentures from incurring,
assuming or becoming liable for any type of debt or other
obligations, from creating liens on our property (other than, in
the case of the senior indentures, on the voting stock of
Sovereign Bank as described above) for any purposes or from
paying dividends or making distributions on our capital stock or
purchasing or redeeming our capital stock. The indentures do
not require the maintenance of any financial ratios or specific
levels of net worth or liquidity. In addition, the indentures
do not contain any provision which would require us to
repurchase, redeem or otherwise modify the terms of any of our
debt securities upon a change in control or other events
involving us which may adversely affect the creditworthiness of
the debt securities.
The above covenants may be modified by, or additional
covenants may be provided for in, a supplemental indenture, as
will be further described in an applicable prospectus
supplement.
Modification and Waiver
Except as to the above, and certain other modifications and
amendments not adverse to holders of debt securities,
modifications and amendments of and waivers of compliance with
certain restrictive provisions under each indenture may be made
only with the consent of the holders of not less than 66 2/3% in
principal amount of the outstanding debt securities of each
series affected by such modification, amendment or waiver.
No such modification or amendment may, without the consent
of the holder of each security so affected:
- change the stated maturity of the principal or any
installment of principal or any installment of
interest, if any;
- reduce the amount of principal or interest payable
on the debt security, or any premium payable upon
its redemption or repayment or, in the case of an
original issue discount security, the amount of
principal payable upon the acceleration of its
maturity;
- change the place of payment or the currency in
which principal or interest is payable, if any;
- impair the right of any holders to sue for the
enforcement of any payment of the principal,
premium, if any, and interest, if any, or adversely
affect the holder's right of repayment, if any, at
the option of the holder;
- reduce the percentage in principal amount of
outstanding debt securities of any series, whose
holders must consent for modification or amendment
of the applicable indenture, or for waiver of
compliance with certain provisions of the
applicable indenture, or for waiver of certain
defaults;
- reduce the requirements contained in the applicable
indenture for quorum or voting;
- in the case of debt securities exchangeable for
capital securities, impair any right to the
delivery of capital securities in exchange for such
debt securities or the right to sue for the
enforcement of any such delivery or, in the case of
debt securities convertible into common stock or
preferred shares, impair any right to convert such
debt securities; or
- modify any of the above provisions. (Section 902)
Each indenture contains provisions for convening meetings
of the holders of debt securities of a series issued thereunder
if debt securities of that series are issuable in whole or in
part as bearer securities. (Section 1601) A meeting may be
called at any time by the trustee for such debt securities, or
upon our request or the holders of at least 10% in principal
amount of the outstanding debt securities of such series, upon
notice given in accordance with the applicable indenture.
(Section 1602)
Except as limited by the preceding paragraph:
- any resolution presented at a meeting or adjourned
meeting at which a quorum is present may be adopted
by the affirmative vote of the holders of a
majority in principal amount of the outstanding
debt securities of that series;
- any resolution with respect to any consent or
waiver which may be given only by the holders of
not less than 66 2/3% in principal amount of the
outstanding debt securities of a series issued
under an indenture may be adopted at a meeting or
an adjourned meeting at which a quorum is present
only by the affirmative vote of the holders of
66 2/3% in principal amount of such outstanding
debt securities of that series; and
- any resolution with respect to any demand, consent,
waiver or other action which may be made, given or
taken by the holders of a specified percentage,
which is less than a majority, in principal amount
of the outstanding debt securities of a series
issued under an indenture may be adopted at a
meeting or adjourned meeting at which a quorum is
present by the affirmative vote of the holders of
the specified percentage in principal amount of the
outstanding debt securities of that series.
(Section 1604)
Any resolution passed or decision taken at any meeting of
holders of debt securities of any series duly held in accordance
with the applicable indenture will be binding on all holders of
debt securities of that series and the related coupons issued
under that indenture. The quorum at any meeting of holders of a
series of debt securities called to adopt a resolution, and at
any reconvened meeting, will be persons holding or representing
a majority in principal amount of the outstanding debt
securities of such series.
If any action is to be taken at such meeting with respect
to a consent or waiver which may be given by the holders of not
less than 66 2/3% in principal amount of the outstanding debt
securities of a series, the persons holding or representing
66 2/3% in principal amount of the outstanding debt securities
of such series issued under that indenture will constitute a
quorum. (Section 1604)
Events of Default
Unless otherwise provided in the applicable prospectus
supplement, any series of senior securities issued under the
senior indenture will provide that the following shall
constitute events of default with respect to such series:
- default in payment of principal of or premium, if
any, on any senior security of such series when
due;
- default for 30 days in payment of interest, if any,
on any senior security of such series or related
coupon, if any, when due;
- default in the deposit of any sinking fund payment
on any senior security of such series when due;
- default in the performance of any other covenant in
such indenture, continued for 90 days after written
notice of the default by the trustee thereunder or
by the holders of at least 25% in principal amount
of the outstanding senior securities of such series
issued under that indenture; and
- certain events of our or Sovereign Bank's
bankruptcy, insolvency or reorganization.
(Section 501 of the senior indenture)
Unless otherwise provided in the applicable prospectus
supplement, any series of subordinated securities issued under
the subordinated indenture will provide that the only event of
default will be certain events of our bankruptcy. (Section 501
of the subordinated indenture) Unless specifically stated in the
applicable prospectus supplement for a particular series of
subordinated securities, there is no right of acceleration of
the payment of principal of the subordinated securities upon a
default in the payment of principal, premium, if any, or
interest, if any, or in the performance of any covenant or
agreement in the subordinated securities or subordinated
indenture. In the event of a default in the payment of
principal, premium, if any, or interest, if any, or in the
performance of any covenant (including, if applicable, any
covenant to deliver any capital securities required to be
delivered or any covenant to sell capital securities in a
secondary offering) or agreement in the subordinated securities
or subordinated indenture, the trustee, subject to certain
limitations and conditions, may institute judicial proceedings
to enforce payment of such principal, premium, if any, or
interest, if any, or to obtain the performance of such covenant
or agreement or any other proper remedy, including, in the case
of the failure to deliver capital securities, a proceeding to
collect money equal to the principal amount of any subordinated
securities for which capital securities were to be exchanged.
(Section 503 of the subordinated indenture)
We are required to file with each trustee annually an
officers' certificate as to the absence of certain defaults
under the terms of the indentures. (Section 1007 of the senior
indenture, Section 1004 of the subordinated indenture) Each
indenture provides that if an event of default shall occur and
be continuing, either the trustee or the holders of not less
than 25% in principal amount of the outstanding debt securities
of such series issued under that indenture may declare the
principal of all such debt securities (or in the case of
original issue discount series, such portion of the principal
amount thereof as may be specified in the terms thereof) to be
due and payable. (Section 502) In certain cases, the holders of
a majority in principal amount of the outstanding debt
securities of any series may, on behalf of the holders of all
debt securities of any such series and any related coupons,
waive any past default or event of default except a default in
payment of the principal of or premium, if any, on any of the
debt securities of such series and in respect of a covenant or
provision of the indenture which cannot be modified or amended
without the consent of the holder of each outstanding debt
security of such series or coupons affected. (Section 513)
Each indenture contains a provision entitling the trustee,
subject to the duty during default to act with the required
standard of care, to be indemnified by the holders of the debt
securities of any series or any related coupons before
proceeding to exercise any right or power under such indenture
at the request of such holders. (Section 603) Each indenture
provides that no holder of any debt securities of any series or
any related coupons may institute any proceeding, judicial or
otherwise, to enforce such indenture except in the case of
failure of the trustee, for 60 days, to act after it is given
notice of default, a request to enforce such indenture by the
holders of not less than 25% in aggregate principal amount of
the outstanding debt securities of such series, and an offer of
indemnity reasonable to the trustee. (Section 507) This
provision will not prevent any holder of debt securities or any
related coupons from enforcing payment of the principal,
premium, if any, and interest, if any, at their respective due
dates. (Section 508) The holders of a majority in aggregate
principal amount of the outstanding debt securities of any
series issued under an indenture may direct the time, method and
place of conducting any proceedings for any remedy available to
the trustee for such debt securities or exercising any trust or
power conferred on it with respect to the debt securities of
such series. However, such trustee may refuse to follow any
direction that conflicts with law or the indenture under which
it serves or which would be unjustly prejudicial to holders not
joining the proceeding. (Section 512)
Each indenture provides that the trustee will, within
90 days after the occurrence of a default with respect to any
series of debt securities known to it, give to the holders of
debt securities of such series notice of such default if not
cured or waived. Except in the case of a default in the payment
of principal of or premium, if any, or interest, if any, on any
debt securities of such series or any related coupons or in the
payment of any sinking fund installment with respect to debt
securities of such series or in the exchange of capital
securities for debt securities of such series, the trustee for
such debt securities shall be protected in withholding such
notice if it determines in good faith that the withholding of
such notice is in the interest of the holders of such debt
securities. (Section 602)
Defeasance
We may terminate certain of our obligations under each
indenture with respect to the debt securities of any series,
including our obligations to comply with the covenants described
under the heading "Covenants Contained in Indentures" above, on
the terms and subject to the conditions contained in the
indentures, by depositing in trust with the trustee money
and/or, to the extent such debt securities are denominated and
payable in U.S. dollars only, eligible instruments which,
through the payment of principal and interest in accordance with
their terms, will provide money in an amount sufficient to pay
the principal and premium, if any, and interest, if any, on such
debt securities, and any mandatory sinking fund, repayment or
analogous payments on the securities, on the scheduled due dates
for payment. Such deposit and termination is conditioned upon
our delivery of an opinion of counsel that the holders of such
debt securities will have no federal income tax consequences as
a result of such deposit and termination. Such termination will
not relieve us of our obligation to pay when due the principal
of or interest on such debt securities if such debt securities
of such series are not paid from the money or eligible
instruments held by the trustee for the payment thereof.
(Section 401) This is called "covenant defeasance." The
applicable prospectus supplement may further describe the
provisions, if any, permitting or restricting such defeasance
with respect to the debt securities of a particular series.
Senior Debt
Except as may be described in an applicable prospectus
supplement, senior debt is any obligation to our creditors, now
outstanding or subsequently incurred, other than:
- any obligation as to which the instrument creating
or evidencing it or pursuant to which it is
outstanding provides that such obligation is not
senior debt;
- obligations evidenced by debt securities issued
under the subordinated indenture (Section 101 of
the subordinated indenture) (except in the case of
the junior subordinated indenture (section 101 of
the junior subordinated indenture)); and
- obligations evidenced by debt securities issued
under the junior subordinated indenture.
Subordination
The subordinated securities or the junior subordinated
securities, as applicable, shall be subordinate and junior in
right of payment, to the extent set forth in the subordinated
indenture or the junior subordinated indenture, as applicable,
to all of our senior debt (as such term is defined above). In
the event that we default in the payment of any principal,
premium, if any, or interest, if any, on any senior debt when it
becomes due and payable, whether at maturity, or at a date fixed
for prepayment, or by declaration of acceleration or otherwise,
then, unless and until such default shall have been cured or
waived or shall have ceased to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made for principal, premium, if
any, or interest, if any, on the subordinated securities or the
junior subordinated securities, as applicable, or in respect of
any redemption, repayment, retirement, purchase or other
acquisition of any of the subordinated securities or the junior
subordinated indenture, as applicable. (Section 1801 of the
subordinated indenture or the junior subordinated securities, as
applicable) A series of subordinated debt securities may be
issued that is subordinate to the senior debt, but is senior as
to right of payment to some or all other series of subordinated
or junior subordinated debt securities.
In the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other
similar proceeding, relating to us, our creditors or our
property, any proceeding for our liquidation, dissolution or
other winding up, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings, any assignment
by us for the benefit of creditors, or any other marshalling of
our assets, all senior debt (including any interest accruing
after the commencement of any such proceedings) shall first be
paid in full before any payment or distribution, whether in
cash, securities or other property, shall be made on account of
the principal or interest on the subordinated securities or the
junior subordinated securities, as applicable. In such event,
any payment or distribution on account of the principal of or
interest on the subordinated securities or the junior
subordinated securities, as applicable, whether in cash,
securities or other property (other than our securities or the
securities of any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinate, at least to the extent provided in the
subordination provisions with respect to the subordinated
securities or the junior subordinated securities, as applicable,
to the payment of all senior debt at the time outstanding, and
to any securities issued under any such plan of reorganization
or adjustment), which would otherwise (but for the subordination
provisions) be payable or deliverable in respect of the
subordinated securities shall be paid or delivered directly to
the holders of senior debt in accordance with the priorities
then existing among such holders until all senior debt
(including any interest accruing after the commencement of any
such proceedings) shall have been paid in full. (Section 1801 of
the subordinated indenture or the junior subordinated indenture,
as applicable).
In the event of any such proceeding, after payment in full
of all sums owing with respect to senior debt, the holders of
subordinated securities or junior subordinated securities, as
applicable, together with the holders of any of our obligations
ranking on an equal basis with the subordinated securities or
junior subordinated securities, as applicable, shall be entitled
to be repaid from our remaining assets the amounts at the time
due and owing on account of unpaid principal, premium, if any,
and interest, if any, on the subordinated securities or junior
subordinated securities, as applicable and such other
obligations before any payment or other distribution, whether in
cash, property or otherwise, shall be made on account of any of
our capital stock or obligations ranking junior to the
subordinated securities or junior subordinated securities, as
applicable, and such other obligations. If any payment or
distribution on account of the principal of or interest on the
subordinated securities or junior subordinated securities, as
applicable, of any character or any security, whether in cash,
securities or other property (other than our securities or the
securities of any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinate, at least to the extent provided in the
subordination provisions with respect to the subordinated
securities or junior subordinated securities, as applicable, to
the payment of all senior debt at the time outstanding and to
any securities issued under any such plan of reorganization or
readjustment) shall be received by any holder of any
subordinated securities or junior subordinated securities, as
applicable in contravention of any of these terms and before all
the senior debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the
benefit of, and shall be paid over or delivered and transferred
to, the holders of the senior debt at the time outstanding in
accordance with the priorities then existing among such holders
for application to the payment of all senior debt remaining
unpaid to the extent necessary to pay all such senior debt in
full. (Section 1801 of the subordinated indenture or junior
subordinated indenture, as applicable) By reason of such
subordination, in the event of our insolvency, holders of senior
debt may receive more, ratably, and holders of the subordinated
securities having a claim pursuant to such securities may
receive less, ratably, than our other creditors. Such
subordination will not prevent the occurrence of any event of
default in respect of the subordinated securities.
The subordinated indenture or junior subordinated
indenture, as applicable, may be modified or amended as provided
under "Modification and Waiver" above, provided that no such
modification or amendment may, without the consent of the
holders of all senior debt outstanding, modify any of the
provisions of the subordinated indenture or junior subordinated
indenture, as applicable, relating to the subordination of the
subordinated securities or the junior subordinated securities
and any related coupons in a manner adverse to such holders.
(Section 902 of the subordinated indenture or junior
subordinated indenture, as applicable)
Conversion of Convertible Debt Securities
The holders of debt securities of a specified series that
are convertible into our common stock or preferred stock will be
entitled at certain times specified in the applicable prospectus
supplement, subject to prior redemption, repayment or
repurchase, to convert any convertible debt securities of such
series (in denominations set forth in the applicable prospectus
supplement) into common stock or preferred stock, as the case
may be, at the conversion price set forth in the applicable
prospectus supplement, subject to adjustment as described below
and in the applicable prospectus supplement. Except as
described below and as may be described in the applicable
prospectus supplement, no adjustment will be made on conversion
of any convertible debt securities for interest accrued thereon
or for dividends on any common stock or preferred stock issued.
(Section 1803 of the senior indenture, Section 1903 of the
subordinated indenture) If any convertible debt securities not
called for redemption are converted between a regular record
date for the payment of interest and the next succeeding
interest payment date, such convertible debt securities must be
accompanied by funds equal to the interest payable on such
succeeding interest payment date on the principal amount so
converted. (Section 1803 of the senior indenture, Section 1903
of the subordinated indenture) We are not required to issue
fractional shares of common stock upon conversion of convertible
debt securities that are convertible into common stock and, in
lieu thereof, will pay a cash adjustment based upon the closing
price (as defined in the indenture) of the common stock on the
last business day prior to the date of conversion. (Section
1804 of the senior indenture, Section 1904 of the subordinated
indenture) In the case of convertible debt securities called
for redemption, conversion rights will expire at the close of
business on the redemption date. (Section 1802 of the senior
indenture, Section 1902 of the subordinated indenture)
Unless otherwise indicated in the applicable prospectus
supplement, the conversion price for convertible debt securities
that are convertible into our common stock is subject to
adjustment under formulas set forth in the applicable indenture
in certain events, including:
- the issuance of our capital stock as a dividend or
distribution on the common stock;
- subdivisions and combinations of the common stock;
- the issuance to all holders of common stock of
certain rights or warrants entitling them to
subscribe for or purchase common stock within
45 days after the date fixed for the determination
of the shareholders entitled to receive such rights
or warrants, at less than the current market price
(as defined in the indenture); and
- the distribution to all holders of common stock of
evidences of our indebtedness or assets (excluding
certain cash dividends and distributions described
in the next paragraph) or rights or warrants
(excluding those referred to above). (Section 1806
of the senior indenture, Section 1906 of the
subordinated indenture)
In the event that we distribute any rights or warrants to
acquire capital stock pursuant to which separate certificates
representing such capital stock rights will be distributed
subsequent to the initial distribution of such capital stock
rights (whether or not such distribution shall have occurred
prior to the date of the issuance of a series of convertible
debt securities), such subsequent distribution shall be deemed
to be the distribution of such capital stock rights. We may, in
lieu of making any adjustment in the conversion price upon a
distribution of separate certificates representing such capital
stock rights, make proper provision so that each holder of such
a convertible debt security who converts it (or any portion of
it) before the record date for such distribution of separate
certificates shall be entitled to receive upon such conversion
shares of common stock issued with capital stock rights. If
converted after such record date and prior to the expiration,
redemption or termination of such capital stock rights, the
holder shall be entitled to receive upon such conversion, in
addition to the shares of common stock issuable upon such
conversion, the same number of such capital stock rights as
would a holder of the number of shares of common stock that such
convertible debt security so converted would have entitled its
holder to acquire in accordance with the terms and provisions
applicable to the capital stock rights if such convertible debt
security were converted immediately prior to the record date for
such distribution. Common stock owned by or held for our
account or any majority owned subsidiary shall not be deemed
outstanding for the purpose of any adjustment.
No adjustment in the conversion price of convertible debt
securities that are convertible into common stock will be made
for regular quarterly or other periodic or recurring cash
dividends or distributions or for cash dividends or
distributions to the extent paid from retained earnings. No
adjustment in the conversion price of convertible debt
securities that are convertible into common stock will be
required unless such adjustment would require a change of at
least 1% in the conversion price then in effect, provided, that
any such adjustment not so made will be carried forward and
taken into account in any subsequent adjustment. Any such
adjustment not so made shall be made no later than three years
after the occurrence of the event requiring such adjustment to
be made or carried forward. We reserve the right to make such
reductions in the conversion price in addition to those required
in the foregoing provisions as we in our discretion shall
determine to be advisable in order that certain stock-related
distributions we make to our shareholders in the future shall
not be taxable. (Section 1806 of the senior indenture, Section
1906 of the subordinated indenture) Except as stated above, the
conversion price will not be adjusted for the issuance of common
stock or any securities convertible into or exchangeable for
common stock or securities carrying the right to purchase any of
the foregoing.
In the case of a reclassification or change of the common
stock, a consolidation or merger involving us, or a sale or
conveyance to another corporation of our property and assets as
an entirety or substantially as an entirety, in each case as a
result of which holders of common stock shall be entitled to
receive stock, securities, other property or assets (including
cash) with respect to or in exchange for such common stock, the
holders of the convertible debt securities then outstanding that
are convertible into common stock will be entitled thereafter to
convert such convertible debt securities into the kind and
amount of shares of stock and other securities or property which
they would have received upon such reclassification, change,
consolidation, merger, sale or conveyance had such convertible
debt securities been converted into common stock immediately
prior to such reclassification, change, consolidation, merger,
sale or conveyance. (Section 1807 of the senior indenture,
Section 1907 of the subordinated indenture)
In the event of a taxable distribution to holders of common
stock (or other transaction) which results in any adjustment of
the conversion price of convertible debt securities that are
convertible into common stock, the holders of such convertible
debt securities may, in certain circumstances, be deemed to have
received a distribution subject to United States income tax as a
dividend; in certain other circumstances, the absence of such an
adjustment may result in a taxable dividend to the holders of
common stock or such convertible debt securities.
Exchange for Capital Securities
To the extent set forth in a prospectus supplement, a
specified series of debt securities may be mandatorily
exchangeable for capital securities as described under
"Description of Capital Securities" below.
Information Concerning the Trustees
The trustee serves as trustee under indentures for certain
of our other debt.
The trustee may, from time to time make loans to us and
perform other services for us in the normal course of business.
Under the provisions of the Trust Indenture Act of 1939, upon
the occurrence of a default under an indenture, if a trustee has
a conflicting interest (as defined in the Trust Indenture Act)
the trustee must, within 90 days, either eliminate such
conflicting interest or resign. Under the provisions of the
Trust Indenture Act, an indenture trustee shall be deemed to
have a conflicting interest if the trustee is a creditor of the
obligor. If the trustee fails either to eliminate the
conflicting interest or to resign within 10 days after the
expiration of such 90-day period, the trustee is required to
notify debt holders to this effect and any debt holder who has
been a bona fide holder for at least six months may petition a
court to remove the trustee and to appoint a successor trustee.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of common stock,
preferred stock and debt securities. Warrants may be issued
separately or together with common stock, preferred stock or
debt securities offered by any prospectus supplement and may be
attached to or separate from such common stock, preferred stock
or debt securities. Each series of warrants will be issued
under a separate warrant agreement to be entered into between us
and a bank or trust corporation, as warrant agent, all as set
forth in the prospectus supplement relating to the particular
issue of offered warrants. The warrant agent will act solely as
our agent in connection with the warrants and will not assume
any obligation or relationship of agency or trust for or with
any holders of warrants or beneficial owners of warrants.
Copies of the forms of warrant agreements, including the forms
of warrant certificates representing the warrants, are or will
be filed as exhibits to the registration statement of which this
prospectus forms a part. The following summaries of certain
provisions of the forms of warrant agreements and warrant
certificates do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all the
provisions of the warrant agreements and the warrant
certificates.
General
If warrants are offered, the applicable prospectus
supplement will describe the terms of such warrants, including,
in the case of warrants for the purchase of debt securities, the
following where applicable:
- the title of the warrants;
- the offering price for the warrants, if any;
- the aggregate number of the warrants;
- the designation and terms of the debt securities
purchasable upon exercise of the warrants;
- if applicable, the designation and terms of the
securities with which the warrants are issued and
the number of warrants issued with each of these
securities;
- if applicable, the date after which the warrants
and any securities issued with the warrants will be
separately transferable;
- the principal amount of debt securities purchasable
upon exercise of a warrant and the purchase price;
- the dates on which the right to exercise the
warrants begins and expires;
- if applicable, the minimum or maximum amount of the
warrants that may be exercised at any one time;
- whether the warrants represented by the warrant
certificate or debt securities that may be issued
upon exercise of the warrants will be issued in
registered or bearer form;
- information with respect to any book-entry
procedures;
- the currency, currencies or currency units in which
the offering price, if any, and the exercise price
are payable;
- if applicable, a discussion of certain United
States federal income tax considerations;
- any antidilution provisions of the warrants;
- any redemption or call provisions applicable to the
warrants; and
- any additional terms of the warrants, including
terms, procedures and limitations relating to the
exchange and exercise of the warrants.
In the case of warrants for the purchase of common stock or
preferred stock, the applicable prospectus supplement will
describe the terms of such warrants, including the following
where applicable:
- the title of the warrants;
- the offering price of the warrants, if any;
- the aggregate number of the warrants;
- the designation and terms of the common stock
or preferred stock that is purchasable upon
exercise of the warrants;
- if applicable, the designation and terms of the
securities with which the warrants are issued and
the number of such warrants issued with each such
security;
- if applicable, the date after which the warrants
and any securities issued with the warrants will be
separately transferable;
- the number of shares of common stock or preferred
stock purchasable upon exercise of a warrant and
the purchase price;
- the dates on which the right to exercise the
warrants begins and expires;
- if applicable, the minimum or maximum amount of
the warrants which may be exercised at any one
time;
- the currency, currencies or currency units in which
the offering price, if any, and the exercise price
are payable;
- if applicable, a discussion of certain United
States federal income tax considerations;
- any antidilution provisions of the warrants;
- any redemption or call provisions applicable to
the warrants; and
- any additional terms of the warrants, including
terms, procedures and limitations relating to the
exchange and exercise of the warrants.
Warrant certificates may be exchanged for new warrant
certificates of different denominations, may be presented for
registration of transfer, and may be exercised at the corporate
trust office of the warrant agent or any other office indicated
in the applicable prospectus supplement. Prior to the exercise
of any warrant to purchase debt securities, holders of such
warrants will not have any of the rights of holders of the debt
securities purchasable upon such exercise, including the right
to receive payments of principal of, premium, if any, or
interest, if any, on the debt securities purchasable upon such
exercise or to enforce covenants in the applicable indenture.
Prior to the exercise of any warrants to purchase preferred
stock or common stock, holders of such warrants will not have
any rights of holders of the preferred stock or common stock
purchasable upon such exercise, including the right to receive
payments of dividends, if any, on the preferred stock or common
stock purchasable upon such exercise or to exercise any
applicable right to vote.
Exercise of Warrants
Each warrant will entitle the holder thereof to purchase
such principal amount of debt securities or shares of common
stock or preferred stock, as the case may be, at such exercise
price as shall in each case be set forth in, or calculable from
the prospectus supplement relating to the offered warrants.
After the close of business on the expiration date of the
warrants (or such later date to which such expiration date may
be extended by us), unexercised warrants will become void.
Warrants may be exercised by delivering to the warrant
agent payment as provided in the applicable prospectus
supplement of the amount required to purchase the debt
securities, preferred stock or common stock, as the case may be,
purchasable upon such exercise together with certain information
set forth on the reverse side of the warrant certificate.
Warrants will be deemed to have been exercised upon receipt of
payment of the exercise price, subject to the receipt, within
five business days, of the warrant certificate evidencing such
warrants. Upon receipt of such payment and the warrant
certificate properly completed and duly executed at the
corporate trust office of the warrant agent or any other office
indicated in the applicable prospectus supplement, we will, as
soon as practicable, issue and deliver the debt securities,
preferred stock or common stock, as the case may be, purchasable
upon such exercise. If fewer than all of the warrants
represented by the warrant certificate are exercised, a new
warrant certificate will be issued for the remaining amount of
warrants.
Amendments and Supplements to Warrant Agreements
The warrant agreements may be amended or supplemented
without the consent of the holders of the warrants issued
thereunder to effect changes that are not inconsistent with the
provisions of the warrants and that do not adversely affect the
interests of the holders of the warrants.
Common Stock Warrant Adjustments
Unless otherwise indicated in the applicable prospectus
supplement, the exercise price of, and the number of shares of
common stock covered by, a common stock warrant are subject to
adjustment in certain events, including:
- the issuance of common stock as a dividend or
distribution on the common stock;
- subdivisions and combinations of the common stock;
- the issuance to all holders of common stock of
capital stock rights entitling them to subscribe
for or purchase common stock within 45 days after
the date fixed for the determination of the
shareholders entitled to receive such capital
stock rights, at less than the current market
price; and
- the distribution to all holders of common stock of
our evidences of our indebtedness or assets
(excluding certain cash dividends and
distributions described below) or rights or
warrants (excluding those referred to above).
We may, in lieu of making any adjustment in the exercise
price of, and the number of shares of common stock covered by, a
common stock warrant, make proper provision so that each holder
of such common stock warrant who exercises such common stock
warrant (or any portion thereof):
- before the record date for such distribution of
separate certificates, shall be entitled to receive
upon such exercise shares of common stock issued
with capital stock rights; and
- after such record date and prior to the expiration,
redemption or termination of such capital stock
rights, shall be entitled to receive upon such
exercise in addition to the shares of common stock
issuable upon such exercise, the same number of
such capital stock rights as would a holder of the
number of shares of common stock that such common
stock warrants so exercised would have entitled the
holder thereof to acquire in accordance with the
terms and provisions applicable to the capital
stock rights if such common stock warrant was
exercised immediately prior to the record date for
such distribution.
Common stock owned by or held for our account or any of our
majority owned subsidiaries shall not be deemed outstanding for
the purpose of any adjustment.
No adjustment in the exercise price of, and the number of
shares of common stock covered by, a common stock warrant will
be made for regular quarterly or other periodic or recurring
cash dividends or distributions of cash dividends or
distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require
a change of at least 1% in the exercise price then in effect;
provided that any such adjustment not so made will be carried
forward and taken into account in any subsequent adjustment; and
provided further that any such adjustment not so made shall be
made no later than three years after the occurrence of the event
requiring such adjustment to be made or carried forward. Except
as stated above, the exercise price of, and the number of shares
of common stock covered by, a common stock warrant will not be
adjusted for the issuance of common stock or any securities
convertible into or exchangeable for common stock, or securities
carrying the right to purchase any of the foregoing.
In the case of a reclassification or change of the common
stock, a consolidation or merger involving us or sale or
conveyance to another corporation of our property and assets as
an entirety or substantially as an entirety, in each case as a
result of which holders of our common stock shall be entitled to
receive stock, securities, other property or assets (including
cash) with respect to or in exchange for such common stock, the
holders of the common stock warrants then outstanding will be
entitled thereafter to convert such common stock warrants into
the kind and amount of shares of stock and other securities or
property which they would have received upon such
reclassification, change, consolidation, merger, sale or
conveyance had such common stock warrants been exercised
immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts
obligating holders to purchase from us, and us to sell to the
holders, a specified number of shares of common stock at a
future date or dates. The consideration per share of common
stock may be fixed at the time the stock purchase contracts are
issued or may be determined by reference to a specific formula
described in the stock purchase contracts. We may issue the
stock purchase contracts separately or as a part of stock
purchase units consisting of a stock purchase contract and one
or more shares of our common stock, preferred stock or fractions
thereof or a debt security or our debt obligation, the debt
obligation of a third party, including a U.S. Treasury security.
Our common stock, preferred stock or debt securities or the debt
obligation of a third party may serve as collateral to secure
the holders' obligations to purchase the shares of common stock
under the stock purchase contracts. The stock purchase
contracts may require us to make periodic payments to the
holders of stock purchase contracts. These payments may be
unsecured or prefunded on some basis. The stock purchase
contracts may require holders to secure their obligations in a
specified manner. The applicable prospectus supplement will
describe the specific terms of any stock purchase contracts or
stock purchase units.
DESCRIPTION OF CAPITAL SECURITIES
Our authorized capital consists of 400,000,000 shares of
Common Stock, no par value, and 7,500,000 shares of authorized
preferred stock. As of June 30, 2001, there were 257.1 million
shares of our Common Stock issued and outstanding and no shares
of preferred stock issued and outstanding. There are no other
shares of capital stock authorized, issued or outstanding. We
have no options, warrants, or other rights authorized, issued or
outstanding, other than as described below under "Units" and
"Shareholder Rights Plan," and options granted under our stock
option plans.
Common Stock
The holders of our Common Stock share ratably in dividends
when and if declared by our board of directors from legally
available funds. Our declaration and payment of cash dividends
depends upon dividend payments by Sovereign Bank, which are our
primary source of revenue and cash flow. We are a legal entity
separate and distinct from our subsidiaries. Accordingly, our
right, and consequently the right of our creditors and
shareholders, to participate in any distribution of the assets
or earnings of any subsidiary is necessarily subject to the
prior claims of creditors of the subsidiary, except to the
extent that our claims in our capacity as a creditor may be
recognized.
Prior to the issuance of any of our preferred stock that
possesses voting rights (see "Preferred Stock" below), the
holders of shares of Common Stock will possess exclusive voting
rights on matters upon which shareholders have the right to
vote. Each holder of shares of our Common Stock has one vote
for each share held on matters upon which shareholders have the
right to vote. Our shareholders cannot cumulate votes in the
election of directors.
The holders of our Common Stock have no preemptive rights
to acquire any additional shares of our Common Stock. In
addition, our Common Stock is not subject to redemption.
Our articles of incorporation authorize our board of
directors to issue authorized shares of our Common Stock without
shareholder approval. Our Common Stock is listed on the New
York Stock Exchange under the symbol "SOV."
In the event of our liquidation, dissolution or winding-up,
whether voluntary or involuntary, holders of our Common Stock
share ratably in any of our assets or funds that are available
for distribution to shareholders after the satisfaction of our
liabilities (or after adequate provision is made therefor) and
after payment of any liquidation preferences of any outstanding
of our preferred stock.
Preferred Stock
Our board of directors is authorized to approve the
issuance of our preferred stock, without any required approval
of shareholders. Our board determines the rights,
qualifications, restrictions, and limitations on each series of
our preferred stock at the time of issuance. These rights may
include rights to participating dividends, voting and
convertibility into shares of our Common Stock. Shares of our
preferred stock may have dividend, redemption, voting, and
liquidation rights taking priority over our Common Stock, and
may be convertible into our Common Stock.
Units
On November 15, 1999, Sovereign Capital Trust II, a special
purpose statutory trust, issued 5,750,000 units of trust
preferred securities. Each unit consists of:
- a preferred security having a stated liquidation amount
of $50, representing an undivided beneficial ownership
interest in the assets of the trust, which assets
consist solely of debentures issued by us; and
- a warrant to purchase, at any time prior November 20,
2029 (subject to redemption), 5.3355 shares (subject
to antidilution adjustments) of our Common Stock.
The exercise price of the warrants is equal to the
accreted value of the preferred securities (subject
to antidilution adjustments). The accreted value
of a preferred security is equal to the sum of
the initial purchase price of the preferred security
component of each unit (i.e. $32.50) plus accrual of
the discount (i.e. $17.50), calculated from November 15,
1999 to the date of exercise of the warrant at the
all-in-yield of 11.74% per annum on a quarterly bond
equivalent yield basis using a 360-day year of twelve
30-day months until such sum equals $50 on November 15,
2029.
Shareholder Rights Plan
We maintain a shareholder rights plan designed to protect
shareholders from attempts to acquire control of us at an
inadequate price. Under the shareholder rights plan, each
outstanding share of our Common Stock has attached to it one
right to purchase one-hundredth of a share of junior
participating preferred stock at an initial exercise price of
$40. The rights are not currently exercisable or transferable,
and no separate certificates evidencing such rights will be
distributed, unless certain events occur.
A holder can exercise the rights to purchase shares of the
junior participating preferred stock if a person, group, or
other entity acquires or commences a tender offer or an exchange
offer for 9.9% or more of total voting power. A holder can also
exercise if our board of directors declares a person or group
who has become a beneficial owner of at least 4.9% of our Common
Stock or total voting power an "adverse person," as defined in
the rights plan, as amended.
After the rights become exercisable, the rights (other than
rights held by a 9.9% beneficial owner or an "adverse person")
generally will entitle the holders to purchase either our Common
Stock or the common stock of the potential acquiror, in lieu of
the junior participating preferred stock, at a substantially
reduced price.
The rights can be redeemed at $.001 per right at any time
by majority vote of our "continuing directors," as defined in
the rights plan, as amended, and such other vote as required by
law or our bylaws until the tenth business day following public
announcement that a 9.9% position has been acquired. At any
time prior to the date the rights become nonredeemable, our
"continuing directors" can extend the redemption period. Rights
are not redeemable following an "adverse person" determination.
Special Charter and Pennsylvania Corporate Law Provisions
Our articles of incorporation and bylaws contain certain
provisions which may have the effect of deterring or
discouraging, among other things, a nonnegotiated tender or
exchange offer for our stock, a proxy contest for control of us,
the assumption of control of us by a holder of a large block of
our stock and the removal of our management. These provisions:
- empower our board of directors, without shareholder
approval, to issue our preferred stock, the terms of
which, including voting power, are set by our board of
directors;
- divide our board of directors into three classes serving
staggered three-year terms;
- restrict the ability of shareholders to remove
directors;
- require that shares with at least 80% of total voting
power approve mergers and other similar transactions
with a person or entity holding stock with more than 5%
of our voting power, if the transaction is not approved,
in advance, by our board of directors;
- prohibit shareholders' actions without a meeting;
- require that shares with at least 80%, or in certain
instances a majority, of total voting power approve the
repeal or amendment of our articles of incorporation;
- require any person who acquires our stock with voting
power of 25% or more to offer to purchase for cash all
remaining shares of our voting stock at the highest
price paid by such person for shares of our voting stock
during the preceding year;
- eliminate cumulative voting in elections of directors;
- require an affirmative vote of at least two-thirds of
out total voting power in order for shareholders to
repeal or amend our bylaws;
- require advance notice of nominations for the election
of directors and the presentation of shareholder
proposals at meetings of shareholders; and
- provide that officers, directors, employees, agents and
person who own 5% or more of the voting securities of
any other corporation or other entity that owns 66-2/3%
or more of our outstanding voting stock cannot
constitute a majority of the members of our board of
directors.
The Pennsylvania Business Corporation Law of 1988 also
contains certain provisions applicable to us which may have the
effect of impeding a change in control. These provisions, among
other things:
- require that, following any acquisition of 20% of a
public corporation's voting power, the remaining
shareholders have the right to receive payment for their
shares, in cash, from the acquiring person or group in
an amount equal to the "fair value" of the shares,
including an increment representing a proportion of any
value payable for control of the corporation; and
- prohibit for five years, subject to certain exceptions,
a "business combination," which includes a merger or
consolidation of the corporation or a sale, lease or
exchange of assets, with a shareholder or group of
shareholders beneficially owning 20% or more of a public
corporation's voting power.
In 1990, Pennsylvania adopted legislation further amending
the Pennsylvania Business Corporation Law of 1988. To the
extent applicable to us at the present time, this legislation
generally:
- expands the factors and groups (including shareholders)
which our board of directors can consider in determining
whether a certain action is in the best interests of the
corporation;
- provides that our board of directors need not consider
the interests of any particular group as dominant or
controlling;
- provides that our directors, in order to satisfy the
presumption that they have acted in the best interests
of the corporation, need not satisfy any greater
obligation or higher burden of proof for actions
relating to an acquisition or potential acquisition of
control;
- provides that actions relating to acquisitions of
control that are approved by a majority of
"disinterested directors" are presumed to satisfy the
directors' standard, unless it is proven by clear and
convincing evidence that the directors did not assent to
such action in good faith after reasonable
investigation; and
- provides that the fiduciary duty of our directors is
solely to the corporation and may be enforced by the
corporation or by a shareholder in a derivative action,
but not by a shareholder directly.
The 1990 amendments to the Pennsylvania Business
Corporation Law of 1988 explicitly provide that the fiduciary
duty of directors does not require directors to:
- redeem any rights under, or to modify or render
inapplicable, any shareholder rights plan;
- render inapplicable, or make determinations under,
provisions of the Pennsylvania Business Corporation Law
of 1988, relating to control transactions, business
combinations, control share acquisitions or disgorgement
by certain controlling shareholders following attempts
to acquire control; or
- act as the board of directors, a committee of the board
or an individual director solely because of the effect
such action might have on an acquisition or potential or
proposed acquisition of control of the corporation or
the consideration that might be offered or paid to
shareholders in such an acquisition.
One of the effects of the 1990 fiduciary duty statutory
provisions may be to make it more difficult for a shareholder to
successfully challenge the actions of our board of directors in
a potential change in control context. Pennsylvania case law
appears to provide that the fiduciary duty standard under the
1990 amendments to the Pennsylvania Business Corporation Law of
1988 grants directors the statutory authority to reject or
refuse to consider any potential or proposed acquisition of the
corporation.
We opted out of coverage by the "disgorgement" and
"control-share acquisition" statutes included in the 1990
legislation, pursuant to a bylaw amendment as permitted by the
legislation. To the extent applicable to a Pennsylvania
corporation, the "disgorgement" statute generally requires
disgorgement by any person or group who or which has acquired or
publicly disclosed an intent to acquire 20% or more of a
corporation's voting power of any profit realized from the sale
of any shares acquired within specified time periods of such
acquisition or disclosure if the shares are sold within eighteen
months thereafter. The "control share acquisition" statute
generally prohibits a person or group who or which exceeds
certain stock ownership thresholds (20%, 33-1/3% and 50%) for
the first time from voting the "control shares" (i.e., the
shares owned in excess of the applicable threshold) unless
voting rights are restored by a vote of disinterested
shareholders. As a result of our output from coverage for these
statutes, neither the "disgorgement" nor the "control share
acquisition" statute would apply to a nonnegotiated attempt to
acquire control of us, although such an attempt would still be
subject to the special charter and other provisions described in
the preceding paragraphs. We can reverse this action, and
thereby cause the "disgorgement" and "control share acquisition"
statutes to apply to an attempt to acquire control of us, by
means of an amendment to our bylaws, which could be adopted by
our board of directors, without shareholder approval.
DESCRIPTION OF TRUST PREFERRED SECURITIES AND TRUST GUARANTEES
Trust Preferred Securities
The declaration of trust pursuant to which each Trust is
organized will be replaced by an amended and restated
declaration of trust, which will authorize the trustees of such
trust to issue on behalf of such Trust one series of trust
preferred securities and one series of trust common securities.
The trust preferred securities will be issued to the public
pursuant to the Registration Statement of which this prospectus
forms a part, and the trust common securities will be issued
directly or indirectly to us.
The trust preferred securities will have such terms,
including dividends, redemption, voting, conversion, liquidation
rights and such other preferred, deferred or other special
rights or such restrictions as shall be set forth in the
applicable declaration of trust or made part of such declaration
of trust by the Trust Indenture Act. Reference is made to the
applicable prospectus supplement relating to the trust preferred
securities of such Trust for specific terms, including:
- the distinctive designation of trust preferred
securities;
- the number of trust preferred securities issued by
such Trust;
- the annual distribution rate (or method of
determining such rate) for trust preferred
securities issued by such Trust and the date or
dates upon which such distributions shall be
payable;
- whether distributions on trust preferred securities
issued by such Trust shall be cumulative, and, in
the case of trust preferred securities having such
cumulative distribution rights, the date or dates
or method of determining the date or dates from
which distributions on trust preferred securities
issued by such Trust shall be cumulative;
- the amount or amounts which shall be paid out of
the assets of such Trust to the holder of trust
preferred securities of such Trust upon voluntary
or involuntary dissolution, winding-up or
termination of such Trust;
- the terms and conditions, if any, under which trust
preferred securities of such Trust may be converted
into shares of our capital stock, including the
conversion price per share and the circumstances,
if any, under which any such conversion right shall
expire;
- the terms and conditions, if any, upon which the
related series of the applicable debt securities
may be distributed to holders of trust preferred
securities of such Trust;
- the obligation, if any, of such Trust to purchase
or redeem trust preferred securities issued by such
Trust and the price or prices at which, the period
or periods within which, and the terms and
conditions upon which trust preferred securities
issued by such Trust shall be purchased or
redeemed, in whole or in part, pursuant to such
obligation;
- the voting rights, if any, of trust preferred
securities issued by such Trust in addition to
those required by law, including the number of
votes per trust preferred security and any
requirement for the approval by the holders of
trust preferred securities, or of trust preferred
securities issued by such Trust, as a condition to
specified action or amendments to the applicable
declaration of trust; and
- any other relevant rights, preferences, privileges,
limitations or restrictions of trust preferred
securities issued by such Trust consistent with the
applicable declaration of trust or with applicable
law.
Pursuant to each declaration of trust, the property trustee
will own the debt securities purchased by the applicable Trust
for the benefit of the holders of the trust preferred
securities. The payment of distributions out of money held by
the Trust, and payments upon redemption of trust preferred
securities or liquidation of any Trust, will be guaranteed by us
to the extent described under "-- Trust Guarantees."
Certain federal income tax considerations applicable to an
investment in trust preferred securities will be described in
the prospectus supplement relating thereto.
In connection with the issuance of trust preferred
securities, each Trust will also issue one series of trust
common securities. Each amended declaration of trust will
authorize the administrative trustee of a Trust to issue on
behalf of such Trust one series of trust common securities
having such terms, including distribution, conversion,
redemption, voting, and liquidation rights or such restrictions
as shall be set forth therein. Except as otherwise provided in
the prospectus supplement relating to the trust preferred
securities, the terms of the trust common securities issued by
such Trust will be substantially identical to the terms of the
trust preferred securities issued by such Trust, and the trust
common securities will rank on a parity, and payments will be
made thereon pro rata, with the trust preferred securities
except that, upon an event of default under the applicable
declaration of trust, the rights of the holders of the trust
common securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the trust preferred
securities. Except in certain limited circumstances, the trust
common securities will also carry the right to vote and appoint,
remove or replace any of the trustees of the related Trust which
issued such trust common securities. All of the trust common
securities of each Trust will be directly or indirectly owned by
us.
The property trustee and its affiliates may provide
customary commercial banking services to us and certain of our
subsidiaries and may participate in our various financing
agreements in the ordinary course of its business.
Trust Guarantees
Set forth below is a summary of information concerning the
trust guarantees which we will execute and deliver, from time to
time, for the benefit of the holders of trust preferred
securities. The accompanying prospectus supplement will
describe any significant differences between the actual terms of
the trust guarantees and the summary below. The following
summary does not purport to be complete and is subject in all
respects to the provisions of, and is qualified in its entirety
by reference to, the trust guarantee, which will be filed with
the SEC and incorporated by reference as an exhibit to the
registration statement of which this prospectus forms a part.
General. We will irrevocably and unconditionally agree, to
the extent set forth in the trust guarantees, to pay in full, to
the holders of trust preferred securities of each series, the
trust guarantee payments (as defined below) (except to the
extent paid by such Trust), as and when due, regardless of any
defense, right of set-off, or counterclaim which such Trust may
have or assert. The following trust guarantee payments with
respect to any series of trust preferred securities (to the
extent not paid by the applicable Trust) will be subject to the
trust guarantees (without duplication):
- any accrued and unpaid dividends which are required
to be paid on the trust preferred securities of
such series, to the extent such Trust shall have
funds legally available therefor;
- the redemption price, including all accrued and
unpaid distributions, payable out of funds legally
available therefor, with respect to any trust
preferred securities called for redemption by such
Trust; and
- upon a liquidation of such Trust (other than in
connection with the distribution of debt securities
to the holders of trust preferred securities or the
redemption of all of the trust preferred securities
issued by such Trust), the lesser of:
- the aggregate of the liquidation preference and
all accrued and unpaid distributions on the
trust preferred securities of such series to the
date of payment; and
- the amount of assets of such Trust remaining
available for distribution to holders of trust
preferred securities of such series in
liquidation of such Trust.
Our obligation to make a trust guarantee payment may be
satisfied by our direct payment of the required amounts to the
holders of trust preferred securities or by causing the
applicable Trust to pay such amounts to such holders.
Our Covenants. In each trust guarantee, except as may be
provided in an applicable prospectus supplement, we will
covenant that, so long as any trust preferred securities issued
by the applicable Trust remain outstanding, if there shall have
occurred any event that would constitute an event of default
under such trust guarantee or the applicable declaration of
trust, then:
- We will not declare or pay any dividend on, make
any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect
to, any of our common stock other than:
- purchases or acquisitions of shares of common
stock in connection with our satisfaction of
obligations under any employee benefit plan;
- as a result of a reclassification of our common
stock or the exchange or conversion of one class
or series of our common stock for another class
or series of our common stock;
- the purchase of fractional interests in shares
of our common stock pursuant to the conversion
or exchange provisions of such common stock or
the security being converted or exchanged; or
- purchases or acquisitions of shares of common
stock to be used in connection with acquisitions
of common stock by shareholders pursuant to our
dividend reinvestment plan, or make any
guarantee payments with respect to the
foregoing; and
- We will not make any payment of principal or
premium, if any, on or repurchase any debt
securities (including guarantees), issued by us
which rank on a parity with or junior to such debt
securities, other than at stated maturity.
Amendment and Assignment. Except with respect to any
changes which do not adversely affect the rights of holders of
trust preferred securities of any series (in which case no vote
will be required), each trust guarantee with respect to any
series of trust preferred securities may be changed only with
the prior approval of the holders of not less than a majority in
liquidation preference of the outstanding trust preferred
securities of such series. The manner of obtaining any such
approval of holders of the trust preferred securities of each
series will be set forth in an accompanying prospectus
supplement. All guarantees and agreements contained in each
trust guarantee shall bind our successors, assigns, receivers,
trustees and representatives and shall inure to the benefit of
the holders of the applicable series of trust preferred
securities then outstanding.
Termination of the Trust Guarantees. Each trust guarantee
will terminate as to the trust preferred securities issued by
the applicable Trust:
- upon full payment of the redemption price of all
trust preferred securities of such Trust;
- upon distribution of the applicable debt securities
held by such Trust to the holders of the trust
preferred securities of such Trust; or
- upon full payment of the amounts payable in
accordance with the declaration of trust upon
liquidation of such Trust. Each trust guarantee
will continue to be effective or will be
reinstated, as the case may be, if at any time any
holder of trust preferred securities issued by the
applicable Trust must return payment of any sums
paid under such trust preferred securities or such
trust guarantee.
The subordination provisions of the applicable debt
securities and the trust guarantees, respectively, may provide
that in the event payment is made on debt securities or the
trust guarantees in contravention of such provisions, such
payments will be paid over to the holders of senior debt.
Ranking of the Trust Guarantees. Unless otherwise
specified in a prospectus supplement, each trust guarantee will
constitute our unsecured obligation and will rank:
- subordinate and junior in right of payment to all
of our other liabilities;
- on a parity with the most senior preferred or
preference stock, if any, we issue hereafter and
with any guarantee we enter into hereafter in
respect of any preferred or preference stock or
interests of any of our affiliates; and
- senior to our common stock.
Each declaration of trust will provide that each holder of
trust preferred securities by acceptance thereof agrees to the
subordination provisions and other terms of the applicable trust
guarantee.
Each trust guarantee will constitute a guarantee of payment
and not of collection. The trust guarantees will be deposited
with the property trustee to be held for the benefit of any
series of trust preferred securities. The property trustee will
have the right to enforce the trust guarantees on behalf of the
holders of any series of trust preferred securities. The
holders of not less than 10% in aggregate liquidation preference
of a series of trust preferred securities will have the right to
direct the time, method and place of conducting any proceeding
for any remedy available in respect of the trust guarantee
applicable to such series of trust preferred securities,
including the giving of directions to the property trustee. If
the property trustee fails to enforce a trust guarantee as above
provided, any holder of trust preferred securities of a series
to which such trust guarantee pertains may institute a legal
proceeding directly against us to enforce its rights under such
trust guarantee, without first instituting a legal proceeding
against the applicable Trust, or any other person or entity.
Each trust guarantee will not be discharged except by payment of
the trust guarantee payments in full to the extent not paid by
the applicable Trust, and by complete performance of all
obligations under such trust guarantee.
Governing Law. Each trust guarantee will be governed by
and construed in accordance with the laws of the State of New
York.
CERTAIN TAX CONSIDERATIONS
The applicable prospectus supplement with respect to each
type of security issued under this registration statement may
contain a discussion of certain tax consequences of an
investment in the securities offered thereby.
PLAN OF DISTRIBUTION
We may offer the offered securities in one or more of the
following ways from time to time:
- to or through underwriters or dealers;
- by ourselves directly;
- through agents; or
- through a combination of any of these methods of
sale.
The prospectus supplement relating to an offering of
offered securities will set forth the terms of such offering,
including:
- the name or names of any underwriters, dealers or
agents;
- the purchase price of the offered securities and the
proceeds we will receive from such sale;
- any underwriting discounts and commissions or agency
fees and other items constituting underwriters' or
agents' compensation;
- the initial public offering price;
- any discounts or concessions to be allowed or
reallowed or paid to dealers; and
- any securities exchanges on which such offered
securities may be listed.
Any initial public offering prices, discounts or
concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If underwriters are used in an offering of the offered
securities, such offered securities will be acquired by the
underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying
prices determined at the time of sale. The securities may be
either offered to the public through underwriting syndicates
represented by one or more managing underwriters or by one or
more underwriters without a syndicate. Unless otherwise set
forth in the prospectus supplement, the underwriters will not be
obligated to purchase offered securities unless specified
conditions are satisfied, and if the underwriters do purchase
any offered securities, they will purchase all offered
securities.
In connection with underwritten offerings of the offered
securities and in accordance with applicable law and industry
practice, underwriters may over-allot or effect transactions
that stabilize, maintain or otherwise affect the market price of
the offered securities at levels above those that might
otherwise prevail in the open market, including by entering
stabilizing bids, effecting syndicate covering transactions or
imposing penalty bids, each of which is described below.
- A stabilizing bid means the placing of any bid, or
the effecting of any purchase, for the purpose of
pegging, fixing or maintaining the price of a
security.
- A syndicate covering transaction means the placing
of any bid on behalf of the underwriting syndicate
or the effecting of any purchase to reduce a short
position created in connection with the offering.
- A penalty bid means an arrangement that permits the
managing underwriter to reclaim a selling concession
from a syndicate member in connection with the
offering when offered securities originally sold by
the syndicate member are purchased in syndicate
covering transactions.
These transactions may be effected through the New York
Stock Exchange, in the over-the-counter market, or otherwise.
Underwriters are not required to engage in any of these
activities, or to continue such activities if commenced.
If dealers are utilized in the sale of offered securities,
we will sell such offered securities to the dealers as
principals. The dealers may then resell such offered securities
to the public at varying prices to be determined by such dealers
at the time of resale. The names of the dealers and the terms
of the transaction will be set forth in the prospectus
supplement relating to that transaction.
We may sell offered securities directly to one or more
institutional purchasers, or through agents we designate from
time to time, at a fixed price or prices, which may be changed,
or at varying prices determined at the time of sale. Any agent
involved in the offer or sale of the offered securities in
respect of which this prospectus is delivered will be named, and
any commissions payable by us to such agent will be set forth in
the prospectus supplement relating to that offering. Unless
otherwise indicated in such prospectus supplement, any such
agent will be acting on a best efforts basis for the period of
its appointment.
If so indicated in the applicable prospectus supplement, we
will authorize agents, underwriters or dealers to solicit offers
from certain types of institutions to purchase offered
securities from us at the public offering price set forth in
such prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date
in the future. Such contracts will be subject only to those
conditions set forth in the prospectus supplement and the
prospectus supplement will set forth the commission payable for
solicitation of such contracts.
In addition, shares of common stock may be issued upon
conversion of or in exchange for debt securities, preferred
stock or depositary shares.
Underwriters, dealers and agents may be entitled, under
agreements with us, to indemnification by us relating to
material misstatements and omissions. Underwriters, dealers and
agents may be customers of, engage in transactions with, or
perform services for, us and our affiliates in the ordinary
course of business.
Each series of offered securities will be a new issue of
securities and will have no established trading market. Any
underwriters to whom offered securities are sold for public
offering and sale may make a market in such offered securities,
but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The
offered securities may or may not be listed on a national
securities exchange. No assurance can be given that there will
be a market for the offered securities.
ERISA CONSIDERATIONS
Our subsidiary, Manchester Trust Bank, provides services to
several employee benefit plans. Although the majority of these
plans are employee-directed 401(k) plans, we and any of our
direct or indirect subsidiaries may be considered a "party in
interest" within the meaning of the Employee Retirement Income
Security Act of 1974, and a "disqualified person" under
corresponding provisions of the Internal Revenue Code of 1986,
relating to some of these employee benefit plans. "Prohibited
transactions" within the meaning of ERISA and the Code may
result if any offered securities are acquired by an employee
benefit plan to which we or any of our direct or indirect
subsidiaries is a party in interest, unless such offered
securities are acquired pursuant to an applicable exemption
issued by the U.S. Department of Labor. Any employee benefit
plan or other entity to which such provisions of ERISA or the
Code apply proposing to acquire the offered securities should
consult with its legal counsel.
LEGAL MATTERS
Stevens & Lee, P.C., Philadelphia, Pennsylvania, will act
as our legal counsel and will pass upon the validity of any
securities offered by this prospectus and any applicable
prospectus supplement. Stevens & Lee and its attorneys own an
aggregate of approximately 278,000 shares of our common stock
and 5,200 PIERS Units. Counsel identified in the applicable
prospectus supplement will act as legal counsel to the
underwriters.
EXPERTS
Our consolidated financial statements at December 31, 2000
and 1999 and for each of the three years in the period ended
December 31, 2000, included in our Annual Report on Form 10-K
for the year ended December 31, 2000, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by
reference. The consolidated financial statements referred to
above are incorporated by reference in this prospectus in
reliance upon the report given on the authority of Ernst & Young
LLP as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee $ 236,280
NYSE Fees 100,000*
Printing fees 100,000*
Trustees' fees and expenses 50,000*
Accountant's fees and expenses 250,000*
Rating agencies' fees 500,000*
Attorneys' fees and expenses 250,000*
Transfer agent fees 25,000*
Miscellaneous fees and expenses $ 488,720*
Total $2,000,000
____________
* Estimated except for the registration fee.
Item 15. Indemnification of Directors and Officers.
Pennsylvania law provides that a Pennsylvania corporation
may indemnify directors, officers, employees, and agents of the
corporation against liabilities they may incur in such
capacities for any action taken or any failure to act, whether
or not the corporation would have the power to indemnify the
person under any provision of law, unless such action or failure
to act is determined by a court to have constituted recklessness
or willful misconduct. Pennsylvania law also permits the
adoption of a bylaw amendment, approved by shareholders,
providing for the elimination of a director's liability for
monetary damages for any action taken or any failure to take any
action unless (1) the director has breached or failed to perform
the duties of his office and (2) the breach or failure to
perform constitutes self-dealing, willful misconduct or
recklessness.
The Bylaws of Sovereign Bancorp provide for
(1) indemnification of directors, officers, employees, and
agents of Sovereign Bancorp and its subsidiaries and (2) the
elimination of a director's liability for monetary damages to
the fullest extent permitted by Pennsylvania law.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by Sovereign Bancorp.
The Declaration of each Trust provides that Sovereign
Bancorp shall indemnify the property trustee or any of its
affiliates, the Delaware trustee or any of its affiliates, or
any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of
the property trustee and the Delaware trustee (each, a
"Fiduciary Indemnified Person") for, and hold each Fiduciary
Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim
or liability in connection with the exercise or performance of
any of its powers or duties under such Declaration.
The Declaration of each Trust also provides that Sovereign
Bancorp will indemnify, to the full extent permitted by law, any
administrative trustee, affiliate of any administrative trustee
or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any administrative
trustee or any affiliate thereof; or any officer, employee or
agent of such Trust or its affiliates (each, a "Debenture Issuer
Indemnified Person") who was or is a party or is threatened to
be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such
Trust) by reason of the fact that he is or was a Debenture
Issuer Indemnified Person against expenses (including attorney
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of such Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Debenture Issuer Indemnified
Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best
interests of such Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful. The Declaration of each Trust also
provides that Sovereign Bancorp shall indemnify, to the full
extent permitted by law, any Debenture Issuer Indemnified Person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason
of the fact that he is or was a Debenture Issuer Indemnified
Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or
matter as to which such Debenture Issuer Indemnified Person
shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem
proper. The Declaration of each Trust further provides that
expenses (including attorneys' fees) incurred by a Debenture
Issuer Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding
referred to in the immediately preceding two sentences shall be
paid by Sovereign Bancorp in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such Debenture Issuer Indemnified Person to
repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by Sovereign Bancorp as
authorized in the Declaration.
Any underwriting agreement or agency agreement with respect
to an offering of securities registered hereunder will provide
for indemnification of Sovereign Bancorp and its officers and
directors and the Trustees who signed this Registration
Statement by the underwriters or agents, as the case may be,
against certain liabilities including liabilities under the
Securities Act of 1933.
Item 16. Exhibits.
The Exhibit Index beginning on page E-1 is hereby
incorporated by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(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
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; and (iii) to include any material
information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any
material change to such information in the Registration
Statement; provided, however, that the undertakings in
clauses (i) and (ii) shall not apply if the information
required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this 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 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
registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) For 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 registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement
as of the time it was declared effective.
(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.
(7) To file an application for the purpose of
determining the eligibility of the trustee to act under
Subsection (a) of Section 310 of the Trust Indenture Act of
1939 in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the
Trust Indenture Act of 1939.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described under Item 15 above or otherwise, the
registrant has 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 registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted against the registrant by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
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.
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 of the requirements for filing on
Form S-3 and that it has duly caused this Pre-Effective
Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
Borough of Wyomissing, Commonwealth of Pennsylvania, on
October 30, 2001.
SOVEREIGN BANCORP, INC.
By/s/ Jay S. Sidhu_____________
Jay S. Sidhu,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title
/s/ Richard E. Mohn*____ Chairman of the October 30, 2001
Richard E. Mohn Board and Director
/s/ Jay S. Sidhu________ President, Chief October 30, 2001
Jay S. Sidhu Executive Officer
and Director
/s/ John A. Fry*________ Director October 30, 2001
John A. Fry
/s/ Brian Hard*_________ Director October 30, 2001
Brian Hard
/s/ Daniel K. Rothermel* Director October 30, 2001
Daniel K. Rothermel
/s/ Cameron C. Troilo*__ Director October 30, 2001
Cameron C. Troilo
/s/ James D. Hogan______ Chief Financial October 30, 2001
James D. Hogan Officer (principal
financial officer)
/s/ George S. Rapp______ Chief Accounting October 30, 2001
George S. Rapp Officer (principal
accounting officer)
*By /s/ Jay S. Sidhu____
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933,
Sovereign Capital Trust III 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 Pre-Effective Amendment
No. 1 to Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the Borough of
Wyomissing, Commonwealth of Pennsylvania, on October 30, 2001.
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Dennis S.
Marlo, Mark R. McCollom, David A. Silverman or Joseph M.
Harenza, and each of them, his true and lawful attorney-in-fact,
as agent with full power of substitution and resubstitution of
him and in his name, place and stead, in any and all capacity,
to sign any or all amendments to this Registration Statement and
to file the same, with all exhibits thereto, and other documents
in connection therewith, attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully and to all intents and purposes as they might or could do
in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
SOVEREIGN CAPITAL TRUST III
By:/s/ Dennis S. Marlo___________
Dennis S. Marlo
as Trustee
By:/s/ Mark R. McCollom__________
Mark R. McCollom
as Trustee
By:/s/ David A. Silverman________
David A. Silverman
as Trustee
Pursuant to the requirements of the Securities Act of 1933,
Sovereign Capital Trust IV 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 Pre-Effective Amendment
No. 1 to Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the Borough of
Wyomissing, Commonwealth of Pennsylvania, on October 30, 2001.
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Dennis S.
Marlo, Mark R. McCollom, David A. Silverman or Joseph M.
Harenza, and each of them, his true and lawful attorney-in-fact,
as agent with full power of substitution and resubstitution of
him and in his name, place and stead, in any and all capacity,
to sign any or all amendments to this Registration Statement and
to file the same, with all exhibits thereto, and other documents
in connection therewith, attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully and to all intents and purposes as they might or could do
in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
SOVEREIGN CAPITAL TRUST IV
By:/s/ Dennis S. Marlo__________
Dennis S. Marlo
as Trustee
By:/s/ Mark R. McCollom_________
Mark R. McCollom
as Trustee
By:/s/ David A. Silverman_______
David A. Silverman
as Trustee
EXHIBIT INDEX
Number Description
1.1 Form of underwriting agreement (including delayed
delivery contract) for debt securities**
1.2 Form of underwriting agreement for preferred stock**
1.3 Form of underwriting agreement for depositary shares**
1.4 Form of underwriting agreement for trust preferred
securities**
1.5 Form of underwriting agreement for common stock**
1.6 Form of underwriting agreement for warrants**
1.7 Form of underwriting agreement for stock purchase
contracts**
1.8 Form of underwriting agreement for stock purchase
units**
2.1 Agreement and Plan of Merger, dated as of July 16,
2001, between Sovereign Bancorp, Inc. and Main Street
Bancorp, Inc. (Incorporated by reference to Exhibit 2
of Main Street Bancorp's Current Report on Form 8-K
filed July 20, 2001)
2.2 Stock Option Agreement, dated July 16, 2001, between
Sovereign Bancorp, Inc. and Main Street Bancorp, Inc.
(Incorporated by reference to Exhibit 99.1 of
Main Street Bancorp's Current Report on Form 8-K filed
July 20, 2001)
3.1 Amended and Restated Articles of Incorporation of
Sovereign Bancorp, Inc. (Incorporated by reference) to
Exhibit 3.1 of Sovereign's Registration Statement
No. 333-86961-01 on Form S-3)
3.2 Bylaws of Sovereign Bancorp, Inc. (Incorporated by
reference to Exhibit 3.2 to Sovereign Bancorp's Annual
Report on Form 10-K for the year ended December 31,
1998)
4.1 Subordinated Trust Indenture dated as of February 1,
1994, between Sovereign Bancorp, Inc. and BNY Midwest
Trust Company (as successor to Harris Trust
and Savings Bank), as Trustee. (Incorporated by
reference to Exhibit 4.1 to Sovereign Bancorp's
Registration Statement No. 33-75472 on Form S-3)
4.2 Senior Trust Indenture dated as of February 1, 1994,
between Sovereign Bancorp, Inc. and BNY Midwest Trust
Company (as successor to Harris Trust and Savings
Bank), as Trustee. (Incorporated by reference
to Exhibit 4.2 to Sovereign Bancorp's Registration
Statement No. 33-75472 on Form S-3)
4.3 Form of Junior Subordinated Indenture between Sovereign
Bancorp, Inc. and BNY Midwest Trust Company (as
successor to Harris Trust and Savings Bank) relating to
junior subordinated securities. (Incorporated by
reference to Exhibit 4.3 to Sovereign's Registration
Statement No. 333-86961 on Form S-3.)
4.4 Amended and Restated Rights Agreement, dated as of
June 21, 2001, between Sovereign Bancorp, Inc. and
Mellon Investor Services (Incorporated by reference to
Exhibit 4.1 to Sovereign Bancorp's Current Report on
Form 8-K/A No. 2 filed on July 3, 2001)
4.5 Form of Debt Warrant Agreement (including form of Debt
Warrant certificate)**
4.6 Form of Preferred Stock Warrant Agreement (including
form of Preferred Stock Warrant certificate)**
4.7 Form of Common Stock Warrant Agreement (including form
of Common Stock Warrant certificate)**
4.8 Sovereign Bancorp, Inc. has outstanding certain long-
term debt. None of such debt exceeds 10% of the total
assets of Sovereign Bancorp, Inc. and its consolidated
subsidiaries; therefore, copies of the constituent
instruments defining the rights of the holders of such
debt are not included as exhibits to this Registration
Statement. Sovereign Bancorp, Inc. agrees to furnish
copies of such instruments to the Commission upon
request
4.9 Statement with Respect to Shares for the offered
preferred stock**
4.10 Form of deposit agreement with respect to the
depositary shares (including the form of depositary
receipt to be issued thereunder)**
4.11 Certificate of Trust for Sovereign Capital Trust III.
(Incorporated by reference to Exhibit 4.20 to
Sovereign's Registration No. 333-86961 on Form S-3.)
4.12 Declaration of Trust for Sovereign Capital Trust III.
(Incorporated by reference to Exhibit 4.21 to
Sovereign's Registration No. 333-86961 on Form S-3.)
4.13 Form of Amended and Restated Declaration of Trust for
Sovereign Capital Trust III (including the forms of
preferred security and common security to be issued
thereunder). (Incorporated by reference to
Exhibit 4.22 to Sovereign's Registration No. 333-86961
on Form S-3.)
4.14 Form of Guarantee with respect to the preferred
securities of Sovereign Capital Trust III.
(Incorporated by reference to Exhibit 4.23 to
Sovereign's Registration No. 333-86961 on Form S-3.)
4.15 Certificate of Trust for Sovereign Capital Trust IV.
(Incorporated by reference to Exhibit 4.24 to
Sovereign's Registration No. 333-86961 on Form S-3.)
4.16 Declaration of Trust for Sovereign Capital Trust IV.
(Incorporated by reference to Exhibit 4.25 to
Sovereign's Registration No. 333-86961 on Form S-3.)
4.17 Form of Amended and Restated Declaration of Trust for
Sovereign Capital Trust IV (including the forms of
preferred security and common security to be issued
thereunder). (Incorporated by reference to
Exhibit 4.26 to Sovereign's Registration No. 333-86961
on Form S-3.)
4.18 Form of Guarantee with respect to the preferred
securities of Sovereign Capital Trust IV.
(Incorporated by reference to Exhibit 4.27 to
Sovereign's Registration No. 333-86961 on Form S-3.)
5.1 Opinion and Consent of Stevens & Lee as to the legality
of the debt securities, preferred stock, common stock,
depositary shares, warrants, stock purchase contracts,
stock purchase units and trust preferred securities
being registered.
5.2 Opinion and Consent of Stevens & Lee as to the legality
of the trust preferred securities being registered.
12.1 Computation of Ratios of Earnings to Fixed Charges and
Combined Fixed Charges and Preferred Stock Dividends***
23.1 Consent of Ernst & Young LLP***
23.2 Consent of Stevens & Lee (included in Exhibit 5.1 and
5.2)
24.1 Powers of Attorney of Directors and Officers (included
on signature page)***
25.1 Form T-1 of BNY Midwest Trust Company (as successor to
Harris Trust and Savings Bank) as trustee under the
Subordinated Trust Indenture***
25.2 Form T-1 of BNY Midwest Trust Company (as successor to
Harris Trust and Savings Bank) as trustee under the
Senior Trust Indenture***
25.3 Form T-1 of BNY Midwest Trust Company as trustee
under Junior Subordinated Indenture
25.4 Form T-1 of The Bank of New York as trustee under the
amended and restated declaration of trust of Sovereign
Capital Trust III
25.5 Form T-1 of The Bank of New York as trustee under the
amended and restated declaration of trust of Sovereign
Capital Trust IV
25.6 Form T-1 of The Bank of New York as trustee under the
guarantee for the benefit of holders of trust preferred
securities of Sovereign Capital Trust III
25.7 Form T-1 of The Bank of New York as trustee under the
guarantee for the benefit of holders of trust preferred
securities of Sovereign Capital Trust IV
---------------------------
* To be filed by amendment.
** Will be filed as an exhibit to a Current Report on Form 8-K
and thereby incorporated by reference herein in connection
with the offering of each applicable class of securities.
*** Previously filed.